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salin Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 10:39 AM
Original message
AmeriDebt Sued For Fraud
AmeriDebt Sued For Fraud

ST. LOUIS, MO., Sept. 12, 2003

(CBS) The state of Missouri on Thursday sued credit-counseling service AmeriDebt, accusing the company of defrauding consumers of millions of dollars through excessive, hidden fees while falsely pitching itself as a nonprofit organization.

Attorney General Jay Nixon said AmeriDebt secretly functions as a profit-driven company in which "credit counselors" or "debt professionals" - untrained in such roles - sell debt-management plans for commissions.

On its Web site, AmeriDebt describes itself as a "nationally recognized non-Profit credit counseling company" whose "main goal is to help educate Americans on how to reduce, manage, and eliminate their debt."

AmeriDebt also says it is "one of the - if not the - fastest-growing credit counseling organizations in America," with some 90,000 customers now and about 400,000 clients since 1997.

http://www.cbsnews.com/stories/2003/09/12/national/main...

Shall we call this - cashing in on a tanking economy? Or bleeding those who are already bleeding?
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tom_paine Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 10:41 AM
Response to Original message
1. Welcome to Bushevik-Occupied Imperial Amerika
In 20 years will people even get caught when doing this sort of thing?

I mean, clearly if AmeriDebt had allied itself with the Imperial Family they would not be being prosecuted right now.

But of course in 20 years, when the last vestiges of the Old Republic have been swept away (except for the Pravda and the Imperial Senate), such predation will scarcely raise an eyebrow.
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onehandle Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 10:44 AM
Response to Original message
2. These "credit counselor" companies work for banks...
They are essentially debt collectors that you turn yourself over to.

Once you've signed up with them it's harder to declare bankruptcy.

Which is of course what the credit card companies want.
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CBHagman Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 10:48 AM
Response to Original message
3. It's not the first time Ameridebt has faced legal trouble.
There was a case a few years back in which they were taken to court. I believe they settled at that time. If I recall correctly, the case involved their links to a particular loan program.

Try running "Ameridebt" through Google and see what you get. I think you'll be surprised.
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no one in particular Donating Member (417 posts) Send PM | Profile | Ignore Fri Sep-12-03 10:55 AM
Response to Original message
4. Kudos to Nixon.
Nixon has a good history of standing up for consumers.

There's no way in hell a Republican Attorney General would've done this.
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Chico Man Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 11:04 AM
Response to Original message
5. "AmeriDebt:" a symbol of our times
Just from watching the commercials I assumed this company was run by a bunch of crooks. The whole premise screams corruption.

I love paying off my debt each month before the card companies get to charge an interest fee. I know it pisses them off. I fell fortunate to be able to do this. Not only does uncontrollable debt make a person feel like crap, they have to deal with scams such as Ameridebt who promise salvation. I can draw a parallel to the corruption that inherently goes along with religion.

"Join us, we will solve your problems.."

Ameridebt is truly a bottom feeder. What a bunch of jerks! I hope all of their dirty games swing around and destroy them in a way they deserve.
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dionysus Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 12:18 PM
Response to Original message
6. I haven't had any problems with them...
I ran up my credit cards during my last year of college due to some unforseen expenses and poor budgeting/stupidity and the 20% interest rates were killing me.

Basically, your first payment goes to them, and on the subsequent payments, they take a percentage, not to exceed 20 bucks. The reason it saves me a bunch of money is that they got my interest rates from around 20 to less than 10 percent.

It works out for me because money I saved in interest was far more than the 20 bucks monthy that it cost me.

I live in NY, and they were upfront about the fees to me. I feel bad if they have been deceiving people. The article is correct in saying that they don't offer any financial counseling, though.

I sure did learn my lesson about credit cards though; keep an empty one around for emergencies, but pay in cash! (or make damn sure to pay the balance in full each month)

I don't know what to think of this.
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Chico Man Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 12:26 PM
Response to Reply #6
7. Yeah, use the credit card companies (convenience, points)...
But don't let them use you.

It is a difficult thing to do, thats for sure! The minute one gets caught up with paying minimum payments on large balances the hole has been dug, much to the delight on the credit card company.
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ProfessorGAC Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-03 01:04 PM
Response to Reply #7
8. That's My Policy
I'm on the board of a small bank that has its own Visas. While people who pay off the cards in full end up costing more in transaction fees than any interest accrued, the Visa people and the issuing bank still get the vendor fee. So, people like you and i are break even for a bank, overall.

But, those folks are GOOD customers for bullet-proof home and car loans. They are ultra low risk, and banks like folks like you and me more than they like the 22% interest crowd. Trust me on this.

Some accountant on the third floor might like the huge returns on the high risk folks, but the loan and collection folks don't and neither do the upper level managers.

You, they like.
The Professor
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