FTC Halts Alleged Credit Repair Scam - OppLoans

FTC Halts Alleged Credit Repair Scam - OppLoans FTC Halts Alleged Credit Repair ScamInside Subprime: July 1, 2019By Jessica EastoA federal court, at the request of the Federal Trade Commission (FTC), has temporarily stopped the activity and frozen the assets of an alleged credit repair scheme.According to an FTC press release, the Wyoming-based company in question, “charged illegal upfront fees and falsely claimed to repair consumers’ credit.” The FTC has charged the company, along with other defendants, with violating several regulations, including the FTC Act and several provisions of the Credit Repair Organizations Act, the Telemarketing Sales Rule, the Consumer Review Fairness Act, the Truth in Lending Act, and the Electronic Funds Transfer Act.The FTC’s complaint alleges that two defendants, who appear to be owners or managers involved with the company and whose names appear on official bank accounts, operated an illegal credit repair scam that has swindled at least $6.2 billion from customers since 2014.“A good cre dit score can help you buy a home, get a business loan, or finance an education,” said Director of the FTC’s Bureau of Consumer Protection Andrew Smith. “These companies preyed on consumers who wanted to clean up their credit by making false promises and taking illegal upfront fees.”According to the FTC, the defendants, who operated under multiple business names, used deceptive practices to target customers, and promised to improve their credit score by removing all hard inquiries and negative entries from their credit report. They also promised to add “tradelines” or “piggybacking” credit to customer’s accounts, which could theoretically improve their credit score. In the majority of cases, the defendants did not “substantially improve” their customers’ credit scores.The defendants allegedly charged their customers unlawful upfront fees, did not provide them with legally-required disclosures about their services, and advised them to make false identity theft claims and mislead lenders.The FTC claim also alleges that the defendants would threaten legal action against customers who complained that their credit score had not improved or who challenged the illegal advance fees, citing that it went against specific contract clauses.Additionally, the defendants allegedly accessed customers’ bank accounts to get funds to pay the fees without permission and did not provide proper disclosures for fee financing options.Learn more about payday loans, scams, and cash advances by checking out our city and state financial guides, including Florida, Illinois, Chicago, Ohio, Texas, and more.Visit  OppLoans  on  YouTube  |  Facebook  |  Twitter  |  LinkedIn