[co-author: Stephanie Kozol]*
Pennsylvania Attorney General (AG) Michelle Henry reached a settlement with attorney Erik Helbing and his business, Helbing Law Group, LLC, resolving allegations of deceptive advertising practices and failure to effectively deliver on promised debt settlement services. The law firm advertised that it could facilitate significant reduction in client debts through negotiation or litigation processes using licensed attorneys. According to Henry, these advertisements were false or misleading.
Henry accused Helbing and his business of violating the Telemarketing Sales Rule (TSR) and the Debt Settlement Services Act (DSSA) by transferring customer accounts intended for legal servicing to nonattorney call center representatives, despite clients’ understanding that licensed attorneys would be handling their cases. Further, Henry alleged that the law firm accepted unlawful advance payments from consumers while failing to provide the promised legal services.
As part of the settlement agreement, Helbing and his business are required to pay $25,000 in restitution and $10,000 in penalties and costs. These payments are in addition to the $50,000 the firm already refunded to consumers who lodged complaints. Helbing and his businesses are also required to comply with the TSR, DSSA, and consumer protection laws as a condition of the settlement.
Why It Matters
This settlement highlights the regulatory skepticism toward the “attorney-model” of debt settlement services, particularly when regulators perceive that clients are deceived into believing that attorneys handle their cases when in fact they do not. Companies should strive for transparency when it comes to consumer-facing business practices that are material to the consumer’s decision to purchase services from the company to mitigate the risk of regulatory scrutiny.
*Senior Government Relations Manager
