Experian Helped a Dallas Company Wreck People's Credit Scores, Texas Says

Shane Garner's alleged scam was simple: Set up a reputable-sounding company, i.e. the Credit Alliance Group. Flood the Internet with promises that he can help hard-working Americans escape from crushing debt. Convince the people who respond that they need to pay the company up front so it can negotiate down their debt. Use their money instead to buy a new BMW and a $1.2 million home on the fringe of Highland Park.

For five years, the scheme worked well, as Credit Alliance Group never seemed to run out of people desperate and/or gullible enough to give it cash. Inevitably, though, the consumer complaints and lawsuits began piling up, high enough to pique the interest of CBS 11's i-Team and the Texas Attorney General's Office. By the time a Dallas judge handed down a $34 million judgment against CAG earlier this year, both Garner and CAG had filed for bankruptcy.

There's nothing particularly remarkable about the existence of a bottom-feeding debt scammer. Garner's kind have always been around to prey on the financially vulnerable, and they always will be. What's troubling about Garner's case, according to the attorney general's office, is that many of his customers were funneled to him by Experian, i.e. one of the three immensely powerful companies that calculates Americans' credit scores.

The state of Texas last week filed a lawsuit in Dallas accusing Experian of violating consumer protection laws by selling customer data to CAG, which it endorsed as an "approved debt relief partner" in spite of the partner's record of screwing over customers.

The main conduit for this was LowerMyBills.com, a website Experian owned from 2005 to 2012. Visitors to the site would be prompted to enter various personal information as they clicked through in hopes of finding information on debt relief. At the end of the process, they would land on a page directing them to one of LowerMyBills.com's approved partners, like CAG.

In 2010, regulators in Maine raised questions about the seemingly cozy relationship between LowerMyBills.com and CAG and the fact that neither was licensed to offer debt management services in the state. Steven Heymann, a vice president with the Experian company that operates LowerMyBills.com, distanced his company from CAG, saying the website is merely a "lead generator" that bears no responsibility for what happens after it sells customer data to its partners.

"LowerMyBills.com's business relationship with Credit Alliance Group ends upon the transmission of the lead to the client," Heymann wrote. "LowerMyBills.com receives no other compensation from Credit Alliance Group other than a flat fee for the generation of the lead."

Texas doesn't buy it. They paint the relationship between LowerMyBills.com and CAG as much cozier than it is portrayed. The state says the website flew a representative to Dallas to "wine and dine" Garner at "upscale Dallas nightclubs" to cultivate a partnership, and they argue the site failure to inform customers of CAG's misdeeds, even after the company was banished from multiple states.

As a result, Texas says, scores of customers entrusted their savings to CAG under the impression that the company was legit. Rather than having their debts wiped away, as promised, they increased, as did the calls from debt collectors. Experian, meanwhile, kept taking their fee. The same company that was calculating customers' credit scores was simultaneously helping wreck them.

Send your story tips to the author, Eric Nicholson.

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