MONTGOMERY, Ala. (Legal Newsline) - Alabama Attorney General Troy King and the Alabama Securities Commission are awaiting a judge's ruling in a suit that alleges a debt settlement scheme involving over 15,000 customers.
Autauga County Circuit Judge Ben Fuller is considering a request for preliminary injunction against Prattville-based Allegro Law, LLC, Allegro Financial Services, LLC and Keith Anderson Nelms. King has already obtained a temporary restraining order.
The ban would prevent the defendants from the practice of debt settlement. The complaint says Allegro had customers stop making monthly payments so creditors would reclassify their accounts as less collectible and settle for a reduced monthly payment.
The "defendants are attempting to gain this benefit by purposefully and artificially lowering creditors' assessments of the quality of the customer debt, thereby inducing creditors to accept less to settle accounts," the complaint says.
"The consequence of this lowered credit standing is a lower credit rating for the consumer, more fees for the service provider, less money to the creditor, and more overall problems for the consumer."
Allegro law firm's Web site offered a debt settlement program which, the firm claims, would be handled through an attorney giving consumers a more "ethical" and "professional" approach.
"We contend that these defendants were operating a massive scheme that reached across our nation and unscrupulously targeted frightened and desperate consumers," King said.
The complaint alleges Allegro and Nelms have violated the Deceptive Trade Practices Act and the Sale of Checks Act, as well as soliciting clients in all 50 states without a license.
Nelms, a Montgomery resident is only licensed to practice in the state, a fact unknown to the various clients who subscribed to the financial service, King said.