Credit Repair Scammers Settle FTC Charges

A credit repair company that falsely claimed it would help boost consumers’ credit ratings will settle Federal Trade Commission charges filed last year as part of “Operation Clean Sweep,” a federal-state crackdown on credit repair scams.

The FTC charged the Chicago-based defendants 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. They 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.

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.

The defendants are Advantage Credit Repair LLC and Mark D. Solomon. The Commission vote to authorize staff to file the stipulated final order was 4-0. The proposed order was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division.

The Commission appreciates the assistance of the Better Business Bureau of Chicago & Northern Illinois in this case.

The FTC offers consumer information, “Credit Repair: How to Help Yourself,” at http://ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm, and advises that only time, a conscious effort, and a personal debt repayment plan can improve a credit report. The first step is to learn what information is in the credit report. If there are errors or mistakes, federal law provides the right to have them corrected – free of charge. Federal law requires that the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – provide consumers with a free copy of their credit report once every 12 months, if requested. To order your free report, consumers can visit annualcreditreport.com, call 1-877-322-8228, or complete and mail the Annual Credit Report Request Form.

NOTE: Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the force of law when signed by the judge.

The Federal Trade Commission works for the consumer 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, click http://www.ftccomplaintassistant.gov or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.