A jury in Houston has returned a $13.8 million verdict against a credit repair business and its owner, finding they defrauded indebted Texans and failed to register with authorities in violation of state law.

The jury found that Jubilee Financial Management LLC, The Credit Card Solution (TCCS), Freedom from Debt Alliance and Robert M. Lindsey used illegal “debt invalidation” schemes that purported to help financially struggling Texans.

According to the information introduced at trial, the defendants assured customers that they could eliminate their credit card debts and restore their credit ratings. The defendants claimed they could help debtors exploit loopholes in the credit reporting system and pursue litigation against debt collectors for violations Fair Debt Collection Practices Act.

Simply filing lawsuits, the defendants falsely claimed, would allow their customers to erase their debts and reap thousands of dollars in court-awarded damages from debt collectors.

More than 700 people paid an average of $3,000 for the defendants’ fraudulent services. Because the defendants offered nothing of value – and charged thousands of dollars for the purported services – already struggling customers were worse off financially after paying TCCS.

Once a customer paid TCCS, the defendants promised to help customers send “form letters” to debt collectors and credit reporting agencies. The defendants claimed that the form letters would put the recipient on notice, which TCCS claimed would ultimately benefit customers financially.

After a week-long trial, the jury found that all four defendants violated both the Texas Deceptive Trade Practices Act and the Texas Credit Services Act. The jury also found that Lindsey and TCCS violated the Texas Business Opportunity Act. The latter violations stemmed from the defendants’ attempt to use customers to sell its fraudulent services to other financially strapped Texans.