Investigators close Springfield debt-management firm

SPRINGFIELD, Mo. -- Pat Matney was $15,000 in debt and had just lost her job when she found Nation Wide Credit Counseling in the phone book in January.

Now, after paying the company $459 a month for the past eight months -- all but $20 a month of which was to be distributed to her creditors -- the Springfield woman is $26,000 in the hole.

On Friday, investigators sealed the Springfield debt-management company's doors as they searched the office while a police officer stood watch in the lobby, keeping employees and customers out. The office's phones rang unanswered.

Scott Holste, spokesman for Attorney General Jay Nixon, acknowledged the company is under investigation, but declined to reveal further details. No charges have been filed against Nation Wide, but court records indicate the company was in trouble long before Friday's search warrant was served.

In late July, Matney was sued by one of her creditors for not paying her bills. She said she suffered a stress-induced stroke because of the lawsuit, and in September she sued Nation Wide.

"I was totally floored when the sheriff showed up with my summons," Matney said.

Hers is among five pending suits against the company in Greene County Circuit Court seeking more than $80,000 in total damages. All allege Nation Wide failed to forward clients' payments to creditors.

Nation Wide settled at least two other suits, and in cases where the company has filed its response, Nation Wide denies the charges. Company owner Vickie Lind referred questions to her attorneys, who did not return calls seeking comment.

The Better Business Bureau of Southwest Missouri has processed 19 complaints about the company in the past three years.

Sixteen people have filed complaints with Nixon's office about Nation Wide.

The Consumer Federation of America said customer complaints about credit counseling services have surged 500 percent in the last 10 years.

Nixon's office responded to some of the complaints when it sued Internet-based AmeriDebt for fraud in September. Soon after, his office turned its attention to Nation Wide.

At Consumer Credit Counseling Services in Springfield, president and CEO Mike Cherry has watched the credit counseling industry grow from 200 companies a decade ago to more than 1,000 this year.

The industry serves an estimated 9 million Americans a year, its growth fueled in part by overall personal credit card debt approaching $700 billion.

Cherry said he doesn't want the industry tainted by what he calls "the bad apples." There are reputable options, he said. "There's night and day like in any industry."

He said red flags should wave if a company is for-profit, if it doesn't disclose its fees and if it isn't third-party certified.

And no company can repair credit, he said. All anyone can do is remove false information from credit reports, which individuals can do themselves for free.