AG files suit against Florida debt settlement company

A Florida company that promised debt relief and didn't deliver is the subject of a lawsuit by the N.C. Attorney General's office.

According to the lawsuit filed Friday, the Consumer Law Group has collected more than $2.6 million from about 3,000 North Carolinians by promising to either reduce their debt or enroll them in debt management plans.

But according to the suit, Consumer Law Group rarely works out agreements with creditors and keeps substantial fees. It also claimed that its services were performed by attorneys when they were not and misled consumers into believing the program was affiliated with the government, according to the AG's lawsuit.

Attorney General Roy Cooper is asking the court for a temporary ban on all the defendants’ practices and a permanent ban to stop their debt adjusting and other deceptive practices. He is also seeking refunds for consumers, cancellation of all contracts, payment of civil penalties and a freeze of the company’s assets

Under North Carolina law, it's illegal for a business to charge upfront fees for debt adjusting or debt settlement. The law does allow qualified credit counselors to charge limited fees to help you set up a plan to make payments on your debt. The fees for such debt management plans are capped at an initial cost of $40 and monthly fees of 10 percent of your monthly payment up to $40.

To locate an accredited, non-profit credit counselor who may be able to set up a legitimate plan to manage your debts, the AG's office suggests contacting  the National Foundation for Credit Counseling at 1-800-388-2227 or on their website.