The Federal Trade Commission (FTC) and an Arizona federal district court have temporarily halted a credit repair operation that allegedly impersonated legitimate debt collection companies and creditors and collected nearly $200 million in illegal fees from consumers.
According to the court complaint, Credit Glory and 16 related entities allegedly made false and misleading claims about their credit repair services, impersonated debt collection companies and creditors, collected illegal upfront fees, and engaged in unlawful subscription enrollment practices dating back to at least 2016.
The FTC alleges that the defendants used paid Google search advertisements to target consumers seeking assistance with their credit, including military service members. The advertisements allegedly made false promises that the companies could improve consumers’ credit scores.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in an FTC news release that the agency would continue taking action against credit repair operations that charge consumers upfront fees while failing to provide the promised results.
Allegations Against the Credit Repair Companies
The FTC alleges that the defendants used targeted search advertisements to reach military service members who owed debts to lenders and organizations such as USAA and the Army & Air Force Exchange Service. The advertisements allegedly claimed that the defendants could improve consumers’ credit scores by challenging those debts.
According to the complaint, the defendants allegedly violated several federal laws, including the Federal Trade Commission Act, the Credit Repair Organizations Act, the Telemarketing Sales Rule, the Gramm-Leach-Bliley Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Fund Transfer Act.
The alleged violations involved false promises regarding credit repair services, deceptive impersonation of legitimate debt collection companies and creditors, illegal upfront fees, and unlawful enrollment practices.
The FTC also alleges that consumers who responded to the defendants’ telemarketing efforts were misled into believing they were communicating with legitimate creditors or debt collectors. The defendants allegedly promised that their credit repair services would significantly increase consumers’ credit scores.
Instead, according to the complaint, the defendants disputed valid debts and, in some cases, submitted fraudulent identity theft reports through Identitytheft.gov without the consumers’ knowledge. The FTC alleges that these actions did not result in improvements to consumers’ credit scores.
Halting The Operation
The court’s temporary action halts the alleged operation while the case proceeds.
The FTC’s allegations remain subject to the ongoing legal proceedings.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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