Web of deception?Legal networks are under fire from state and federal officials for questionable debt settlement work

This graphic illustrates how national companies are allegedly operating high volume debt settlement businesses. Authorities say these companies are developing networks of sham law firms as "fronts" to get around federal and state laws banning collection of upfront fees

for debt settlement services.

National debt settlement company

Handles marketing and advertising to attract clients with ads promising to settle

debts for 50 cents on the dollar. They also seek out regional attorneys to help recruit local attorneys.

Local attorneysThey have law licenses but may not actually practice law in their communities. They may be paid $750 to

process paperwork and sign debt settlement agreements. They may or may not actually meet with the client. Few cases are turned away and authorities say they are doing nothing more than "robo-signing" documents.

Regional recruitersThese are attorneys hired by the national companies to

recruit local attorneys to process debt settlements.

ClientsDebtors who want to settle credit card debts for pennies on the dollar are desperate to end debt collection calls. The firms typically charge 15 percent of the amount owed. If clients have $25,000 in debts, for example,they make monthly payments until they have paid in $3,000 in fees. No work proceeds on their case until that upfront fee is paid.Clients are told to stop paying their credit card bills and instead pay the money to the national settlement firm, which is supposedly putting the cash in a trust account and saving it up in order to make a sizable lump payment settlement offer.

Source: CreditCards.com interviews and court documents.