Abbott announces $13.8M verdict
HOUSTON (Legal Newsline) - Texas Attorney General Greg Abbott announced on Tuesday that a Harris County jury has returned a $13.8 million verdict against a debt repair business and its owner.
The jury found that Jubilee Financial Management LLC, The Credit Card Solution, Freedom from Debt Alliance and Robert M. Lindsey allegedly used "debt invalidation" schemes that illegally claimed to help financially struggling Texas and that the business defrauded indebted Texans and did not register with authorities in a violation of state law.
The defendants allegedly assured customers that they would be able to eliminate consumers' credit card debts and restore their credit ratings. The defendants allegedly claimed that they could help debtors to exploit loopholes in the system of credit reporting and pursue litigation against debt collectors for violations of the Fair Debt Collection Practices Act.
The defendants allegedly made false claims that simply filing the lawsuits would allow customers to erase their debts and reap thousands of dollars in court-awarded damages from debt collectors.
More than 700 people allegedly paid an average of $3,000 for the defendants' services, often becoming worse off financially after paying. The defendants allegedly promised to help customers send "form letters" to credit reporting agencies and debt collectors, which they claimed would put the recipient on notice and ultimately benefit the customers financially.
The jury found that all four defendants violated both the Texas Credit Services Act and the Texas Deceptive Trade Practices Act. They also found that TCCS and Lindsey violated the Texas Business Opportunity Act after the two defendants allegedly tried to use customers to sell its services to other financially strapped Texans. Additionally, multi-level marketers must register with the Texas Secretary of State and obtain surety bonds to lawfully operate in Texas, which the defendants failed to do.