Attorney General Cuomo Stops Rochester Woman From Practicing Law Without A License And Providing Erroneous Financial Advice
ROCHESTER, N.Y. (July 9, 2008) – Attorney General Andrew M. Cuomo announced his office has obtained a settlement that shuts down a Rochester woman’s unlicensed law practice.
The settlement follows an investigation that found that Kathleen Johnson, of Broderick Drive in Rochester, operated a business out of her residence and repeatedly gave erroneous and conflicting legal bankruptcy and financial advice to consumers and received compensation for these activities, which can only be performed by a licensed attorney. Johnson also gave specific advice to consumers dealing with Bankruptcy Court proceedings despite having been previously prohibited to do so by the Office of the United States Bankruptcy Court for the Western District of New York. Johnson has also been the subject of several small claims judgments obtained by consumers.
“This woman victimized Monroe County residents by representing herself as a licensed attorney and a legitimate financial advisor,” said Attorney General Cuomo. “Consumers with legal or financial issues need qualified, licensed professionals to handle their affairs and ensure that they are not duped by those seeking to benefit off their misfortune.”
The Attorney General’s settlement requires Johnson to pay $5,000 in penalties and costs, plus restitution to any consumer who files a complaint by November 4, 2008. She is also permanently banned from acting as financial crisis consultant in the credit services business and must provide the Attorney General’s office with the name and type of any business she owns or operates for the next five years. Additionally, she must also supply periodic compliance statements to the Attorney General’s office.
Besides illegally practicing law, the Attorney General’s investigation revealed Johnson also violated provisions of General Business Law in her “financial crisis consultant” role. Johnson charged advanced fees, falsely claimed she could make consumers’ credit history “disappear” and then failed to provide written contracts to consumers with description of services.
Attorney General Cuomo urges consumers experiencing credit-related financial problems or debt collection phone calls to consider the following tips:
- Contact your creditors directly. Oftentimes, they are willing to develop an adjustment payment plan to assist you in paying your debt.
- Contact a not-for-profit credit counseling agency. These community organizations offer counseling, educational materials, workshops, and debt repayment plans. Generally, their services are offered for free or at a small fee set on a sliding scale. Contact the State Banking Department to be sure your credit counseling agency is licensed by the State.
- Be cautious of debt reduction services that charge fees based upon your promised debt reduction. Remember, you’re reaching out for assistance to reduce your debt burden, not to add to it.
- Think twice about advisors who tell you to stop making payments to creditors, unless payments are continued to be made through your debt repayment plan. Not paying debts can damage credit ratings and lead to lawsuits and judgments.
- Be careful when considering offers to remortgage your home to pay off your debts. Your risk losing your home if your plans are not successful.
- Be wary of anyone who brags about being so successful that they get repeat customers. The whole point to credit counseling is to help you get out and stay out of debt problems.
- Remember– if an offer for debt reduction assistance sounds too good to be true, it probably is.
More information and tips on to avoid consumer fraud can be found online at www.ag.ny.gov/bureaus/consumer_frauds/tips/tips.html
Consumers who believe they have been defrauded by Johnson should contact the Attorney General’s Rochester Regional Office at 585-327-3240.
This case was referred to the Attorney General by the Office of the United States Bankruptcy Court for the Western District of New York due to evidence that Johnson may have been illegally practicing law. This case was handled by Assistant Attorney General Carlos Rodriguez of the Rochester Regional Office.