A credit repair operation has agreed to stop making false claims and stop charging upfront fees under a settlement with the Federal Trade Commission.

According to the FTC’s complaint, James R. Dooley and his company, Nationwide Credit Services Inc., falsely claimed that bankruptcies, judgments, slow pay history, repossessions and collection accounts could be “legally erased” from consumers’ credit reports.

The defendants allegedly charged up to $150 in advance and debited a monthly fee from some consumers’ bank accounts. The defendants rarely, if ever, delivered the promised results, and in many instances took consumers’ money without providing any services.

Consumers often found their cancellation requests ignored, and their refund requests were almost always denied, the FTC complaint alleged.

The settlement order bars the defendants from making misrepresentations about any good or service, such as the ability to improve a consumer’s creditworthiness or remove negative information from their reports.

It also prohibits them from charging money up-front for credit repair services, and from collecting payments from consumers who purchased their services before October 20, 2008, when the court froze the defendants’ assets. The order further bars the defendants from disclosing or benefitting from customer information, and from failing to properly dispose of customer information.

The settlement order imposes a judgment of more than $1.3 million that will be suspended once the defendants have surrendered funds frozen by the court. The full judgment will become due immediately if they are found to have misrepresented their financial condition.

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