Blog Enforcement Watch March 21, 2022

FTC Stops Alleged Credit Repair Scheme that Filed False Identify Theft Complaints

On March 21, 2022, the Federal Trade Commission (FTC) announced that it had obtained an injunct​​ion halting a Texas-based credit repair operation.  The company allegedly obtained millions of dollars from consumers by falsely claiming to consumers the company could remove negative information from credit reports.  The company would then allegedly file fake identify theft reports to remove negative items on consumers credit reports.

The FTC alleged that before providing any services, the company illegally required consumers to pay a $1,500 up-front fee.  The company then filed false identity theft reports, typically without the consumers’ knowledge, claiming that the negative items on the credit reports were the result of identity theft.  The FTC alleged that this practice violated the Credit Repair Organizations Act (CROA) and the Telemarketing Sales Rule (TSR).

The FTC also alleged that the company violated the CROA by failing to properly disclose cancelation policies to consumers and by failing to give consumers a copy of the contracts they must sign to engage the company’s services.

The post FTC Stops Alleged Credit Repair Scheme that Filed False Identify Theft Complaints appeared first on Consumer Finance Enforcement Watch.