Regional Law Firm Faces Administrative Charges Over Claims it Charged Illegal Advanced Fees for Loan Modification Services

On June 26, 2015, the Maryland Attorney General announced the filing of administrative charges against a regional law firm over claims the firm charged illegal advance fees in connection with loan modification services. According to the Maryland Attorney General, lawyers at the firm promised consumers that they could obtain modification of a variety of consumer loans. The firm allegedly required consumers to pay advance fees of approximately $2,500 before the firm began negotiating the modifications. Such advance fees are illegal under Maryland consumer protection law. The firm also allegedly refused to refund these fees when it failed to obtain the promised modifications. The Attorney General indicated that the law firm engaged in these practices over a period of three years. The firm faces significant potential liability. If the Attorney General prevails, the law firm may be required to pay restitution to all affected consumers and $1,000 per violation of the Maryland Consumer Protection Act.