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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion.
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To: Jim Bishop who started this subject9/11/2003 5:17:03 PM
From: StockDung   of 150070
 
Nixon suit charges AmeriDebt with fraud
Missouri Attorney General Jay Nixon filed a lawsuit Thursday charging national credit-counseling company AmeriDebt with defrauding cash-strapped Missourians.


In a complaint filed in St. Louis City Circuit Court, Nixon alleged that AmeriDebt, a nonprofit based in Germantown, Md., has deceived customers through excessive hidden fees and by secretly transferring customers' accounts and money to a for-profit company.

The lawsuit asks the court to void any contract made between Missouri consumers and the defendants and for the credit-counseling company to pay a penalty of as much as $1,000 for each violation of state consumer protection laws.

Nixon spokesman Scott Holste said the AG's office has been looking into the matter for several months. The lawsuit is similar to one Illinois Attorney General Lisa Madigan filed against AmeriDebt in February. Another suit in 1999 by the District of Columbia resulted in a $2 million settlement, Holste said.

"We have received complaints from consumers over the past several months who have been concerned about the practices of AmeriDebt -- the voluntary contributions, the first monthly payment and the ongoing fees that are part of the bill they pay," he said.

Holste said the attorney general's office will calculate an award once it determines how many Missourians may have paid fees to AmeriDebt.

"We think it could be in excess of 2,000 people across the state," he said.

© 2003 American City Business Journals Inc.

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