Attorney General's News Release

December 13, 2007

Nixon obtains judgment closing fraudulent “credit repair” service until it complies with Missouri law; $122,000 in restitution and penalties ordered

Springfield, Mo. — Attorney General Jay Nixon today obtained a default judgment including a permanent injunction against a Springfield man who sold “credit repair” services to consumers, who received no improvement in their credit reports as promised nor refunds of their payments. Nixon’s judgment against Success Systems and its owner Timothy Holthaus, entered today by Greene County Circuit Judge Dan Conklin, also requires to defendants to pay $65,416 in restitution to 44 consumers and $57,000 in civil penalties.

“The defendants were engaged in the habit of preying upon consumers whose credit was bad and were willing to pay hundreds of dollars for what they thought was a quick fix,” Nixon said. “Negative information on your credit report can only be removed the old fashioned way, which is the gradual building up of good credit. These defendants told consumers otherwise, selling services that did not help at all.”

Holthaus is the owner of Success Systems, a company he claimed provided credit repair services. Nixon had alleged that Holthaus also previously operated another company, Dreamlife, that also provided credit repair services. The defendant allegedly advertised Dreamlife on the Internet, claiming that for a membership fee of $495 consumers would receive credit repair services.

Consumer complaints to the Attorney General’s Office stated that they saw no improvements in their credit reports after paying the membership fee, nor were they able to cancel their membership and receive their money back as guaranteed. Consumers also complained that they were unable to contact Dreamlife or Holthaus by phone or email.

Based on the consumer complaints, Nixon sued the defendants and obtained a temporary restraining order against them in Sept. 2006. Nixon later amended his petition as further investigation revealed additional unlawful practices committed by the defendants. The defendants failed to answer any petition filed by Nixon, placing them in default.

According to today’s default judgment, Holthaus and Success Systems must pay $65,416 to 44 consumers, ranging from $200 up to as high as $22,449. The defendants must also pay $57,000 in penalties. In addition, the defendants are also ordered to:

• Cease conducting business in the areas of credit repair, residential mortgage lending and brokering, loan originating and funding until they comply with Missouri law;
• Notify all consumers who purchased a membership, credit repair services, loan brokering services, mortgage brokering services or legal advice from the defendants between Jan. 2003 and Oct. 6, 2006 that the business is no longer allowed to provide such services and to contact an attorney;
• Provide the list of all consumers to the Attorney General’s Office, with an affidavit proving that the consumers in question had been notified;
• Release all funds held in escrow to be paid for restitution; and
• Employ a professional document destruction company to destroy all credit reports and copies of credit reports in the defendants’ possession and provide proof of such to the Attorney General’s Office.

The judgment also stipulates that any future violation of the permanent injunction and default judgment would result in civil penalties of up to $5,000 for every violation.

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Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to the Press Secretary.

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