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Advantage Debt Solutions and Anthony Krysinski Sued by NC AG.

Written by Steve Rhode

The State of North Carolina has obtain a court order against Advantage Debt Solutions and Anthony Krysinski for selling advance fee debt settlement services.

The complaint filed by the State said, “The defendants are offering a deceptive and illegal debt settlement scheme to consumers in North Carolina. This scheme, which is prohibited by North Carolina law, purports to relieve consumers of their debt burdens by negotiating down their outstanding debt obligations. In fact, the defendants’ debt settlement program operates as a classic advance fee scam, designed to extract up-front fees from financially-strapped consumers whether or not any useful services are performed. As shown below, in many instances, the defendants fail to obtain settlements of consumers’ debts, and consumers often end up in a far worse financial position.”

What makes this situation even more ridiculous is that Advantage Debt Solutions is a North Carolina based debt settlement company who clearly should have known better.

The complaint further stated:

“The defendants market their services through aggressive telemarketing calls. The
defendants assure consumers that they have expertise in debt negotiation and regularly promise
consumers that they can negotiate with creditors to substantially reduce consumers’ credit card
and other unsecured debt. The defendants represent that they can get consumers to be debt-free in two or three years.

On its internet website at defendant ADS promotes that it can “eliminate all credit card and unsecured debts in just 24-36 months.” Defendant ADS further represents that it can help with creditor harassment, and provide assistance in “minimizing and eventually eliminating calls from the creditors.”

When consumers enroll in the defendants’ debt settlement program, the defendants and their agents expressly instruct the consumer to stop making any payments to his or her creditors. The defendants and their agents also instruct consumers to cease all communications with their creditors. In addition, the defendants and their agents advise consumers to send a change of address notification to their creditors and to list ADS’s address and phone number as the consumer’s new contact information, so that all creditor communications will be diverted to the defendants.

If a consumer signs up for the defendants’ program, the defendants require the consumer to provide ADS with authorization to debit the consumer’s bank account on a monthly basis by automatic bank draft. In many instances, the defendants have charged consumers an initial “setup fee” of either $199.00 or $399.00 when consumers enter the defendants’ program.

In addition to a “setup fee,” the defendants charge consumers a steep “enrollment fee” to enroll in the defendants’ debt settlement program, which the defendants collect in advance before settling consumers’ debts. Typically, the defendants’ contracts provide that the defendants will collect all of the consumer’s first three monthly payments (after the collection of the “setup fee”) or, alternatively, one-half of the consumer’s first six monthly payments (for a total of three monthly payments) as the defendants’ “enrollment fee.” The defendants collect these enrollment fees by directly debiting consume^s, bank accounts themselves and by depositing the fees into a bank account controlled exclusively by the defendants. Further, the defendants collect these “enrollment fees'” prior to settling consumers’ debts.

In numerous instances, even after collecting a total of three months’ payments from consumers as “enrollment fees,” the defendants have continued to directly debit consumers’ bank accounts and to designate these additional payments as defendants’ “enrollment fees,” even though such additional fees were not provided for in consumers’ contracts and were not otherwise authorized by consumers.

In addition to a “setup fee” and an “enrollment fee,” ADS also charges consumers a monthly “client support fee” of $49.00 per month, which is deducted from consumers’ monthly payments.

When consumers enroll in the defendants’ program, consumers are required to authorize a third-party payment processor, Global Client Solutions, LLC (“GCS”), to debit the consumer’s monthly payments from the consumer’s bank account. These monthly payments are then deposited by GCS into a “special purpose account” in the consumer’s name from which GCS, at the direction of ADS, disburses one or more payments to the consumer’s creditor if and when ADS settles a consumer’s debt. GCS charges consumers an initial account setup fee of $9.00, and a monthly fee of $8.35 for its services.

In almost all instances, however, GCS begins debiting consumers’ bank accounts only after ADS has already collected its “enrollment fee” in full, and, as noted above, in some instances ADS collects and retains payments for itself in excess of its stated “enrollment fee,” Thus, GCS begins to account for and disburse the consumer’s funds only after ADS has already directly debited and collected all of its “setup fee” and “enrollment fee,” and sometimes additional unauthorized amounts.

Despite repeated requests from many consumers, ADS does not provide account statements to its customers. Instead, ADS’s customers only receive account statements from GCS. Because ADS’s “setup fees” and “enrollment fees” are collected directly by ADS and are collected by ADS before consumers are boarded onto GCS’s system, the account statements consumers receive from GCS do not reflect the payments made by consumers directly to ADS.

Because GCS’s account statements do not reflect all payments made by consumers to ADS, consumers are often confused and misled by GCS’s account statements and do not understand that ADS has appropriated almost all of their initial payments as ADS’s fees.

In their telephone solicitations, the defendants lead consumers to believe that most of their payments will go directly to the consumers’ creditors but in fact, the defendants do not attempt to negotiate with, or make payments to, creditors until the consumer has made payments for an extended period of time. As a resiilt, because the defendants collect their fees up front, often a consumer must remain in the defendants’ program for a year or more and pay thousands of dollars in fees before any debt negotiation services are performed, if any are performed at all.

Even after paying substantial fees, consumers receive minimal services from the defendants. The defendants do not regularly communicate with their customers nor do they provide documentation or other information about communications with consumers’ creditors. Despite the defendants’ representations, consumers continue to be subject to regular collection calls and collection lawsuits. In fact, after enrolling in the defendants’ program, consumers are at greater risk of being sued by their creditors because – at the direction of the defendants – consumers stop sending payments to their creditors and stop communicating with their creditors.

Further, consumers’ debts continue to increase with nonpayment due to accumulating interest and late charges.

Because the defendants often fail to render beneficial services to consumers, many consumers drop out of the defendants’ program after a few months.

If consumers drop out of the defendants’ debt settlement program, the defendants charge consumers a cancellation fee of $199.00. In most instances, when consumers terminate the defendants’ program, the defendants refuse to provide consumers with refunds, and instead retain most, if not all, of consumers’ funds whether or not the defendants have rendered any useful services. On information and belief, the defendants have retained substantially more of consumers’ funds for the defendants’ benefit than they have disbursed to consumers’ creditors.”

If you would like to read the full complaint, click here.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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