The Federal Trade Commission followed through last week on its promise to derail fraudulent credit repair companies.

On Thursday the FTC and 10 state attorneys general announced Operation Payback, an initiative that involves consumer education and tighter enforcement.

To jump-start their effort, federal and state officials leveled fraud charges against 12 credit repair companies, the majority of which allegedly violated the FTC's new telemarketing sales rule.

The rule, which went into effect at the end of last year, implements part of the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994.

"Our goal," said FTC spokeswoman Victoria Streitfeld, "is to get people to stop responding to credit repair companies that prey on gullible consumers who pay up-front."

The name Operation Payback was chosen to show that law enforcers are turning the tables on credit repair companies, which are "getting what they deserve" now, said Ms. Streitfeld.

The FTC says consumers lose millions of dollars to credit repair companies each year.

The new telemarketing rule bars such a company from asking for payment until six months after it starts working with a customer.

According to the FTC, credit repair companies typically say they can remove even accurate negative information from consumers' credit reports, including bankruptcies, late payments, and loan defaults.

The Newspaper Association of America also pledged its support to Operation Payback, asking its more than 1,500 members to run warnings in their classified advertising sections, where credit repair companies typically advertise.

A handful of daily newspapers already alert readers that they can solve their credit problems on their own, and that the telemarketing sales rule prohibits credit repair companies from requesting a fee before six months.

The FTC sweep last week brought charges against Jayco Associates Inc. of Washington, D.C., which does business as the Credit Doctor.

Credit Doctor agreed to pay $15,000 in refunds to customers it allegedly victimized. It also agreed to withdraw negative reports it had sent to credit reporting agencies about customers who did not pay its $995 fee.

"When FTC attorneys come in, you sign their papers," said Jerry J. Jewell, the company's corporate officer. "It's just like Waco - you can't fight them. But we are still in business."

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