AmeriDebt Returns $13 Million To Debt Management Scam Victims
September 23, 2008
The Federal Trade Commission announced that it returned approximately $12.7 million to consumers this week. Consumers who were all ready struggling with financial hardship when they turned to AmeriDebt and DebtWorks for help and understanding.
This was the largest debt management deception case brought by The Federal Trade Commission, and it’s finally paid off for the innocents suckered by late-night TV ads and direct mail barrages promising debt freedom.
According to ConsumerAffairs.com, AmeriDebt Counsel Rob Herrell stated that he was surprised and disappointed about the lawsuit filed by Attorney General Jay Nixon.
What about the consumers who were deceived by AmeriDebt? They must have been surprised and disappointed as well.
All 287,000 of them.
In addition to the almost $13 million, another $7 million will be returned to consumers as the result of class action settlements with related credit counseling services. More than 460,000 consumers who obtained a debt management program with one of 11 credit counseling services who worked through DebtWorks will qualify for compensation.
AmeriDebt was supposed to be a non-profit credit counseling service. Missouri Attorney General Jay Nixon charged that AmeriDebt, DebtWorks and other related credit counseling agencies, deceived consumers with high hidden fees and a lack of any real credit counseling. The employees of these credit counseling agencies had little or no training and were paid on commission. Instead of counseling the consumers, they sold debt management programs that charged a monthly fee and lasted 3 to 5 years.
The monies from some of the debt management programs were secretly transferred into for-profit businesses owned by Andris Pukke, the owner of AmeriDebt.
Pukke was barred from working in the debt management, credit counseling and telemarketing. Unfortunately, this remedy came along a bit too late for the scores of people who fell victim to his scams and shell games.
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