Regulators, Chase Target Debt Settlement Firm Hess Kennedy

Regulators and creditors are cracking down on the so-called debt settlement firms that many consumers are turning to as their debts spiral out of control, according to several news reports

One firm that is coming under intense scrutiny is Coral Gables, Fla.-based Hess Kennedy Chartered and its affiliates.

Both Florida and North Carolina have filed deceptive practices suits against Hess Kennedy and another two states are investigating the firm, according to Business Week magazine.

Florida Attorney General Bill McCollum charged the firm with promising consumers it would help to reduce or eliminate their credit card debt for a fee. Hess Kennedy allegedly takes the fee but doesn’t pay off the debts, according to McCollum,

The Florida bar is seeking to suspend the law license of Hess Kennedy as well, according to the Daily Business Review in Florida.

Chase Bank USA sued Hess Kennedy last Friday in federal court in Wilmington, Del., accusing the firm of running an “unlawful debt elimination scheme,” according to the Review. Chase’s six-count complaint charges the firm with interference with Chase customers, conspiracy and violations of Delaware trade practices. Beth Moskow-Schnoll, a partner with Chase’s attorney Ballard Spahr Andrews & Ingersoll, referred calls to Chase. Chase did not return calls

In December, the Attorney General of West Virginia obtained an injunction that barred Hess Kennedy’s Florida attorneys from settling consumer debts for West Virginia consumers.

Hess Kennedy claims on its Web site it is an international law firm with offices in the U.S., Europe, and the Caribbean. It manages $6.8 billion for 3,500 clients, the site reports. Hess Kennedy referred calls to its attorney Robert C. Buschel with Rothstein, Rosenfeldt Adler of Ft. Lauderdale. Buschel did not return calls.