The Maryland attorney general's office said Thursday it had reached a settlement with five California law firms and their owner after allegations related to the companies' debt settlement services.
The attorney general's office alleged that the companies failed to settle most consumers' debts though customers were charged in full, and that the companies collected illegal advance fees.
The owner of the companies, Mandip Purewal, did not respond to a request for comment. The companies were identified as National Consumer Law Group, U.S. Legal Services Group, Imperial Law Group, Apex Legal Group, and Regis Law Group.
Under the settlement, the companies will be fined $250,000 and return all payments to customers for debts that were not settled. The companies and their owners are also barred from offering debt settlement services in Maryland.
Maryland's Debt Settlement Services Act prohibits debt settlement companies from collecting fees until they've settled or reduced a consumer's debt.