‘Deceptive’ Credit-Debt Repair Service Settles FTC Charges

Credit repairThe Federal Trade Commission has settled with a promoter of credit repair and debt relief services for $2.5 million over charges of deceiving customers with false promises of cleaning up their credit and drastically reducing their debt.
The FTC complaint alleged that Sam Tarad Sky, and his companies – Credit Restoration Brokers and Debt Negotiations Associates – illegally charged consumers $2,199 before performing any service, and failed to tell customers they could cancel their contract within three business days.
“He also falsely told consumers who bought debt relief services that they could satisfy their debt by paying much less than the full amount owed, such as 30 cents on the dollar,” the FTC said.
The settlement order imposed a judgment of $2.5 million against Sky, and $100,000 against Sky’s attorney, Kurt A. Streyffeler, and Streyffeler’s law firm, Kurt A. Streyffeler, P.A. The documents were filed in the U.S. District Court for the Middle District of Florida, Fort Myers Division.
The settlement order bars Sky and his companies “from deceiving consumers about any credit repair or financial good or service.” It also requires them to back up any debt relief claims they make; inform consumers that they have a right to cancel; and explain to former clients how to have their escrowed funds returned.
The FTC claimed that Sky falsely told consumers he could improve their credit reports by removing negative information such as judgments, foreclosures, tax liens and bankruptcies from the reports — regardless of the accuracy of the information.
The FTC’s complaint also alleged that he and his lawyer falsely told consumer reporting agencies that their clients were identity theft victims when disputing negative items.

One thought on “‘Deceptive’ Credit-Debt Repair Service Settles FTC Charges

  • March 22, 2010 at 8:52 am

    Here is the part I don’t get – how did this guy get an average of $2,100 out of people who are desperate? The reason they have bad credit (in most cases) is that they don’t pay their bills, because they don’t have any money (due to job loss,medical, divorce, etc). It blows my mind how this happens.

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