FTC, DOJ Halt Credit Repair Operation Over Deceptive Practices

On March 18, the U.S. District Court for the Southern District of Texas issued an injunction against a Texas-based credit repair company that allegedly made false promises to remove negative information from credit reports and filed false identity theft reports to explain negative items on credit reports. The court granted an injunction against the company, finding violations of Section 5 of the FTC Act, the Credit Repair Organizations Act, and the Telemarketing and Consumer Fraud and Abuse Prevention Act. The permanent injunction imposes financial restrictions on the defendants and halts their operations.

The complaint was filed by the DOJ at the request of the FTC against the company and its owner. The credit repair operation claimed it could remove damaging information from consumer credit histories by disputing negative items and by adding "credit building products" to boost credit scores. The company promised results in 40 days, including false claims