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Court: Debt settlement company must give up $4.2M in fees

MADISON, Wis. (AP) — A state appeals court says a hearing examiner properly ordered a debt settlement company to give up $4.2 million in fees and pay nearly $2 million in forfeitures because it was operating without a license.

Morgan Drexen Inc. has provided debt settlement services in the state since 2007, collecting $4.2 million in fees from debtors.

State regulators in 2011 alleged the company was operating as an unlicensed adjustment service company. A hearing examiner ordered the company to disgorge itself of its fees and pay $1.9 million in forfeitures.

Morgan Drexen argued the examiner misinterpreted the definition of an adjustment service company. The 2nd District Court of Appeals rejected those arguments Wednesday, saying the company failed to show the examiner’s interpretation was unreasonable.

The company’s attorney didn’t immediately return a message.

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