Cooper: Debt management firm collects fees, provides little help
Posted October 4, 2010 2:17 p.m. EDT
Raleigh, N.C. — The state Attorney General's Office has filed suit against a Florida-based firm that authorities contend illegally collects money to settle people's debts.
Seven consumers complained to the state Consumer Protection Division about Consumer Law Group, which pitches its services online and through radio advertisements, telemarketing calls, and local telephone book listings.
Attorney General Roy Cooper said Monday that the company has collected more than $2.6 million for 3,000 North Carolina residents by promising to reduce their debts by half and leave them debt-free without bankruptcy.
Most consumers who’ve paid the company have gotten little or no help settling their debts or working out payment plans with their creditors, Cooper said. The company claims that its services are performed by attorneys when they are not and misleads consumers to believe that its program is government-affiliated, he said.
Consumer Law Group also signs people up for debt management classes and collect fees that exceed what’s allowed under state law, he said.
“Taking advantage of consumers who are trying to pay off their bills is wrong, and it’s also against the law,” Cooper said in a statement.
The state suit seeks a ban on the company's deceptive practices, refunds for North Carolina consumers, cancellation of all contracts, payment of civil penalties and a freeze of the company’s assets.