AmeriDebt, the consumer credit counseling company, has filed for bankruptcy.

There are also allegations of shady business practices.

    Then the Internal Revenue Service, Federal Trade Commission and state regulators weighed in with a consumer alert about credit counselors. The FTC in November also sued AmeriDebt, one of the industries leaders, alleging it used deceptive marketing to bilk consumers.

    FTC Commissioner Thomas Leary said in testimony to Congress that AmeriDebt advertises its services as “free,” when in fact the company retains a consumer’s entire first payment as a “contribution.”

    Leary cautioned in his testimony that some companies use their non-profit status as a badge of trustworthiness to attract customers, who are then duped into paying large fees. Those fees are sometimes funneled to for-profit companies.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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