A promoter of credit repair and debt relief services agreed to settle Federal Trade Commission charges that he deceived consumers into paying thousands of dollars based on false promises that he could help fix their credit and debt problems. The $2.5 million settlement will be suspended because of the defendant's inability to pay.
The FTC's complaint charged that Sam Tarad Sky of Estero, Fla. falsely told consumers he could improve their credit reports by removing negative information such as judgments, foreclosures, tax liens, bankruptcies, repossessions and child support delinquencies, from the reports regardless of the age or accuracy of the information.
The complaint also alleged that Sky and his lawyer, Kurt A. Streyffeler, falsely told consumer reporting agencies - as a reason to dispute negative items - that consumers were identity theft victims.
Sky and his companies, Credit Restoration Brokers LLC and Debt Negotiations Associates LLC, both based in Florida, illegally charged consumers up to $2,199 before performing any services and failed to tell customers that they could cancel the contract within three business days.
He also falsely told consumers who bought debt relief services that they could satisfy their debt by paying much less than the full amount owed, such as 30 cents on the dollar.
The settlement order against Sky and his companies bars them from deceiving consumers about any credit repair or financial service. It also requires them to support any debt relief claim they make, inform consumers they have a right to cancel and tell past clients how to have their escrowed funds returned.
Separately, Streyffeler agreed to a $100,000 settlement with the FTC. That judgment also was suspended because of his inability to pay. The full judgments, including Sky's $2.5 million settlement, will become due immediately if the defendants are found to have misrepresented their financial condition.
Sky and Streyffeler could not be reached for comment this morning.