A reader brought to my attention a class action suit filed in Georgia and now moved to Federal Court. The case is Guzman v. The Consumer Law Group, American Credit Counselors, and Michael Metzner.
The complaint is another in a series of complaints we’ve seen where a debt relief company is accused of violating the tough and limited fees imposed in the State of Georgia. (Use the free compliance module to avoid these issues.)
The suit states:
“Defendant The Consumer Law Group, P.A. is a Florida Corporation in the business of debt adjusting, budget counseling and debt management with its principal place of business in Boca Raton, Florida.
Defendant American Credit Counselors, Inc. is a Florida Corporation in the business of debt adjusting, budget counseling and debt management with its principal place of business in Boca Raton, Florida.
On information and belief, The Consumer Law Group, P.A. and American Credit Counselors, Inc. are operated as one and the same company in a deceptive manner in an effort to avoid the requirements of Georgia law with respect to Debt Adjusting.”
“Plaintiff contacted the Defendants through a yellow page advertisement, which was deceptively placed to induce Georgia residents to believe that the Defendants were a local company in the credit counseling business.
Defendants represented that they would analyze Plaintiff’s financial situation, negotiate with Plaintiff’s creditors to lower her interest rates, and assist her in making payments to her creditors. Defendants made the same representations to the proposed Plaintiff Class Members.
Defendants, or their agents, charged and accepted from the Plaintiff’s bank account and one-time initial payment of $200 on September 2, 2011, without depositing any portion of that amount into an account for payment to her creditors and without paying any of that amount to her creditors.
Thereafter the Defendants charged the Plaintiffs the statutory maximum fee of 7,5% of her monthly payment paid by her for distribution to her creditors.”
According to the declaration filed by ACC (American Credit Counselors) the amount of fees ACC had collected from Georgia residents before the suit was more than $600,000.
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