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Consumer Protection – Debtors – adjustment service companies

Wisconsin Court of Appeals


Consumer Protection – Debtors – adjustment service companies

Where the petitioner received $4.2 million in fees, while paying less than $4 million to its client’s creditors, the DFI reasonably ordered it to disgorge fees.

“We acknowledge that WIS. STAT. § 218.02(1)(a), which has remained virtually unchanged since its enactment in 1935, see 1935 Wis. Laws, ch. 515, is not a model of clarity. We reject, however, Morgan Drexen’s attempt to capitalize on the language of what it derides as an ‘arcane’ statute to argue for a meaning that would limit its application to only two types of Depression-era business practices. A broad interpretation of the statute is in keeping with the statutory intent expressed in § 218.02(7), in which the legislature granted the Division the power to issue orders to ‘protect debtors from oppressive or deceptive practices’ and to ‘prevent evasions of this section.’ JK Harris, 293 Wis. 2d 753, ¶21.”


Recommended for publication in the official reports.

2014AP1268 Morgan Drexen, Inc., v. DFI

Dist. II, Ozaukee County, Malloy, J., Reilly, J.

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