FTC Sues Credit Repair Companies Over Allegedly Deceptive Marketing Practices


FTCOn June 21, 2019, the Federal Trade Commission (FTC) announced that it had filed a lawsuit against affiliated companies offering services to repair consumers’ damaged credit.  The FTC’s Complaint, filed in the U.S. District Court for the District of Connecticut, alleged that the companies used deceptive marketing campaigns that promised to eliminate derogatory credit from consumers’ credit reports and raise consumers’ credit scores, yet the companies failed to deliver those results. Specifically, the FTC alleged that the companies violated Section 5 of the Federal Trade Commission Act, the Credit Repair Organizations Act, the Truth in Lending Act, and the Telemarketing Sales Rule (“TSR”), and the Electronic Fund Transfer Act, by promoting their credit repair services through unsolicited emails and text messages, failing to accurately disclose the provided services, and accepting fees in advance for their services. 

The FTC seeks a permanent injunction, restitution, and disgorgement.  The court granted a temporary restraining order, halting the companies’ operations and freezing their assets.