Collection Agency Charged Illegal Fee for Credit Repair Product

The Federal Trade Commission will refund more than $11,000 to consumers who allegedly were charged an illegal advance fee by a collection agency for a CD-ROM that was supposed to include information about credit reporting and instructions for how to repair credit.

Collection agency Luebke Baker and Associates and owner Kevin Luebke marketed "Credit Solutions" CD. Collecting an upfront fee before providing any goods or services is a violation of the FTC's Telemarketing Sales Rule.

The settlement required the defendants to pay for refunds to all consumers who paid the advance fee. The FTC will mail 831 checks for $13.70 each.

The defendants settled with the FTC in May for allegedly trying to collect magazine subscription debts they knew or should have known were not valid, used false caller ID posing as Ed McMahon, and claimed to be attorneys or that they were calling from a law firm.

That settlement imposed monetary judgments totaling $3.1 million for violations of the Fair Debt Collection Practices Act, FTC Act and Telemarketing Sales Rule.