CHARLESTON -– West Virginia Attorney General Darrell McGraw is suing a Texas debt settlement company to recover injunctive relief and restitution for consumers who he believes were misguided into paying exorbitant fees for help that never came.

The lawsuit targets Irving-based Able Debt Settlement Inc., which offered debt settlement but allegedly didn't deliver on the promises and then refused to refund any money.

"Debt settlement companies that simply sign consumers up, take their money and then fail to negotiate debts on behalf of consumers will not be tolerated in West Virginia," McGraw said in a statement. "Consumers in desperate financial situations should consult an attorney or non-profit credit counseling agency before paying any money to an unknown debt settlement company."

The Democratic attorney general's Consumer Protection Division began to investigate Able Debt Settlement in 2007 but was met with refusal to cooperate. That led to an injunction against the company.

Able tried to stop the investigation by asking the state Supreme Court to intervene, but the Court refused their petitions.

According to West Virginia law, debt settlement services are permitted by for-profit companies who can charge a fee of 2 percent of the payments made by consumers. McGraw is further alleging that Able Debt Settlement was charging more than the fee allowed by state law.

The debt settlement industry has arisen as consumer credit card debt has ballooned in the past few years, according to McGraw's office. Debt settlers claim to make repayment plans to help consumers repay outstanding debts, at a deep discount, to avoid being sued or filing for bankruptcy. Monthly payments are then made by consumers to the debt settlers in turn for which the debt settlers claim to negotiate with creditors to reduce the amount of debt owed.

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