Attorney General Jay Nixon said AmeriDebt secretly functions as a profit-driven company in which "credit counselors" or "debt professionals" - untrained in such roles - sell debt-management plans for commissions.
On its Web site, AmeriDebt describes itself as a "nationally recognized non-Profit credit counseling company" whose "main goal is to help educate Americans on how to reduce, manage, and eliminate their debt."
AmeriDebt also says it is "one of the - if not the - fastest-growing credit counseling organizations in America," with some 90,000 customers now and about 400,000 clients since 1997.
The company also takes pride in what it says is its modern approach to credit rehabilitation, by going beyond credit cards to include such as medical bills.
But those claims are falling on deaf ears in the Show Me state, where State Attorney General Nixon is asking a judge to void any contracts between the company and Missouri residents and order restitution of money not already sent to creditors. The suit also seeks fines.
"With its high, hidden fees and lack of any significant credit counseling, AmeriDebt has served more as an anchor than a life preserver for many consumers," Nixon said in announcing the lawsuit, filed in circuit court.
Illinois officials filed a similar suit against Germantown, Md.-based AmeriDebt in February.
AmeriDebt attorney Rob Herrell was quick to respond, and says the organization is "surprised and disappointed" by the lawsuit.
"AmeriDebt has been in operation nationwide for more than six years and has an exemplary record of helping needy debtors negotiate lower interest rates and payments," said Herrell.
AmeriDebt furthermore says that it has a commitment to addressing consumer complaints, with "all outstanding complaints resolved in favor of the client."
Though AmeriDebt advertises no upfront fees for consumers, Nixon says the company downplays or hides that a consumer's first monthly payment goes to AmeriDebt and its affiliates. That fee, according to Nixon, is typically 3 percent of the total debt, or an average of $327.
Annually, an estimated 9 million Americans contact a credit-counseling agency - often the last resort for consumers before filing bankruptcy.