Court Grants Injunction Against Credit Repair Organization Providing Allegedly Fraudulent Services to Consumers | Troutman pepper

On March 18, the District Court for the Southern District of Texas issued an injunction against a credit repair organization, Turbo Solutions, Inc. d/b/a Alex Miller Credit Repair, and its owner Alex Miller for alleged violations of the FTC, Credit Repair Organizations Act (CROA) and the FTC’s Telemarketing Sales Rule (TSR). The complaint against Turbo Solutions and Miller alleged multiple violations, including making false promises about the company’s ability to improve consumers’ credit scores and unlawfully charging consumers upfront fees for these services.

On March 1, the U.S. Department of Justice, acting on behalf of the FTC, filed a lawsuit against Turbo Solutions and Miller, alleging the company operated a deceptive credit repair system by claiming to help repair consumer credit. , but failing to keep its promises. Specifically, the complaint alleged that the company’s advertisements and telemarketing practices misrepresented its ability to remove inaccurate and negative accounts from consumer credit reports, provide credit improvement results in 40 days and increase consumer credit scores by 50 to 200 points in violation of CROA and TSR. The complaint also alleged that the company filed or caused to be filed false reports of identity theft through the FTC’s website. Finally, the complaint alleged that the company routinely collected deposits of $1,500 in violation of the TSR’s prohibition on collecting payment for credit repair services before the services were completed, and that the company did not failed to provide required information to consumers regarding its services and cancellation policies. .

In its order granting a permanent injunction, the district court found that the United States had demonstrated, and the defendants had not contested, that it had engaged in the alleged deceptive conduct. The permanent court injunction prohibits Turbo Solutions and Alex Miller from charging advanced fees, making certain promises and representations regarding their ability to improve consumer credit, filing identity theft reports on behalf of third parties and not to provide the information required in the context of credit repair. services.

This case follows other enforcement actions taken by the FTC and CFPB against credit repair organizations that allegedly made misrepresentations regarding credit repair services. Previous articles covering some of these measures can be found here and here. Troutman Pepper will continue to monitor and report on these enforcement actions and other important issues related to the credit repair industry.