The Federal Trade Commission cracked down last week on seven companies that allegedly offer to help consumers remove negative information from their credit reports.
The actions, part of an ongoing program known as Operation Clean Sweep, were accompanied by numerous state filings. The FTC is seeking consumer redress and a halt to the alleged practices.
The defendants promised that derogatory information could be removed even when accurate, according to the FTC. Most advertised on Web sites, or in direct response advertising in other media.
“Companies that promise they are able to scrub your credit reports of accurate, negative information for a fee are lying—plain and simple,” said Lydia Parnes, director of the FTC’s Bureau of Consumer Protection, in a statement. “Under federal law, accurate, negative information can be reported for up to seven years and some bankruptcies for up to 10 years.”
The defendants include:
*Nationwide Credit Services Inc. and James R. Dooley—This firm claims in Yellow Pages ads and online that bankruptcies, slow payment history, repossessions and other negative information “CAN BE LEGALLY ERASED,” according to the FTC. Victims have paid up to $1,000, including monthly fees that were often debited from their bank accounts, the FTC alleged. Many received little or nothing for their money, the FTC continued.
*Clean Credit Report Services Inc., Ricardo A. Miranda, Daniel T. Miranda and Ruthy Villabona—This company charged an advance fee of $400 for nonexistent services, often debiting it from bank accounts before receiving a signed contract charged. the FTC alleged. The firm advertises on radio, television and on its Web site. One TV ad offers a testimonial from an Atlanta woman, stating: “When I lost my job and simply didn’t may my credit cards and when I needed to get my car loan they said I needed at least a 600 credit score but I had a 480. I got into the CCRS club and did what they dole me to do…When I pulled my report online I realized that I had a 621.”
*Successful Credit Service Corp., d/b/a Success Credit Services), and Tracy Ballard—This firm offers its services mostly by appearing at real estate investment seminars, on third-party Web sites and on its own Web sites, according to the FTC. (The sites are now apparently inactive). The firm claims to have special relationships “with every creditor, collection company, public records provider and credit bureaus,” the FTC alleged. The commission continued that the firm charges advance fees of up to $4,000.
*Advantage Credit Repair LLC and Mark D. Solomon—This outfit ran Yellow Pages and ads on its Web site, charging that it 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.” However, victims were charged up to $269 in advance, and that was less than half of the fee, according to the FTC’s numbers. Refund requests were usually denied, the commission charged.
*RCA Credit Services LLC, Rick Lee Crosby Jr. and Brady Wellington—Ads for this combine said: “Boost Your Credit Score into the 700s’ in as little as 30 days,” the FTC charged. Victims were charged up to $3,000, with partial payment required in advance, the FTC alleged.
*Latrese & Kevin Enterprises Inc. (also doing business as Hargrave & Associates Financial Solutions), Latresse Hargrave and Kevin Hargrave Sr.—These defendants ran radio ads promising that “slow pays, charge-offs, repossessions can be erased for $250,” according to the FTC. They also offered advance-fee credit cards, putting them in violation of the FTC’s Telemarketing Sales Rule, the commission alleged.
*ACE Group Inc/ (also doing business as American Credit Experts Inc., The Ace Group Inc., the Ace Group and ACE; Legal Credit Repair Center Ins. (also doing business as LCRC), Michael Singer, Melvin Kessler and Gerald Roth. This group’s ads promised that “everything surrounding your bankruptcy will be removed from your credit report,” and that late payments are “easy to remove,” the FTC charged.
