Operators of Bogus Credit Repair Scheme Settle FTC Charges

The operators of a bogus credit repair scheme that allegedly tricked Spanish-speaking consumers into paying thousands of dollars each to supposedly improve their credit will be banned from offering credit repair services and subject to a monetary judgment under settlements with the Federal Trade Commission.

According to a federal court complaint filed by the Commission in March 2015, the defendants did business using the name FTC Credit Solutions, misleading consumers not only about the nature of the alleged credit repair services they offered, but also claiming an affiliation with the Commission that did not exist.

“These defendants were shameless. They scammed consumers who were in need of financial help and used the good name of the Federal Trade Commission to do so,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “I’m pleased these defendants will be kept away from this business for good.”

The FTC alleged that the defendants – First Time Credit Solution, Corp., Guillermo Leyes, Jimena Perez, Fermin Campos and Maria Bernal – violated the FTC Act by claiming to be affiliated with or licensed by the Federal Trade Commission, falsely promising they could remove negative information from consumers’ credit reports, and guaranteeing consumers a credit score of 700 or above within six months or less. The FTC also alleged the defendants violated the Credit Repair Organizations Act by making these misrepresentations and charging consumers up front for credit repair services.

Under the terms of two settlements, the four individual defendants will be subject to a monetary judgment of $2.4 million. Leyes will be responsible for the full amount of the judgment. In the cases of Perez, Campos and Bernal, the judgment will be partially suspended due to their inability to pay. The defendants will be required to surrender the money in their bank accounts. The settlements permanently bar the defendants from selling or advertising credit repair services to consumers and from deceiving consumers about any good or service they are selling. The settlements also bar the defendants from selling or otherwise benefitting from customers’ personal information.

The Commission vote approving the proposed stipulated final orders was 5-0. The FTC filed the proposed stipulated final orders in the U.S. District Court for the Central District of California, Western Division. The court entered the orders on July 30 and August 3. The court also entered an order against the corporate defendant, First Time Credit Solution, Corp., on July 30 for the same injunctive relief and monetary judgment as the individual defendants.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.