Ftc Takes Aim At Credit Repair Scams Watchdog Agency Files Complaints Against 20 Companies

Twenty companies falsely claimed they can repair a consumer’s bad credit rating for a fee, the government alleged Thursday in complaints filed in federal courts nationwide.

The Federal Trade Commission contended that all 20 companies violated the law by making deceptive claims about improving customers’ credit ratings by removing derogatory information from credit files.

The agency asked the courts for an injunction to bar allegedly false advertising claims made by the companies, partially through unsolicited e-mail.

In 12 cases, the FTC said in a statement, the courts issued temporary restraining orders and froze all or part of the companies’ assets.

“Ultimately, in all cases, the FTC is seeking permanent injunctions prohibiting the alleged deceptive practices” as well as financial compensation to customers, the agency said.

Eleven similar cases are being pressed in state courts, the FTC said.

“Credit repair organizations that promise to clean up consumers’ credit reports by removing accurate, up-to-date credit information are breaking federal law,” said Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection. “This fraud is particularly appalling because it preys on consumers who already find themselves in financial difficulty as a result of layoffs, divorce, or heavy medical expenses.”

While there are legitimate credit counseling services, she said, “The FTC has never seen a legitimate credit ‘repair’ company.”

No one can erase negative credit information if it is accurate and current, the agency said. Any inaccurate information can be corrected at little or no cost to consumers, it said.

The 12 companies subjected to temporary restraining orders and frozen assets are, in alphabetical order by state:

Dixie W. Cooley doing business as DWC, Scottsdale, Ariz.

Pathfinder Research Co. of Los Alamitos, Calif.

Midwest Management Associates Inc., of Chicago.

Second Federal Credit Inc., Credit Repair Network, New England Financial, and Phillips Hall Inc., doing business as Allied Credit Services, all four of Massachusetts.

National Credit Management Group of Fort Lee, N.J.

Fighting Back Inc. of New York City.

Compass Northeast Credit Service of Columbia, S.C.

Quaite & Associates - The Credit Solver, Dallas.

Credit Services, Dallas and Conroe, Texas.

The other eight companies targeted by the federal government are:

Keith Gill and his law offices, Woodland Hills, Calif.

Law offices of Jack Schrold of Fort Lauderdale, Fla.

Credit Corporation of America of New Orleans, La.

Equity Funding & Associates, Inc. of Bloomfield, Mich.

Nationwide Credit Information Services of Freehold, N.J.

Credit Report Counselors of Cincinnati.

AAA Credit Services of Columbia, S.C.

Cornerstone Wealth Corporation of Dallas.