Office of the Attorney General News Release Archive


Friday, February 16, 2001

CORNYN OBTAINS $1.8 MILLION JUDGMENT AGAINST DEBT COLLECTORS

Houston, Dallas Operations Had Targets Nationwide

AUSTIN - Texas Attorney General John Cornyn today obtained a final injunctive order, including a $1.8 million dollar judgment, against four Houston- and Dallas-area debt collection agencies. The Attorney General filed suit on Jan. 3, obtaining an initial asset freeze as part of a temporary restraining order against these debt collection operations that solicited business in several states.

The defendants named in the order are Rudolph Stearnes III, William Ficka III and Kyle Holder with their respective companies - Campbell, Campbell, Drexler & Gates; Thomas, Thomas, Alexis & Lynn; and Ashton, Ashton, O'Riley & Schwartz.

These agencies acted as third-party debt collectors and solicited collection accounts nationwide through the use of unsolicited faxed advertisements. The companies collected monies from debtors and repeatedly failed to turn most of these monies over to their creditor-clients, as required in the clients' contracts. The defendants also threatened debtors over the phone, violating various state laws.

The companies were charged with violations of the Deceptive Trade Practices and Consumer Protection Act and the Debt Collection Act, a state law requiring third-party debt collectors to be bonded with the state of Texas.

The order obtained today requires the defendants to file a bond with the Texas Secretary of State in order to conduct any debt collection business. Furthermore, any such business must be in strict compliance with state laws.

The defendants are required by the order to deposit all debt collection funds in an escrow account, to be held there until monies are paid to creditor-clients. The final order provides the state of Texas with a $1.8 million dollar judgment, which includes $60,000 in fines and penalties, $250,000 in attorney fee reimbursements to the state, and $1.5 million dollars in restitution.

The state's case was handled by Assistant Attorneys General Suzanne Bradley and John Owens of the Houston Consumer Protection Office.

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Contact: Mark Heckmann, Tom Kelley or Jane Dees at (512) 463-2050.
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