WASHINGTON (dpa-AFX) - The Federal Trade Commission has banned operators of a bogus credit repair scheme from the credit repair business.
The firms, which defrauded consumers millions of dollars, are subject to a number of other requirements under settlement they reached with FTC.
The settlements relate to a complaint that FTC filed in June 2019 against multiple credit repair companies in the U.S. District Court for the District of Connecticut.
The complaint alleged that the companies targeted consumers with false promises of substantially improving consumers' credit scores by claiming to remove all negative items and 'hard' credit inquiries, which can often change a consumer's credit score from their credit reports.
In addition, the FTC alleged the defendants illegally charged upfront fees for their services and advised consumers to mislead credit bureaus and lenders, as well as threatening consumers with lawsuits when they complained or disputed charges.
The court temporarily shut down the companies linked to the credit repair scheme.
The settlement with defendants Startup Masters NJ; Grand Teton Professionals, LLC; 99th Floor, LLC; Mait Management Inc.; Demand Dynamics LLC; Atomium Corps Inc. (a Wyoming company); and First Incorporation Services Inc. (a Wyoming company) includes a monetary judgment of $9,641,982, which is partially suspended due to their inability to pay. The defendants will be required to give the FTC the contents of a number of bank, investment, merchant, and cryptocurrency accounts.
FTC said in a press release that if it is found that any of the defendants in the settlements misled the commission about their financial condition, they will be required to pay the full amount of the judgments.
The Commission voted unanimously approving the stipulated final orders. The FTC filed the proposed orders in the Connecticut court.
'These companies promised to clean up people's credit, but failed to deliver,' said Andrew Smith, Director of the FTC's Bureau of Consumer Protection. 'If anyone says they can remove accurate and current information from your credit report, that's probably a credit repair scam.'
Under the terms of the settlements, the bogus firms are permanently banned from operating or promoting any credit repair service. They also are prohibited from misleading consumers about financial services like credit offerings or debt relief and from further violations of the FTC's regulations and rules, including the Telemarketing Sales Rule.
The settlements also prohibit the defendants from using threats, intimidation, confessions of judgment, and other unfair practices to prevent consumers from exercising their rights to dispute charges.
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