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FTC Suit Claims Thousands Bilked by AmeriDebt

November 20, 2003|From Associated Press

WASHINGTON — Federal regulators filed their first lawsuit against a credit counseling firm Wednesday, alleging that industry giant AmeriDebt Inc. used deceptive marketing to bilk hundreds of thousands of customers.

The Federal Trade Commission alleged the company hid fees and did not educate people about how to get out of debt. The FTC also claimed the company falsely described itself as nonprofit.

Regulators allege Germantown, Md.-based AmeriDebt made customers think that an initial fee would be part of their debt-reduction payments. Instead, it went to AmeriDebt.

AmeriDebt attorney Zynda Sellers disputed the FTC's claims. She said the company did provide educational services to customers and that the payments cited by Beales were "voluntary contributions."

The FTC is asking the court to order AmeriDebt to stop deceiving consumers and to reimburse anyone who has been duped by the company's practices.

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