The Paynter Law Firm PLLC
Representing Individuals and Small Businesses on a Contingency Fee Basis
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Meracord / NoteWorld Litigation

Meracord / NoteWorld Litigation

The for-profit debt relief industry, which purports to help indebted consumers “negotiate” with their creditors to lower their debts, has been criticized in recent years by many consumer advocates—as well as the Federal Trade Commission and the Government Accountability Office—for widespread allegations of fraud and abuse.

In July 2011, The Paynter Law Firm filed a class-action lawsuit in federal court in Washington State against Meracord, LLC (formerly NoteWorld, LLC), a major player in the for-profit debt relief industry. The lawsuit alleged that Meracord violated the federal Racketeer Influenced Corrupt Organizations Act (“RICO”) by conspiring, along with scores—if not hundreds—of “front-end” debt settlement companies to defraud indebted consumers by falsely representing their services, the fees they would charge, and other important facts. The complaint also alleged that Meracord’s actions violated Washington State law by, among other things, charging illegal fees and failing to disclose important information to consumers.

The consumers in the suit lost thousands of dollars in debt settlement scams; one plaintiff lost over $12,000 in fees she paid for services that were promised but never received. The lawsuit seeks to represent all consumers who have established Meracord/NoteWorld accounts related to any debt settlement program.

The Washington Court certified a Class in the litigation, and awarded the Class $1.45 billion in damages against Meracord. The Paynter Law Firm was appointed Class Counsel, along with Hagens Berman Sobol Shapiro LLP. 

Because Meracord was no longer in business and had no assets, the Firm proceeded to successfully pursue recovery on behalf of the Class against two surety companies that issued bonds backing Meracord’s money transmitter licenses.

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