Hagens Berman has filed a lawsuit on behalf of consumers against Noteworld, LLC (“Noteworld”), claiming the Tacoma, Wash. company has violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by engaging in a conspiracy to defraud consumers by extracting exorbitant fees from trust accounts related to useless debt-settlement plans.
According to the lawsuit, Noteworld, which has since changed its name to Meracord, purports to act as an independent fiduciary, independent from front-end debt settlement companies (“front DSCs”). In reality, the complaint argues, the front-DSCs use predatory tactics to sign up distressed borrowers for debt settlement plans, and then Noteworld conspires with the front DSCs to loot consumers’ settlement accounts through exorbitant fees, leaving little or no money for actual settlements.
NoteWorld/Meracord has now ceased all business operations and is essentially insolvent. Hagens Berman is continuing its efforts to recover consumers’ losses from NoteWorld’s surety bonds that were obtained as required by the licensing boards of several states. Pursuant to a settlement agreement with NoteWorld, its remaining monetizable asset, a promissory note for several hundred thousand dollars, has been placed in trust for the benefit of potential class members. NoteWorld has ceased defending itself from Plaintiffs’ claims and it has defaulted in the defense of the lawsuit. Hagens Berman has asked the Court to enter a default judgment against NoteWorld/Meracord and certify a class of consumers who lost money in the NoteWorld/Meracord scheme. If judgment is obtained, Hagens Berman will seek partial payment of the judgment pursuant to the surety bonds.
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