Friday, March 12, 2010

Debt Settlement Firm Has Assets Frozen by Alabama Attorney General's Office for Deceptive Practices

Alabama Attorney General's Office and Alabama Securities Commission filed a complaint against Keith Anderson Nelms for violation of the Deceptive Trade Practices Act. Mr. Nelms and his firms, Allegro Law LLC and Allegro Financial Services LLC, were advertising as a law firm, but were referring cases to another company, Americorp, which is not a law firm. In addition, Mr. Nelms is not licensed to practice law outside of Alabama. However, his clients were from across the United States.

Allegro promoted debt settlement, wherein clients are encouraged to stop making monthly payments in order to encourage the creditors to write off the debt, and settle for a reduced payment. This results in a lower credit score and additional problems for the consumer, but more fees for the service provider.

The complaint alleges that Mr. Nelms and Allegro have violated the Deceptive Trade Practices Act by using false and misleading representations made to consumers. The Sale of Checks Act was also violated in that any person engaging in a business that receives money as agent for obligors for the purpose of paying such obligors' bills, must obtain a license from the Securities Commission prior to conducting business in Alabama. Allegro did not have a license.

Attorney General Troy King said this ended "one of the largest debt settlement schemes in the nation."