Federal Court Ruling Deals Blow to Nonprofit Credit-counseling Agencies

By Jon Fogg, Capital News Service

A nonprofit credit-counseling agency run by the beleaugered Andris Pukke has lost a federal court battle.

U.S. District Judge Peter J. Messitte ruled in Polacsek v. Debticated that credit-counseling agencies may fall under the 1996 Credit Repair Organizations Act, which established strict guidelines for so-called “credit-repair organizations,” but exempted nonprofits.

Messitte wrote that Debticated qualified as a credit-repair organization and thus fell under the act. Debticated advertised itself as a nonprofit, but it and 10 other agencies funneled consumer fees to a for-profit processing business called DebtWorks, in Germantown, MD. DebtWorks, also owned by Pukke, posted gross revenues of more than $53 million in 2002.

For this complete story, please visit Federal Court Ruling Deals Blow to Nonprofit Credit-counseling Agencies.