Former Customers v AmeriDebt Founder, Andris Pukke

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AmeriDebt Founder Settles Lawsuit Over Alleged Hidden Fees

Case ID: 4600

Amount At Issue: $172,000,000.00

Category: Credit / Debt

Last Update: 01/13/2006

Country:

The founder of the credit counseling firm AmeriDebt agreed to pay $35 million to settle suits filed by regulators and former customers over the $172 million in allegedly hidden fees the company collected from financially strapped debtors. The money that the founder, Andris Pukke (PUCK'-ee), pays would go to a fund that will be used to reimburse the roughly 300,000 customers the Federal Trade Commission claimed AmeriDebt Inc. deceived.

Pukke, who made a fortune off businesses that catered to customers in debt, is also barred from working in credit counseling, debt management or telemarketing as part of the settlement.

The settlement came a day before a federal court in Greenbelt, Md., was set to hear the FTC's lawsuit against Pukke and a class action lawsuit filed against him by former AmeriDebt customers. The payment covers both cases, according to the FTC.

The agreement is subject to approval by the federal judge as well as by the court hearing Pukke's personal bankruptcy filing.

AmeriDebt filed for bankruptcy in 2004. The company's remaining clients have been shifted to another credit counseling firm.

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