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The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.
CAUSE NO. DC-14-14587
STATE OF TEXAS, § IN THE DISTRICT COURT
LOWERMYBILLS,INC.; EXPERIAN §
HOLDINGS, INC; EXPERIAN §
INFORMATION SOLUTIONS, INC.; §
CPL HOLDINGS, LLC dba "CORE § DALLAS COUNTY, TEXAS
DIGITAL MEDIA"; STEVEN B. §
HEYMANN, (Vice President of §
Compliance for Experian) Individually; §
STEVE KRENZER, (CEO of CPL §
Holdings, LLC and LowerMyBills); and §
MITCH VINER, Individually, §
Defendants. § 14th JUDICIAL DISTRICT
STATE'S FIRST AMENDED PETITION FOR CIVIL PENALTIES,
RESTITUTION AND INJUNCTIVE RELIEF,
TO THE HONORABLE JUDGE OF SAID COURT:
The STATE OF TEXAS, acting by and through its ATTORNEY GENERAL GREG
ABBOTT, and his Consumer Protection Division, files this First Amended Petition for Civil
Penalties, Restitution and Injunctive Relief, against LOWERMYBILLS, INC.; EXPERIAN
HOLDINGS, INC.; EXPERIAN INFORMATION SOLUTIONS, INC.; CPL HOLDINGS, LLC
(dba 'Core Digital Media"), STEVEN B. HEYMANN (Vice President of Compliance for
EXPERIAN), Individually. STEVE KRENZER (CEO of LowerMyBills), Individually, and
MITCH VINER, Individually, and respectfully show:
SUMMARY OF THE CASE
LOWERMYBILLS, Inc. (a wholly owned subsidiary of EXPERIAN between 2005 and
October 2012) is a self-described 'marketing lead generator" and consumer bounty hunter
whose business model is founded on luring, wrangling and capturing consumers' personal and
Plaintiffs First Amended Petition Page 1 of 24
Stare v. LowerMyBills and Experian, et at..
1/8/2015 8:17:44 AM
financial information and then selling and trading the consumer's personal information to third
parties (aka "partners") in exchange for a "bounty" payment and the partner's agreement to share
its own customers' personal information back with LOWERMYBILLS. Between 2007 and 2012,
LOWERMYBILLS, and various other EXPERIAN plc entities' including EXPERIAN
INFORMATION SOLUTIONS, INC., and EXPERIAN HOLDINGS, INC., (collectively,
"EXPERIAN") used EXPERIAN's position in the consumer credit services industry coupled
with promises to help consumers "Erase" their debts, to induce consumers seeking to resolve
their debts and improve their credit ratings with EXPERIAN, to provide EXPERIAN their
personal financial information and trust EXPERIAN's "LOWERMYBILLS" to unite the
consumer with an "Approved Debt Relief Partn er!"2
Between 2007 and 2013, CREDIT ALLIANCE GROUP, INC.3, headquartered in Dallas,
Texas, was one of LOWERMYBILLS' so-called "Approved Debt Relief Partners!" to whom
Defendants lured, wrangled, captured and sold thousands of consumers' personal financial
information and otherwise facilitated consumers' entrusting their personal savings and retirement
funds to CAG to "erase" their debts and improve their credit scores. Defendants failed to
disclose to these consumers that their information would be sold to third parties such as CAG.
Defendants also confused, misled and/or failed to disclose to consumers that CAG was in fact
The Experian Defendants in this action are affiliates of Experian plc. Experian plc is not a party.
2 Between 2010 and 2012, Defendant Steve Krenzer served as President of "Experian Interactive Media" and
Defendant Steven Heymann (former in-house counsel for LowerMyBills) served as Vice President, Compliance and
Information Practices for Experian North America and Experian Services Corporation. Experian was directly
involved with LowerMyBills including offering LowerMyBills' partners the opportunity to use the Experian and
LowerMyBills trademarks and logos. In October 2012, CPL Holdings (dba "Core Digital Media") took over
ownership of LowerMyBills from Experian through a management buyout and Defendant Krenzer took a new
position as CEO of both CPL Holdings (dba "Core Digital Media") and LowerMyBills.
The State of Texas sued Credit Alliance Group, Inc., ("CAG") and its CEO, Shane Garner, in 2013 for violations
of the Texas Deceptive Trade Practices Act, and Texas Finance Code, related to CAG's illegal "debt relief services"
business, and obtained a Final Judgment and Permanent Injunction in the case in 2014, including a $36million dollar
judgment for penalties and consumer restitution. The judgment is attached as Exhibit A.
Plaintiffs First Amended Petition Page 2 of 24
State v. LowerMyBills and £iperian, et at.
prohibited by law from engaging in the very "debt relief' services for which Defendants
endorsed CAG as an "approved partner4."
Defendants sold the financial and personal information of thousands of consumers across
the country to CAG as part of the scheme5. Defendants also obtained CAG's own contracted
customers' private personal information from CAG (for Defendants' own use) without the
customers' knowledge or express consent. When consumers have discovered and complained to
Defendants about Defendants' unauthorized sale of the consumers' information to third parties,
Defendants have responded by asserting they have no control over their third party "partners" use
the consumers' personal information sold to the third parties by Defendants67. This is not the
only time EXPERIAN has been involved in dangerously harmful unauthorized sale of
consumers' personal and financial information - in 2013, another EXPERTAN subsidiary sold
names, social security numbers and other sensitive personal information of at least hundreds of
thousands of Americans to third parties in Vietnam with a history of involvement in identity
theft Using the LOWERMYBILLS and EXPERIAN logos on its marketing and contract
materials and representing itself as a member of the FDIC, CAG promised to hold customers'
Defendants also failed to disclose CAG's "F" rating with the Better Business Bureau and that a CAG advertisement
was prohibited by Facebook as deceptive and misleading.
According to reports, this is not the only time Experian has been involved in the sale of consumers' personal
information to unscrupulous third parties resulting in harm to consumers - in 2013, another Experian subsidiary sold
names, social security numbers and other sensitive personal information of at least hundreds of thousands of
Americans to third parties in Vietnam with a history of involvement in identity theft. Krebs, Brian (20 October
2013). "Experian Sold Consumer Data to ID Theft Service'. krebsonsecurity. corn.: Schwartz, Mathew Zsperian
Sold Data To Vietnamese ID Theft Ring". mlhrrn at/on Week (UBM Tech); Seltzer, Larry "Experian caught up in ID
theft investigation". ZDNet (CBS Interactive); Masnick, Mike 'How Experian Sold Consumer Data To Popular ID
Theft Service". Techdirt (Floor64, Inc.); Doctorow, Cory "Experian sold consumer data to identity thieves' service".
See http:!/www.businessconsumeral liance.oru'complaints.lowermvbillscorn-inc- 13 130473
EXPERIAN also accesses millions' of Americans' personal information through its involvement with the
Affordable Care Act's "healthcare.gov" website - See http:!/www.pblica.org/article/heres-whyJçalthcaregov
Plaintiffs First Amended Petition Page 3 of 24
State v. LowerM Bills and Experian. et a!..
funds in trust and use the funds to negotiate debt settlements at pennies on the dollar.
Hardworking Americans in Texas and across the country (including elderly, widows, disabled
military veterans, recent college graduates and families trying to get by) entrusted thousands of
hard-earned dollars to CAG, including drawing funds from a retirement account at an early
withdrawal penalty, in order to resolve their debts and improve their credit score with Experian.
Instead, CAG's President and CEO failed to place customers' funds in trust accounts, co-mingled
and used customer funds for personal benefit and millions of dollars of consumers' personal
savings disappeared, some faced lawsuits from their creditors and their credit scores fell further
leaving them in a far worse position than before they visited LOWERMYBILLS' website or
entrusted their money to CAG.
As a result of Defendants' deceptive trade practices, thousands of honest hard working
consumers who entrusted their retirement and savings to CAG, in order to resolve their debts and
improve their credit scores, lost millions of dollars in personal savings entrusted to CAG,
incurred further costs, and suffered further damage to their personal credit ratings - leaving many
in a far worse position, when it was revealed to the consumers (after CAG's filing of Chapter 7
bankruptcy in late 2013) that CAG's entire business and "approved partnership" with
Defendants was a sham and their funds had disappeared8. At present, the EXPERIAN
Defendants continue to fail to disclose to CAG's customer victims the exact nature of the role
EXPERIAN played in CAG's scheme and have made no effort to disclose or repair the harms to
the hundreds and thousands of honest, hard-working Americans whose life savings and credit
scores (with EXPERIAN) have been devastated as a result - in some circumstances these
Defendants appear to continue to attempt to shield and hide their deceptive trade practice
8 CAG filed Chapter 7 Bankruptcy in August 2013. Not to be confused with the bankruptcy proceeding, this action
by the State of Texas is a police and regulatory matter which cannot be removed to a federal district court or
bankruptcy court pursuant to 28 U.S.C. § 1452(a).
Plaintiffs First Amended Petition Page 4 of 24
State v. LowerMyBills and Experian, et al.
schemes by spuriously claiming that such fraudulent acts are protected industry trade secrets9.
1. DISCOVERY CONTROL PLAN
1.1 Pursuant to Texas Rule of Civil Procedure 190.1, discovery in this case is
intended to be conducted under Discovery Level 3.
1.2 This case is not subject to the restrictions of expedited discovery under
TRCP 169 because:
a) The relief sought by the State includes non-monetary injunctive relief; and
b) The State's claims for monetary relief including penalties, consumer redress and
attorneys' fees and costs are in excess of $1,000,000.00.
2. NATURE AND PURPOSE OF THIS SUIT
2.1 This is an enforcement action brought by Texas Attorney General Greg Abbott,
through his Consumer Protection Division, in the name of the STATE OF TEXAS and in the
public interest pursuant to the authority granted by § 17.47 of the Texas Deceptive Trade
Practices-Consumer Protection Act, TEX. BUS. & COM. CODE ANN. § 17.41 et seq. (hereafter,
"DTPA") upon the ground that Defendants have engaged in false, deceptive and misleading acts
and practices in the course of trade and commerce as defined in, and declared unlawful by,
§17.46(a) and (b) of the DTPA. The Texas Attorney General is authorized to seek temporary
restraining orders, civil penalties, redress for consumers and other identifiable persons harmed by
Defendants acts and practices, and other injunctive relief in enforcement actions, such as this
one, filed pursuant to Section 17.47 of the DTPA. Further, in such enforcement actions, this
Court is authorized to make such additional orders or judgments as are necessary to compensate
EXPERIAN's website boasts its approach to Corporate Responsibility "ensures that we take careful account of
our impact on consumers" and is founded on the principle that, "what we do is only as important as how we do it."
Plaintiff's First Amended Petition Page 5 of 24
State v. LowerMvBills and Experian, et al.
identifiable persons for actual damages, or to restore money or property, which may have been
acquired by means of any unlawful act or practice. TEX. BUS. & COM. CODE ANN. § 17.47(d).
3.1 Defendant LOWERMYBILLS, INC., is a Delaware corporation and can be
served by serving its registered agent, CT Corporation System, 818 West '7" Street, 2id
Floor, Los Angeles, CA 90017, or wherever it may be found.
3.2 Defendant EXPERIAN HOLDINGS, INC., is the EXPERIAN entity that
technically owned Defendant LOWERMYBILLS between 2005 and October 2012 when it was
sold to Defendant CPL HOLDINGS, LLC dba CORE DIGITAL MEDIA, and can be served by
serving its registered agent, The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware, 19801, or wherever it may be found.
3.3 Defendant EXPERIAN INFORMATION SOLUTIONS, INC., is a Delaware
Corporation and recipient of a direct law enforcement and regulatory notice and inquiry
regarding the relationship between EXPERIAN, LOWERMYBILLS and CREDIT ALLIANCE
GROUP, INC., a Texas corporation engaged in a scheme with LOWERMYBILLS and
EXPERIAN to buy, sell and trade consumers' personal information, and induce consumers to
entrust funds to Credit Alliance Group as an "Approved Debt Relief Partner" of Experian and
can be served by serving its registered agent, The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, or wherever
it may be found.
3.4 Defendant STEVEN BRIAN HEYMANN, individually, is a former in-house
lawyer for Defendant LOWERMYBILLS, for Vice President of Compliance for Defendant
EXPERIAN INFROMATION SOLUTIONS, INC., whose paycheck is currently signed by
EXPERIAN SERVICES CORPORATION as Vice President of Compliance and Information for
Plaintiffs First Amended Petition Page 6 of 24
State v. LowerMyBills and Experian, et al..
EXPERIAN North America, a part of EXPERIAN plc, and can be served at his office at 475
Anton Blvd, Costa Mesa, California, 92626, or wherever he may be found.
3.5 Defendant STEVE KRENZER, individually, is a former employee of the
EXPERIAN Defendants and presently CEO of Defendants LOWERMYBILLS, Inc., and CPL
HOLDINGS, LLC. (dba "CORE DIGITAL MEDIA") and can be served at his offices at12181
Bluff Creek Dr., Suite 250, Playa Vista, CA 90094 or wherever he may be found.
3.6 Defendant MITCH VINER, individually, is a former employee of the
EXPERIAN Defendants and employed by LOWERMYBILLS, Inc., and CPL HOLDINGS,
LLC. (dba "CORE DIGITAL MEDIA") and can be served at his offices at12181 Bluff Creek
Dr., Suite 250, Playa Vista, CA 90094 or wherever he may be found.
3.7 Defendant CPL HOLDINGS, LLC (dba "CORE DIGITAL MEDIA"), is a
Delaware limited liability company, doing business as "Core Digital Media" and can be served
by serving its Registered Agent, The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware, 19801, or wherever it may be found.
4.1 Venue of this suit lies in Dallas County, Texas, for the following reasons:
a. Under TEX. CIV. PRAC. & REM. CODE ANN. § 15.002(a)(1), venue is proper
because all or a substantial part of the events or omissions giving rise to the claim
occurred in the county of suit; and
b. Under DTPA § 17.47(b), venue is proper because Defendants have done
business in the county of suit.
5. PUBLIC INTEREST
5.1 Plaintiff, STATE OF TEXAS, has reason to believe that Defendants are engaging
in, have engaged in, and may continue to engage in, the unlawful acts or practices set forth
Plaintiffs First Amended Petition Page 7 of 24
State v. LowerMyBills and Experian. et a!.
below, that Defendants have, by means of these unlawful acts and practices, caused damage to or
acquired money or property from identifiable persons, and that Defendants' conduct adversely
affects the lawful conduct of trade and commerce, thereby directly or indirectly affecting the
people of this State. Therefore, the Consumer Protection Division of the Office of the Attorney
General of the State of Texas believes and is of the opinion that these proceedings are in the
6. TRADE AND COMMERCE
6.1 Defendants have, at all times described herein, engaged in trade and commerce as
that term is defined by § 17.45(6) of the DTPA.
7. ACTS OF AGENTS
7.1 Whenever it is alleged in this petition that Defendants did any act or thing, it is
meant that Defendants, jointly and severally, performed or participated in such act or thing or
that such act was performed by the officers, agents or employees of said Defendant, and in each
instance, the officers, agents or employees of said Defendants that were then authorized to act
did in fact act on behalf of Defendants or otherwise acted under the guidance and direction of the
8. NOTICE BEFORE SUIT
8.1 The Consumer Protection Division informed Defendants in general of the alleged
Texas law is well settled that corporate agents may be held personally responsible and individually liable under the DTPA for
wrongful acts. Light v. Wilson. 663 S.W.2d 813 (Tex. 1983). It is not necessary to pierce the corporate veil in order to impose
personal liability. Leyendecker v. Wechter. 683 S.W.2d 369 (Tex. 1984). Liability of such a corporate officer is based on his
own actions not his status as an agent. It is not necessary for such an employee to act knowingly or intentionally in order to be
personally liable. Miller v. Keyser, 90 S.W.3d 712 (Tex. 2002). Furthermore, actionable DTPA violations may include both
current misrepresentations as well as a failure to perform a future promise. Formosa Plastics v. Presidio, 960 S.W.2d 41 (Tex.
1996). DTPA § 17.46(c)(l) authorizes Texas courts, in actions brought by the Attorney General's Consumer Protection Division,
to be guided to the extent possible. by the interpretations given by the Federal Trade Commission and federal courts to the
Federal Trade Commission Act. (15 U.S.C.A. § 45(a)(1)). Federal courts have often held principals or controlling persons of
corporations individually liable under the FTCA for the wrongful and deceptive actions of the businesses they control on the
basis that they should have had knowledge or awareness of the misrepresentations. See FTC v. Amy Travel, 875 F.2d 564 (7th
Cir. 1988), and FTC v. Publishing Clearing House, 104 F.3d 1168 (9th Cir. 1997), and FTC v. American Standard. 874 F.Supp.
1080 (C.D. Cal. 1994), and FTCv. Pioneer Enterp., 1992 WL 372350 (D. Nev. 1992).
Plaintiff's First Amended Petition Page 8 of 24
State v. LowerMyBills and Experian, et a!..
unlawful conduct described below, at least seven days before filing suit, as may be required by
§ 17.47(a) of the DTPA.
9. APPLICABLE LAW
9.1 Plaintiff, is authorized to bring action to restrain, by temporary restraining order,
temporary injunction, and permanent injunction, deceptive acts and practices in the business of
trade and commerce pursuant to § 17.47(a) of the DTPA.
9.2 This Court is authorized, pursuant to § 17.47(d) of the DTPA, to "make such
additional orders or judgments as are necessary to compensate identifiable persons for actual
damages or to restore money or property, real or personal, which may have been acquired by
means of any unlawful act or practice."
9.3 DTPA Section 17.47(c)(l) provides for civil penalties to the State of Texas of up
to $20,000.00, per violation, for each violation of the DTPA by each Defendant;
9.4 DTPA Section 1 7.47(c)(2) further provides for an additional civil penalty in an
amount up to $250,000.00 against each Defendant when the Defendant's acts or practices were
calculated to acquire or deprive money or other property from consumers who were 65 years of
age or older when the act or practice occurred.
9.5 TEX. FIN. CODE ANN. § 394.203(b) provide that, "The business of providing
debt management services is conducted in this state if the debt management services provider
solicits or contracts with consumers located in this state."
9.6 TEX. FIN. CODE ANN. § 394.204(a) provides that, "A person, regardless of
whether located in this state, may not provide debt management services to a consumer in this
state unless the person is registered with the commissioner."
9.7 TEX. FIN. CODE ANN. § 394.202(6) defines 'Debt Management Service' to
mean, "a service in which a provider obtains or seeks to obtain a concession from one or more
Plaintiffs First Amended Petition Page 9 of 24
State v. LowerMvBills and Experian, et at..
creditors on behalf of a consumer."
9.8 TEX. FIN. CODE ANN. § 3 94.203(e) provides that, "This subchapter applies to a
person who seeks to evade its applicability by any device, subterfuge, or pretense."
9.9 TEX. FIN. CODE ANN. § 394.213 requires that, "A provider has a duty to a
consumer who receives debt management services from the provider to ensure that client money
held by the provider is managed properly at all times."
9.10 TEX. FIN. CODE ANN. § 394.215(a) provides that, "An agreement for debt
management services between a consumer and a person that is not registered under this
subchapter is void."
9.11 TEX. FIN. CODE ANN. § 394.215(b) provides that, "A consumer is entitled to
recover all fees paid by the consumer under a void agreement, costs. and reasonable attorney's
9.12 TEX. FIN. CODE ANN. § 394.2 12(9) states that, "A provider may not engage in
an unfair, deceptive or unconscionable act or practice in connection with a service provided to a
10.1 In support of this petition, the State relies upon and adopts by reference for all
purposes the attached exhibits as follows:
(a) Exhibit A, Agreed Final Judgment and Permanent Injunction in State of Texas v.
Shane Garner and Credit Alliance Group, Inc..
(b) Exhibit B, Letter of February 11, 2010, from the State of Maine Department of
Professional and Financial Regulation, Bureau of Consumer Credit Protection to
Experian Information Solutions, Inc. and Steve Krenzer, General Manager,
Experian Interactive Media and LowerMyBills.com;
(c) Exhibit C, Letter of February 19, 2010 from Steven Heymann, Vice President of
Compliance and Information Practices, Experian Interactive Media, to State of
Maine, Department of Professional and Financial Regulation, Bureau of
Plaintiffs First Amended Petition Page 10 of 24
State v. LowerMyBills and Experian. et aL.
Consumer Credit Protection;
(d) Exhibit D, CAG Customer Enrollment Marketing Packet and 2009 Contract;
(e) Exhibit E, Letter of November 2, 2011, from the North Carolina Attorney General
to CAG re CAG's unlawful and criminally prohibit debt relief services in North
(fj Exhibit F, Vermont Attorney General's February 23, 2010, "Assurance of
Discontinuance" of illegal debt relief services with CAG singed and filed in
Superior Court in Washington County, Vermont.
11. FACTUAL BACKGROUND
11.1 Between 2007 and October 2012, Defendants LOWERMYBILLS. Inc.. a wholly
owned subsidiary of EXPERIAN at the time), EXPERIAN INFORMATION SOLUTIONS, Inc.,
and EXPERIAN HOLDINGS, Inc. (collectively, "EXPERIAN") along with individual
Defendants STEVE KRENZER (current CEO of LOWERMYBILLS and CPL HOLDINGS and
former Manager of EXPERIAN INTERACTIVE MEDIA) and STEVE HEYMANN, (Vice
President of Compliance and Information Practices for EXPERIAN NORTH AMERICA and
EXPERIAN SERVICES CORPORATION), used EXPERIAN's position in the consumer credit
industry, along with advertisements targeted at consumers with significant credit card debt, to
induce consumers seeking to resolve or "erase" their debts and improve their credit ratings to
provide EXPERIAN with their financial and other personal information in order to be "matched"
with one of EXPERIAN's "approved debt settlement partners."
11.2 In October 2012, Defendant CPL HOLDINGS, INC. took over ownership of
LOWERMYBILLS from EXPERIAN through a management buyout. Defendant STEVE
KRENZER also moved from EXPERIAN to become the CEO of CPL HOLDINGS LLC (dba
"CORE DIGITAL MEDIA") and CEO LOWERMYBILLS as part of the management buyout.
11.3 Between 2007 and January 2013, Credit Alliance Group, Inc., (hereafter, "CAG")
a Texas corporation headquartered in Dallas, Texas, was one of LOWERMYBILLS' "Approved
Plaintiff's First Amended Petition Page II of 24
State v. LowerMyBills and Experian, ci at..
Debt Relief Partners." Defendants deceptively captured and sold the financial and personal
information of thousands of consumers across the country to CAG as part of a scheme to induce
the consumers to sign debt relief service contracts and entrust their assets to CAG.
11.4 Defendants also deceptively captured and sold the private information of Texas
consumers to its other debt relief partners and then induced their other debt relief partners to
disclose the private information of their own customers back to Defendants.
11.5 Defendants first drew consumers to the LOWERMYBILLS website with various
Banks Writing off Billions in Credit Card Debt!
Find Out How Much of Your Debt Can Be Erased.
If you have $10,000 or more in credit card debt, you probably qualify
to have a large amount of that debt reduced. Credit card companies
don't want you to know this because they are afraid everyone who
qualifies will take advantage. If you have credit card debt you may
be surprised at how much your debt can be lowered.
Reduce Your Debt
11.6 Once the consumer was lured to the LowerMyBills.com website, Defendants
wrangled the consumer's personal information with promises of "Bigger Savings" and
assurances that "You are 90 seconds away from better results!" if the consumer input her
financial and personal identifying information into the LowerMyBills.com website to be
"matched" with Experian's "Approved Debt Relief Partner."
11.7 The webpage lures the consumer into providing her personal information one step
at a time: first only asking for your zip code and amount of debt with no disclosure the
consumer's personal information may be used or shared with anyone. The consumer was next
sent to a page promising "Better Results!" as soon as the consumer input her name, email and
11.8 Next, the consumer was sent to yet another page where. in order to obtain the
Plaintiffs First Amended Petition Page 12 of 24
State v. LowerMyBills and Experian, et al..
consumer's physical address, the webpage promised "CONGRATULATIONS (consumer's
nameJ, you are now one step closer to a debt-free ljfe. Please complete this page to qualify for
faster debt relief and the most accurate savings quotes." Nowhere did this page disclose that
LOWERMYBILLS's and EXPERIAN's efforts to wrangle the consumer's personal information
were part of a scheme to turn the consumer's sensitive personal and financial information over to
third parties in exchange for a bounty payment.
11.9 Defendants not only failed to disclose that consumers' information would be sold
to its CAG "partners", but also failed to disclose Defendants provided the same CAG "partner"
with marketing strategy services encouraging even more unwelcome and unauthorized frequent
telemarketing solicitations to facilitate CAG closing the consumer into a void and fraudulent
11.10 Even upon inquiry from law enforcement in the State of Maine, HEYMANN,
KRENZER and the EXPERIAN Defendants responded by misrepresenting their relationship
with CAG and failing to disclose that Defendants were actively involved in the procurement of
debt relief services including providing CAG with marketing strategy services to encourage
increased telemarketing solicitations in order to facilitate CAG closing consumers into a void
and fraudulent contract under which the consumer would entrust their hard earned savings to
CAG and requiring CAG to share its customer information back to Defendants without the
11.11 Defendants were informed directly by CAG, and failed to disclose to consumers,
that CAG had judgments against it for violating financial services laws.
11 .12 Defendants also continued to sell consumers' information to CAG. and endorse
CAG as an approved debt relief partner, even after they were informed CAG had judgments
against it for violating financial services statutes.
Plaintiff's First Amended Petition Page 13 of 24
State v. LowerMvBills and Fiperian. et al..
11.13 Today, LOWERMYBILLS continues to use such practices as described above to
capture and sell consumers' personal and financial information. Now, if a consumer seeking debt
relief attempts to leave the LOWERMYBILLS website without providing her complete personal
information, that attempt is rejected and a conspicuous pop-up window appears on the computer
screen asking "Are you sure you want to leave this page?" along with a message from the
LOWERMYBILLS.com webpage stating, "If you would like immediate assistance, please call
11.14 While LOWERMYBILLS uses this pop-up window to prohibit consumers from
leaving its website without providing their complete personal information, LOWERMYBILLS
fails to use the same type of pop-up window to disclose how it will use your information, and
that it intends to seek a bounty payment for delivering your information to third parties for
solicitation purposes. By its own admission. LOWERMYBILLS' alleged "disclosures" are
hidden on an entirely separate maze of webpages the consumer may never see, nor agree to,
before providing their personal information11.
11.15 Using the LOWERMYBILLS and EXPERIAN logos on its marketing materials
and contracts and misrepresenting itself as a member of the FDIC, CAG promised to hold
customers' funds in trust and use the funds to negotiate debt settlements at permies on the dollar.
11.16 After providing their information on the LOWERMYBILLS website or receiving
CAG marketing materials with the LOWERMYBILLS/EXPERIAN logos, hardworking
Americans in Texas and across the country (including elderly, widows, disabled military
veterans, recent college graduates and families trying to get by) entrusted thousands of hardearned
dollars to CAG, including drawing funds from a retirement account at an early
An internet search for "complaints against LowerMyBills" yields multiple webpages with consumer complaints
against LowerMyBills for stealing and selling consumers' personal information to third parties who then bombard
the consumers with phone solicitations as well as complaints that LowerMyBills itself then inundates consumers
with its own harassing solicitation emails.
Plaintiff's First Amended Petition Page 14 of 24
State v. LowerMyBills and Experian. el al.
withdrawal penalty, in order to resolve their debts and improve their credit score with
11.17 Unknown to consumers, despite its status as an EXPERIAN/LOWERMYBILLS
"Approved Debt Relief Partner," CAG was prohibited by Texas law from offering, contracting
or charging consumers for debt relief services.
11.18 CAG's business practices were also prohibited by criminal and civil laws in other
states. The State of North Carolina sent CAG cease and desist letters cautioning that its business
practices constituted a criminal fffl52 but Defendants failed to disclose this information to
consumers and continued selling North Carolina consumers? information to CAG.
11.19 The State of Vermont assessed a $40,000.00 penalty and secured a settlement
agreement from CAG, filed in State court in Vermont, for its unlawful practices'3. Despite the
unlawful nature of CAG's practices under Vermont law, Defendants sold Vermont consumers?
information to CAG, endorsed CAG as an "Approved Partner" and failed to disclose CAG's
illegal conduct in Vermont to consumers.
11.20 In early 2010, the State of Maine sent a letter directly to EXPERIAN, addressed
to Defendant EXPERIAN INFORMATION SOLUTIONS, Inc. (at its Allen, Texas offices) and
Defendant STEVE KRENZER, (then President of Experian Interactive Media, and current CEO
Defendants of LOWERMYBILLS and CPL HOLDINGS), notifying EXPERIAN, KRENZER,
HEYMANN, VINER and LOWERMYBILLS that CAG was illegally providing unlicensed debt
relief services to consumers in the State of Maine using the EXPERIAN and LOWERMYBILLS
logos and confusing both consumers, and law enforcement authorities, as to EXPERIAN and
LOWERMYBILLS' ownership and affiliation with CAG'4.
12 See attached example of such letters at Exhibit E
D See Exhibit F
14 See Exhibit B.
Plaintiffs First Amended Petition Page 15 of 24
State v. LowerMyBills and Experian, et al..
11.21 Upon receipt of this information, while Defendant HEYMANN, Vice President of
Compliance and Information Practices for EXPERIAN, did send a response letter to the State of
Maine on EXPERIAN's behalf15, KRENZER, HEYMANN, VINER and EXPERIAN took no
action to disclose to consumers that CAG, its "Approved debt reliefpartner", engaged in illegal
debt relief business practices.'6
11.22 Defendants did not even inform residents of Maine (personally "matched" or
contracted with CAG through LOWERMYBILLS), about the letter from Maine, the fact CAG
was prohibited by law from providing debt relief services in Maine, or the fact CAG was not
owned by LOWERMYBILLS.
11.23 Instead, DEFENDANTS continued causing confusion and misunderstanding by
matching, endorsing and referring consumers to CAG as an EXPERIAN "Approved debt relief
partner" and continued capturing, selling and trading consumers' personal and financial
information with CAG.
11.24 DEFENDANT VINER, an employee of EXPERIAN in February 2010 (and
current employee of LOWERMBTLLS), had knowledge CAG confused consumers into
contracting with CAG through the use of EXPERIAN and LOWERMYBILLS logos on CAG
marketing and contract materials but failed to disclose to those consumers that CAG was neither
owned by the EXPERIAN DEFENDANTS, nor authorized to use the EXPERIAN
DEFENDANTS trademarks or logos in February 2010.
11.25 The EXPERIAN DEFENDANTS, as well as Defendants HEYMANN,
KRENZER and VINER, also continuously solicited Texas consumers for debt relief services
See Exhibit C.
16 EXPERIAN merely emailed CAG that it needed to obtain a license in Maine and that CAG would need to sign a
contract authorizing CAG to use the EXPERIAN and LOWERMYBILLS logos in CAGs marketing schemes. CAG
later executed EXPERIANs required trademark and logo licensing agreement and returned it to EXPERIAN
Plaintiffs First Amended Petition Page 16 of 24
State v. LowerMyBills atld Experian. et at..
between February 2010 and October 2012, without disclosing that DEFENDANTS' solicitations
were prohibited by law due to DEFENDANTS' failure to seek or obtain a registration to engage
in such solicitations. The CPL HOLDINGS Defendants solicited continuously solicited Texas
consumers for debt relief services between February 2010 and October 2012, without disclosing
that DEFENDANTS' solicitations were prohibited by law due to DEFENDANTS' failure to seek
or obtain a registration to engage in such solicitations.
11.26 Further, Defendant HEYMANN's letter to Maine (on behalf of EXPERIAN,
LOWERMBILLS and KRENZER) falsely and affirmatively misrepresents their relationship
with CAG (and their other debt relief partners) to law enforcement authorities for the State of
Maine by reporting that "LowerMyBi!s.cotn is strictly a lead generator and is not involved in
any other way with the provider or their services17'
11.27 In October 2010, EXPERIAN was notified by CAG, in writing, that judgments
had been entered against CAG for violation of financial services related laws. Nonetheless,
Defendants still failed to disclose this information to consumers, continued to endorse CAG as a
debt relief services provider, and continued to sell consumers' information to CAG.
11.28 While Defendants captured and sold consumers' private personal information to
CAG and represented CAG to consumers as an "approved" debt management services partner,
Defendants continued causing confusion and misunderstanding that CAG was authorized by law
and properly registered with the State of Texas (where CAG was headquartered) to provide debt
11.29 While Defendants sold North Carolina consumers' financial and personal
information to CAG, and endorsed CAG to North Carolina consumers for debt management
services, Defendants further failed to disclose that CAG's business practices also violated civil
17 See Exhibit C, page 2.
Plaintiffs First Amended Petition Page 17 of 24
State v. LowerMyBills and Experian, et al.
and criminal laws of the State of North Carolina.
11.30 Although CAG's contracts and marketing material falsely represented itself to be
a "Member. FDIC," Defendants failed to disclose to consumers that CAG was not, in fact, ever a
Member of the FDIC'8.
11.31 Even after Defendant CPL HOLDINGS LLC (dba "Core Digital Media") took
over ownership of LOWERMYBILLS in October 2012, and Defendant KRENZER took over as
CEO of Defendants LOWERMYBILLS and CPL HOLDINGS, LOWERMYBILLS continued to
sell and trade consumers' financial and personal information to CAG in Dallas, Texas, continued
to endorse and market CAG's debt relief services to consumers, and took no action to disclose to
consumers that CAG engaged in illegal debt relief business practices.
11.32 While Defendants failed to halt their deceptive trade practices and the illegality of
CAG's business and fraudulent nature of its contracts to consumers. Defendants did fly their
Senior Account Manager for CAG, CODY KREBS, to Dallas, Texas to wine and dine CAG's
President, SHANE GARNER, in Dallas to cultivate Defendants' partnership with CAG.
11.33 As a result of Defendants misrepresentations; failures to disclose; andlor other
deceptive trade practices as described herein, Defendants violated consumers' rights to privacy
by capturing, tracking and selling their personal information to third party debt relief partners as
"leads" and subjected consumers to repeated unauthorized telemarketing solicitations from those
third party debt relief partners.
11.34 By use of the acts and practices described above, Defendants further requested
and obtained (for Defendants' own business use and purposes) the private information of the
third parties' contracted Texas customers without those customers' knowledge or consent.
11.35 The EXPERIAN and LOWERMYBILLS Defendants. along with Defendants
See Exhibit A, page 9, Section 2.5.d..
Plaintiff s First Amended Petition Page 18 of 24
State v. LowerMyBills and Experian, et at
HEYMANN, KRENZER, and VINER have caused confusion and misunderstanding as to
LOWERMYBILLS' and EXPERIAN's affiliation, connection, association with CAG for the
provision of debt relief services through their advertising and use of the EXPERIAN and
LOWERMYBILLS trademarks and logos.
11.36 By engaging in the acts and practices described above, the EXPERIAN and
LOWERMYBILLS Defendants, along with Defendants HEYMANN, KRENZER and VINER
have caused confusion and misunderstanding as to CAG's certification to lawfully provide debt
relief services under the laws of the State of Texas, where CAG operates and where Defendants
deliver the consumer information sold to CAG.
11.37 By engaging in the acts and practices described above, the EXPERIAN and
LOWERMYBILLS Defendants, along with Defendants HEYMANN, KRENZER, and VINER
have caused confusion and misunderstanding as to CAG's certification to legally provide debt
relief services under the laws of the States where the consumers whose information Defendants
sold and delivered to CAG reside.
11.38 As a result of Defendants' acts and practices as described herein consumers signed
fraudulent and void contracts with Defendants' "approved CAG) partner" and entrusted their
limited financial resources to CAG in order to settle their debts and repair and improve their
credit scores with EXPERIAN. Instead, CAG's President (Shane Garner) failed to place
customers' funds in trust accounts, co-mingled and used customer funds for personal benefit and
millions of dollars of consumers' personal savings disappeared, some faced lawsuits from
creditors and their credit scores fell further leaving them in a far worse position than before'9.
12. VIOLATIONS OF TEXAS' CONSUMER DEBT MANAGEMENT SERVICES ACT
12.1 As outlined Sections 1. through 11 above, Defendants, in the course and conduct
19 See, generally, Exhibit A and consumer complaints.
Plaintiffs First Amended Petition Page 19 of 24
State v. LowerMyBills and Experian. et at..
of trade and commerce, have engaged in conduct in direct violation of the Texas Consumer Debt
Management Services Act, Texas Finance Code Chapter 394 including, but not limited to:
a. Providing debt management services in Texas without first securing the
legally required registration from the Texas Consumer Credit Commissioner in
violation of TEX. FIN. CODE ANN. § 394.204(a);
b. Acting in reliance on void contractual authorizations from clients and
misrepresenting the validity of such void debt management services contracts to
clients by failing to disclose to customers that the contracts were void due to CAG
and Defendants' failures to obtain a registration to provide consumer debt
management services in Texas in violation of TEX. FIN. CODE ANN. §
394.2 15(a); and
c. Engaging in unfair, deceptive, and unconscionable acts or practices in
connection with a service provided to a consumer in violation of TEX. FIN.
CODE ANN. § 394.2 12(a)(9).
13. VIOLATIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT
13.1 The facts and allegations in Sections 1. through 12. of this First Amended
Petition are incorporated herein by reference. As outlined Sections 1. through 12. Defendants
have engaged in unlawful false, misleading and/or deceptive acts and practices in violation of
§17.46 (a) & (b) of the DTPA including but not limited to:
a. Causing confusion or misunderstanding as to the source, sponsorship, approval,
or certification of goods or services in violation of DTPA §17.46 (b)(2);
b. Causing confusion or misunderstanding as to affiliation, connection, or
association with, or certification by, another in violation of DTPA § 17.46 (b)(3);
c. Representing that goods or services have sponsorship, approval, characteristics,
uses, benefits, or quantities which they do not have or that a person has a sponsorship,
approval, status, affiliation or connection it does not in violation of DTPA §17.46 (b)(5);
d. Representing that goods or services are of a particular standard, quality, or grade,
or that goods are of a particular style or model if they are of another in violation of DTPA
§ 17.46 (b)(7):
e. Failing to disclose information concerning goods or services which was known at
the time of the transaction if such failure to disclose such information was intended to
induce the consumer into a transaction into which the consumer would not have entered
had the information been disclosed; and
Plaintiffs First Amended Petition Page 20 of 24
State v. LowerMyBills and Experian, et al.
f. Engaging in false, misleading and/or deceptive acts or practices in the business of
trade or commerce in violation of Section 17.46(a).
14. REQUEST FOR INJUNCTIVE RELIEF UNDER THE DTPA
14.1 DEFENDANTS have engaged in the unlawful deceptive acts and practices herein
described, and the State has reason to believe that it is in the public interest to enjoin the use of
such practices by Defendants.2° Upon hearing and final trial of these issues against
DEFENDANTS, pursuant to § 17.47 of the DTPA, Plaintiff requests a temporary and permanent
injunction to restrain and enjoin DEFENDANTS from engaging in such unlawful acts or
a. Enjoining Defendants from selling consumers' information to any third
party without the Consumer's express written consent to sell the Consumer's
information to the third party;
b. Enjoining Defendants from "matching" consumers' with one of the
Defendants' "debt relief partners" unless and until the Defendant personally and
independently verifies with law enforcement authorities in the State where the
consumer resides, that the particular "debt relief partner" is authorized by law to
provide "debt relief' services in the state where the consumer resides;
c. Enjoining Defendants from "matching" a consumer with one of
Defendants' "debt relief partners" without first disclosing to the consumer if the
particular debt relief partner has any judgments against it, in the preceding ten
years, for violating of any financial services related statute or regulation;
d. Enjoining Defendants from obtaining, or seeking to obtain, any
consumer's written authorization to sell the consumer's personal information to a
20 When the State seeks injunctive relief pursuant to an authorized statute (e.g. DTPA §17.47(a)1, the Texas
Supreme Court has held that the State does not have to prove immediate and irreparable injury. Nor does the Court
have to balance equities when the State litigates in the public's interest. When a statute is being violated, it is within
the province and duty of the trial court to restrain it. State v. Texas Pet Foods. 591 SW2d 800 (Tex. 1979). The State
has a relaxed burden because it acts in the public interest. When the State brings an action in the public interest and
on behalf of consumers, harm is presumed. United States v. Odessa Union Warehouse, 833 F2d 172 (9th Cir. 1987),
Shafer v. United States, 229 F2d 124 (4tI Cir) Cert. Den. 351 US 931(1956). The statute's express language
supercedes the common law injunctive relief elements such as imminent harm or irreparable injury and lack of an
adequate remedy at law ... (The State) need only demonstrate to the court its reason to believe that (1) any person is
engaging in, has engaged in, or is about to engage in any act or practice declared to be unlawful by the DTPA, and
(2) that the proceedings would be in the public interest. West v. State, 212 SW3d 513 (Tex.App.- Austin, 2006, no
pet.). The state is likewise not required to prove the likelihood of future violations nor is required to show probable
injury. Ibid at515. Injunctive relief may be granted to the State upon a showing of only a violation of a statute. Gulf
Holding Corp. v. Brazoria County, 497 S.W.2d 614 at 619 (Tex. Civ. App.- -Houston (l4tj 1973, writ ref'd n.r.e.).
Plaintiffs First Amended Petition Page 21 of 24
State v. LowerMyBills and Experian, et a!..
third party "debt relief partner" unless and until that Defendant first "matches" the
consumer with that particular third party in accordance with "b." and "c." above;
e. Enjoining Defendants from seeking, or obtaining, from any of its third
party "debt relief partners" information pertaining to whether or not any
particular consumer whose information was sold to the third party "partner" by
one of the Defendants became a contracted customer of the third party "partner";
f. Enjoining Defendants from tracking or gathering a consumer's use of the
internet (other than the Defendant's own website) without first obtaining the
consumer's express written consent;
g. Enjoining Defendants from sending any unsolicited emails, or other
solicitations, to a consumer, based on the consumer's use of Defendants' websites,
without first obtaining the consumer's written consent;
h. Enjoining Defendants from selling a consumer's personal information to
any third party without first confirming the third party does not have any
judgments against it for violating any financial services statutes or regulations;
i. Enjoining Defendants from selling any consumer's personal information
to any third party without first confirming the third party has never been involved
in identity theft;
j. Further temporarily restraining and/or enjoining Defendants as
warranted by the facts found by the Court upon hearing; and
k. Upon completion of trial, further permanently enjoining Defendants as
15. WRIT TO ISSUE WITHOUT BOND
15.1. The State requests that the Clerk of the Court issue such Writs of Injunction
andlor Writs of Restraint pursuant to any Injunction issued by this Court in conformity with the
law, and that same be issued and be effective without execution and filing of a bond as Plaintiff,
State of Texas, is exempt of such bonds per TEX. BUS. AND COM. CODE ANN. § 17.46(b).
16. JURY DEMAND
16.1 Plaintiff respectfully demands trial by jury.
Wherefore premises considered Plaintiff, the State of Texas, respectfully requests the
Plaintiffs First Amended Petition Page 22 of 24
State v. LowerMyBills and Experian. ci aL.
17.1 That each Defendant be cited according to law to appear and answer herein;
17.2 This Court find each Defendant has violated the laws of the State of Texas as
alleged in this Petition;
17.3 After due notice and hearing, a Temporary Injunction be issued; and upon final
hearing a Permanent Injunction be issued, restraining and enjoining each Defendant (including
any business entities established by Defendants), and each officer, agent, servant, employee,
attorney and any other person acting in concert or participation with any Defendant, who
receives actual notice of the order as specified in Section 14. of this Plaintiffs First Amended
17.4. Upon final trial, additional judgment be granted against Defendants, jointly and
a. civil penalties of up to $20,000.00, per violation, to the State of Texas for each
violation of the DTPA by the Defendants;
b. civil penalties to the State of Texas in an amount up to $250,000.00 per Defendant
as allowed by law under the DTPA, due to Defendants committing acts and practices calculated
to acquire or deprive money or other property from consumers who were 65 years of age or older
when the act or practice occurred;
c. Defendants to pay restitution and damages to identifiable consumers and other
persons, including restoration of money, property, diminished personal credit ratings (including
with Experian Credit Services), litigation costs resulting from creditors' lawsuits, and other
harms provided by law;
d. Defendants to pay Pre-judgment and Post-judgment interest on all awards of
restitution, damages or civil penalties, as provided by law; and
Plaintiffs First Amended Petition Page 23 of 24
State v. LowerMvBills and Experian, et a!,
e. Defendants to pay all costs of Court, costs of investigation, and reasonable
attorneys' fees pursuant to TEX.GOVT.CODE ANN. § 402.006(c); and
17.5. Such other relief to which Plaintiff may be justly entitled.
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