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February 06,
2004
Attorney
General Abbott Obtains $1.3 Million Judgment Against Bogus
Credit Card Approval Company
U.S. Credit
and owners no longer solicit credit-needy Texas consumers
AUSTIN -
Texas Attorney General Greg Abbott has won a $1.3
million agreed
judgment and permanent injunction against a phony
credit card promoter that will require refunds to some
consumers whose personal checking accounts were unlawfully
debited for services not rendered. The legal action was
approved in a Houston district court late Tuesday.
U.S. Credit,
which Abbott sued in late July, falsely advertised in
newspapers, magazines and circulars nationwide that it
could obtain credit cards for consumers who had little or
no credit history, but provided no such service. Most
consumers affected live outside of Texas.
“Whether
you live in Texas or not, this Houston company solicited
business in Texas and elsewhere and was an insult to our
way of doing honest business here,” Abbott said. “This
judgment puts a stop to the underhanded, unlawful way the
company helped itself to consumers’ checking
accounts.”
The $1.3
million judgment requires the company, also known as E-Telemation,
and its owners, Michael C. Corbell and Robert F. Leaumont
Jr., to pay almost $450,000 in civil penalties,
attorneys’ fees and investigative costs. As a result of
Abbott’s action, they no longer conduct such business
practices in Texas. Consumers who originally filed
complaints about the scheme, or others who file new
complaints with the Attorney General, will be contacted
about refunds.
The
misleading advertisements regarding quick credit card
approvals prompted consumers to call U.S. Credit’s
toll-free phone number. The company’s phone attendants
asked consumers for basic information, but also said
checking account numbers before the approvals could be
expedited.
Consumers
were told the company needed the account numbers to verify
whether the caller actually had a bank account. Consumers
did not realize until later that the company debited their
accounts for $99 as an initial “processing” fee, then
$9 per month thereafter to maintain their “membership”
for a year. Over nearly two years, the company gleaned
about $1 million from unsuspecting consumers.
What
consumers got in return for their membership was a
“credit card kit,” which merely gave them a list of
banks to which they could apply for a credit card. No
consumer actually received a credit card from this
company.
View
Leaumont Final Judgment and Permanent Injunction
View
Corbell Final Judgment and Permanent Injunction
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