Alleged Credit Repair Scammers Settle FTC Charges

Last year, as part of its “Operation Clean Sweep,” the Federal Trade Commission filed charges against a number of entities in an effort to crack down on credit repair scams. In one case, it charged Advantage Credit Repair LLC and Mark D. Solomon, based in Chicago, with falsely promising to remove negative information from consumers’ credit reports, even if it was accurate and current, in violation of the FTC Act and the Credit Repair Organizations Act. The defendants also allegedly violated federal law by requiring payment before any service was provided to consumers. According to the FTC’s complaint, the defendants’ advertising stated, “We would never charge a large fee up front, or make you wait a long period of time to refund your money if we do not get results. You WILL see results in 60 days, or your money will be refunded in full. . . .” They charged $495 per person and $665 for a couple and required $219 or $269, respectively, in advance.

Today, the defendants agreed to settle the action. The settlement order bars the defendants from further violations and from misrepresenting:
·                     They can improve consumers’ credit reports by permanently removing negative information, even when it’s accurate and current;
·                     They can otherwise improve a consumer’s credit report or ability to obtain credit;
·                     The full cost of their services and any restrictions on consumers’ use of those services;
·                     Their refund or cancellation policy; or
·                     The benefits of using their goods or services.
 
The order imposes a $226,793.90 judgment that will be suspended once they pay $20,000. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. The order prohibits the defendants from collecting any payments from consumers who purchased their services before October 23, 2008, when the court halted their business practices and froze their assets. The order further bars them from disclosing or benefitting from customer information, and failing to properly dispose of customer information.