The District government yesterday filed suit against a city-based company for allegedly failing to deliver on contracts that promised to help customers cut their bills by consolidating their debts into one monthly payment.

Infinity Resources Group Inc., a finance and loan company that provides consumer debt-consolidation loans, promised to provide clients with a loan if they meet certain conditions. But Bennett Rushkoff, senior counsel for the D.C. Office of the Corporation Counsel, said Infinity's agreement did not make clear that all customers would not be eligible for the loans.

"We allege that it was not a commitment at all and that Infinity had full discretion not to approve the consumer for a loan," he said. In addition, Rushkoff said Infinity allegedly failed to use fees paid upfront by consumers to monitor their payment and credit records.

Rushkoff said that while the city does not have a record of all the consumers who have been hurt by Infinity Resources, the number of complaints is exceptionally high.

"We're seeing more of this happen because of the rate of [personal] bankruptcies and the rate at which consumers spend," said Edward Johnson III, president of the Better Business Bureau in the District. "Here we have people who are trying to seek mechanisms through consumer services to get out from underneath the rock of debt."

The District is seeking an injunction to force Infinity to stop the alleged unlawful practices and to make refunds to consumers.

Infinity Resources "reviewed the charges against it and finds them to be without merit," company officials said in a prepared statement. "It looks forward to an opportunity to defend its fine record of service in court." The company also stated that it has been licensed by the District and "is in good standing."

In its agreement with consumers, Infinity Resources required them to enroll in a six-month debt-management program run by Ameridebt, a nonprofit credit counseling group in Germantown, city lawyers said. During that time, Ameridebt would make monthly payments to creditors on behalf of its customers. After five timely payments to Ameridebt, Infinity then would review the accounts of customers to determine whether to offer debt consolidation loans.

Infinity ranks fifth among the Better Business Bureau's most-inquired-about companies in the D.C. area, Johnson said. To date, 1,650 inquiry calls and 13 complaints have been filed with the bureau. Ameridebt is the second-most-called-about company, with 3,990 calls and 35 filed complaints.

Only Infinity Resources has been named a defendant in the District's suit, filed in D.C. Superior Court, because city laws prohibit suing a nonprofit organization. Pamela Schuster, director of Ameridebt, did not return repeated calls yesterday seeking comment about the organization's relationship to Infinity Resources.

The bureau said that Infinity has been "responsive to all complaints brought to its attention by the bureau" and that the "company usually refunded the deposited amount as a goodwill gesture." But Johnson added that "the pattern of complaints and consistent allegations would indicate that the basic cause of the complaints has yet to be eliminated."

Christine Harris received a refund from the company after complaining to the bureau, but she said it didn't take her long "to realize that this was strictly a moneymaking scheme on their part."

Harris said she turned to Ameridebt, which referred her to Infinity Resources, after deciding to pay off her bills so she could purchase a house. In no time, she said, creditors began calling her to tell her they hadn't received payments.

"I was just completely shocked," the Fredericksburg resident said. "Only late fees would show up on my bills even though I'd sent payments to Ameridebt. And I went to them because I trusted they would help."

Consumers with information about the business practices of Infinity Resources Group may contact Venita Ray or David Hyden at the Office of the Corporation Counsel at 202-727-3500.