Last January, a Hokkaido man filed charges against the Tokyo-based attorney he had retained to help him with debt relief. The man alleged the lawyer had embezzled refunds that the lawyer had negotiated from consumer finance companies.
The plaintiff had originally made contact with the attorney three years ago after seeing a promotional flyer in which the attorney claimed he could assist people burdened with debts in excess of 3 million yen. The attorney managed to considerably reduce the amount of debt, lowering the man's monthly repayments to less than half.
"I thought the load was almost off," the man tells Takarajima (November).
Because the consumer loan companies had charged the man interest rates above the legal limits, the attorney was able to obtain refunds of 2.5 million yen. The funds were transferred to the attorney's account two years ago, but the client continued paying monthly installments against his remaining debts.
The client alleges if the attorney had handed over the entire refund, there would have been no need for him to have continued to sweat blood for two more years to keep up the repayments.
"I was unfamiliar with the law, and trusted him," the man fumes. "He completely betrayed me." When questioned by the magazine, the attorney responded that he had "intended to return the money eventually" and that "no damage had been done."
"The client was in much better shape that before he started, and was paying off his debts a month at a time," the lawyer replied.
At the hearing, the lawyer testified he had planned to pay himself 940,000 yen for services rendered out of the 2.5 million yen refunded. The two parties finally settled out of court, with the attorney's fee lowered to around 300,000 yen.
The client, however, is still furious, and has appealed to the Japan Federation of Bar Associations to have the attorney disbarred.
Takarajima relates another case of a woman who worked to pay off debts for 20 years after her husband became too ill to work. A commercial debt relief specialist steered steered her an attorney who was participating in a counseling event. Subsequent legal investigation proved, once again, that she had been charged excessive interest and was entitled to a refund. Seven months later the attorney summoned her and she received a 6 million yen payback.
"Here, please take this refund, the lawyer said to me" she relates. "I never thought I would see so much money. My hands were trembling when I took it."
Unfortunately as soon as the woman exited his office, the debt relief specialist who had made the initial introduction was waiting in the wings, and he charged her 2.63 million yen for his services. Attorneys' use of outsiders for retrieving money is prohibited by law, although their use appears to be widespread.
The attorney told the magazine he had no connection to the specialist firm and did not accept such commercial referrals. When Takarajima telephoned to the number on the specialist's card, a recorded message informed it the number was no longer in service.
In 2009, 1,922 people filed complaints regarding unethical practices and others to the Consumer Affairs Center of Japan and other advocate organizations. The figure in 2000 was 310.
The magazine sees three main factors behind the fivefold increase in claims. First was the lifting of the ban on advertising by attorneys in 2000. Second was the deregulation of attorney fees in 2004. The third was the sharp increase in the number of practicing attorneys, which rose from 16,305 in 1998 to 26,930 in 2009.© Japan Today