Bryan Cohen Apr. 26, 2013, 6:45pm
RALEIGH, N.C. (Legal Newsline) -- North Carolina Attorney General Roy Cooper on Thursday announced a court order against a Charlotte debt settlement firm that allegedly charged upfront fees but failed to deliver its services.
Last week, Cooper filed a lawsuit against Advantage Debt Solutions Inc. and Anthony Krysinski, the company's owner, alleging the company was part of an illegal debt relief scheme.
Consumers in North Carolina allegedly paid more than $140,000 into the scheme and out-of-state consumers paid about $1 million to the Charlotte company.
"Outfits that promise debt relief for an upfront fee most often end up driving consumers even deeper into debt," Cooper said in a statement. "Thanks to North Carolina's strong laws we're able to take action to stop these harmful schemes."
Wake County Superior Court Judge Michael O'Foghludha agreed Wednesday with Cooper's request to temporarily stop the defendants from offering debt negotiation or adjustment services in North Carolina.
Krysinski and Advantage Debt Solutions are barred under the court order from entering into contracts with consumers or taking payments from consumers while the case is pending.
Advantage Debt Solutions allegedly charges consumers about 15 percent of their total debts but rarely obtains the promised debt relief. In North Carolina, it is illegal to collect upfront fees for debt settlement services.
The company also allegedly failed to refund consumers after they canceled the program and requested refunds.
Cooper's lawsuit seeks a permanent stop to the activities of Advantage Debt Solutions in the state and the provision of refunds to consumers.
"Steer clear of anyone who tells you to stop paying your bills and give them your money instead," the attorney general said. "To get a handle on your debts, turn to a reputable non-profit credit counselor instead."