North Carolina Attorney General Roy Cooper filed a lawsuit against Advantage Debt Solutions Inc., a Charlotte, N.C.-based debt settlement firm, for allegedly charging upfront fees while failing to deliver any services.

Cooper filed the suit last week against the company and owner Anthony Krysinski, alleging the company was part of an illegal debt relief scheme. North Carolina residents allegedly paid more than $140,000 into the scheme while out-of-state consumers paid an estimated $1 million. Cooper’s lawsuit seeks a permanent stop to the activities of Advantage Debt in the state and the provision of refunds to consumers.

Wake County (N.C.) Superior Court Judge Michael O’Foghludha agreed last week with Cooper’s request to temporarily stop the defendants from offering debt negotiation or adjustment services in North Carolina. Krysinski and Advantage Debt are barred under a court order from entering into contracts with consumers or taking payments from consumers while the case is pending.

“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.”

Advantage Debt allegedly charged consumers about 15% of their total debt but rarely obtain 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.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry