Class Action Focuses On Legal Zoom
News Release / June 11, 2010
Legal Zoom, which advertises that “We put the law on your side”, will soon find out if the law in on its side. LegalZoom.com is the subject of a consumer class action lawsuit that charges the web-based business with practicing law without a license, along with several other unfair and deceptive anti-consumer practices.
“LegalZoom preys on people when they’re at their most vulnerable,” said San Francisco elder abuse attorney Kathryn Stebner, “when they are of advanced age or poor health and need a will or a living trust.”
Stebner co-filed the lawsuit with fellow San Francisco attorney Robert Arns. The class representative is the estate of Anthony J. Ferrantino. Ferrantino attempted to use LegalZoom’s services before he passed away.
Ferrantino had terminal cancer. He asked his niece, Katherine Webster, to help him use LegalZoom to set up a living trust and will. LegalZoom’s claims led Ferrantino and Webster to believe their documents would be legally binding. However, Webster discovered that banks and other financial institutions would not accept the LegalZoom documents. Webster and Ferrantino were not able to fund the living trust by the time Ferrantino died. At great expense, Webster hired an estate attorney to straighten everything out.
The class described in court papers includes anyone in California who paid LegalZoom for a living trust, will, living will, advance health care directive or power of attorney.
“LegalZoom’s business is based on nurturing the false sense of security that people do not need to hire a traditional attorney,” said Arns. “Legal Zoom advertises that you don’t need a real attorney because its work is legally binding and reliable. That’s misleading. Improperly prepared estate planning documents are a ticking time bomb that can result in improper tax consequences and other items that could cost the estate and heirs huge sums.”
The lawsuit details what it describes as misleading statements by LegalZoom. Some of those are: that LegalZoom carefully reviews customer documents, that LegalZoom guarantees its customers 100 percent satisfaction with its services, that LegalZoom documents are the same quality as those prepared by an attorney, and that the documents are effective and dependable.
The lawsuit names LegalZoom co-founder Robert Shapiro as a defendant. Shapiro appears on the LegalZoom web page and in the business’s TV ads. He is best known for being one of O.J. Simpson’s attorneys.