Defendant in Credit Repair Case Agrees To Settle FTC's Charges

Brian W. Cutright has agreed to settle charges the Federal Trade Commission brought against him in connection with his role in the now-defunct National Credit Foundation, Inc. ("National"), a credit repair business based in Phoenix.

The FTC alleged in a complaint filed in federal court last October that National had misrepresented its ability to improve consumers' credit histories by permanently removing bankruptcies, late payments, and other delinquencies from consumers' credit reports. The complaint also alleged that National had misrepresented to consumers its purpose in obtaining their checking account information and then debited their checking accounts without authorization, and that National had misrepresented in a paid commercial that it used to advertise its services that the advertisement was an independent program. The defendants named in the complaint were Robert J. Maynard, Jr. (a stockholder and officer of National), Cutright (an officer of National), Mark F. Guimond (director of customer services for National), NCF Corp. (producer of National's infomercial) and Hal Z. Lederman (owner of NCF Corp.). NCF Corp., Lederman and Guimond have previously settled the FTC’s charges. The complaint seeks a permanent injunction and an order for consumer redress from the remaining defendant, Robert J. Maynard.

According to the FTC, Cutright had responsibility for National’s telemarketers and the claims they made about National’s ability to repair consumers’ credit accounts and the company's purpose in soliciting consumers’ checking account numbers. The proposed settlement to the charges against Cutright would permanently prohibit him from misrepresenting the ability of any credit improvement service to substantially improve a consumer’s credit report or to remove adverse information contained in a consumer’s credit report, and from misrepresenting any right or remedy under the Fair Credit Reporting Act. In addition, Cutright would be required to provide each prospective purchaser of credit improvement services with a notice advising consumers of their rights and a credit bureau’s reporting rights under the Fair Credit Reporting Act. The order also would prohibit Cutright from misrepresenting the purpose of obtaining bank or credit card information and from failing to obtain written authorization before submitting a draft on any consumer’s bank account.

Finally, the proposed settlement with Cutright also contains a number of recordkeeping and reporting requirements to assist the FTC in monitoring the defendant’s compliance.

The Commission vote to file the proposed settlement was 5-0. It was filed in the U.S. District Court for the District of Arizona, in Phoenix, on Feb. 14. The settlement is subject to approval by the court. The FTC's Los Angeles Regional Office handled this matter.

NOTE: The stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendant of a law violation. The judgment has the force of law when signed by the judge.

Copies of the proposed settlement, as well as other documents associated with this case, are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(Civil Action No.: 96-2374-PHX-ROS)
(FTC File No. X970005)