A credit repair company that allegedly made false claims it could raise consumers’ credit ratings and illegally charged advance fees will settle with the Federal Trade Commission, the federal agency said today.
The FTC had charged Chicago-based Advantage Credit Repair and Mark D. Solomon with violating federal law by “falsely promising to remove negative information from consumers’ credit reports, even if it was accurate and current.” The charges were part of a federal-state crackdown on credit repair scams.
The company charged $495 per person and $665 per couple, but required $219 or $269, respectively, in advance. Even though the service advertised that it would never charge fees up front, Advantage did just that, the FTC said.
A federal judge imposed a $226,793.90 judgment against the company. It will be suspended once Advantage pays $20,000.
“The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition,” the FTC said.
The order also prohibits the company from collecting any payments from consumers who purchased their services before October 23, 2008, when a judge ordered their business to seize operations and froze its assets. Advantage is prohibited from disclosing or benefiting from customer information, and failing to properly dispose of the customer information.
The FTC said the settlement order prohibits Advantage Credit Repair from misrepresenting:
- They can improve consumers’ credit reports by permanently removing negative information, even when it’s accurate and current;
- They can otherwise improve a consumer’s credit report or ability to obtain credit;
- The full cost of their services and any restrictions on consumers’ use of those services;
- Their refund or cancellation policy; or
- The benefits of using their goods or services.
The FTC offers consumers the following guide: “Credit Repair: How to Help Yourself.”