Friday, April 19, 2013
|Attorney General's lawsuit against Credit Alliance Group|
|Temporary restraining order issued against Credit Alliance Group|
According to court documents filed by the State, CAG customers were promised that their payments to the firm would be deposited into separate accounts subject to their control and managed by the firm. State investigators learned, however, that those promises were not honored and that CAG deposited/commingled customers’ funds into its own operating account. As a result, customers had no actual control over their own money. Further, defendant Garner used customer funds to pay his personal bills.
Affected CAG clients eventually discovered they could not receive refunds on advance fees paid, nor on the accumulated funds the defendant promised to hold in trust to help manage and resolve their debts. The Office of the Attorney General’s own review of 52 CAG clients’ accounts out of an estimated 800 total accounts revealed that CAG owes these 52 clients more than $180,000 in escrowed funds alone.
The Office of the Attorney General brings this action under the Texas Deceptive Trade Practices Act. The defendant also failed to register as a debt management services entity with the Office of Consumer Credit Commissioner, a violation of the Texas Finance Code.