Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC charges settled in bogus credit repair scheme, (Aug 4, 2015)
Organizations Mentioned:FTC Credit Solutions | First Time Credit Solution, Corp.
By Michael Menzhuber, J.D., LL.M.
Four individuals have settled FTC charges that they operated a bogus credit repair scheme that allegedly tricked Spanish-speaking consumers into paying thousands of dollars each to supposedly improve their credit, the FTC has announced. The settlement orders ban them from offering credit repair services and subjects them to monetary penalties (FTC v. First Time Credit Solution Corp., Civil Action No. CV15-01921-DDP (PJW)).
According to the FTC complaint, filed in March of 2015, Guillermo Leyes, Jimena Perez, Fermin Campos and Maria Bernal, along with corporate defendant, First Time Credit Solution Corp., doing business as FTC Credit Solutions, violated the FTC Act by: (1) claiming to be affiliated with or licensed by the Federal Trade Commission; (2) falsely promising they could remove negative information from consumers’ credit reports; and (3) guaranteeing consumers a credit score of 700 or above within six months or less. The FTC also alleged that 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 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 settlements further provide that the defendants will be: (1) required to surrender the money in their bank accounts; (2) permanently barred from selling or advertising credit repair services to consumers and from deceiving consumers about any good or service they are selling; and (3) barred from selling or otherwise benefitting from customers’ personal information.
The proposed stipulated final orders were filed by the FTC in the federal 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.
Companies: First Time Credit Solution, Corp.
News: ConsumerProtection FederalTradeCommissionNews