The Justice Department recently obtained an injunction against a Texas-based “credit repair” company for falsely claiming that the company would remove negative information from its consumers’ credit reports. The DOJ, acting on notice and authorization from the FTC, prohibited the company from filing false identity theft reports to explain negative items on consumers’ credit reports.
The Commission alleges in a complaint filed by the US Department of Justice on its behalf that the company operated a deceptive credit repair program, in violation of Section 5 of the FTC Act, the credit repair organizations and the Telemarketing and Consumer Fraud and Abuse Prevention Act. . The complaint alleges that the company claimed to help repair consumers’ credit through a “two-step process.” The Commission says this “process” often fails to deliver what it promises, harming customers. The complaint also accuses the company of falsely claiming that it can remove negative information from consumers’ history through “advanced dispute” of negative items on a consumer’s credit report and adding “credit enhancement products” to improve credit scores, which can help consumers obtain loans. and other loans at lower rates. The government is seeking both civil penalties and reparations for consumers.
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