The Federal Trade Commission has charged the operators of a credit-repair company with making false statements to credit bureaus about information in consumers’ credit reports and illegally collecting fees from consumers before performing services.
RMCN (Repair My Credit Now) Credit Services Inc. and the married couple who own it, Doug and Julie Parker, advertised a six-month program to improve consumers’ credit reports, according to the FTC's complaint. The FTC alleges the defendants made false statements to credit bureaus disputing the accuracy of negative information in consumers’ credit reports.
In letters to credit bureaus, which McKinney, Texas-based RMCN did not show to consumers, the firm typically disputed all negative information in credit reports, regardless of the information’s accuracy. RMCN continued to send these deceptive dispute letters to credit bureaus, even after receiving detailed billing histories verifying the accuracy of the information, or it signed contracts from creditors proving the validity of the accounts, according to the FTC’s complaint.
The complaint alleges that RMCN misrepresented to consumers that federal law allows the company to dispute accurate credit report information and that credit bureaus must remove information from credit reports unless they can prove it is accurate. In the company’s words, credit bureaus must “prove it or remove it,” according to the complaint.
RMCN charged a retainer fee of up to $2,000 before providing any service, and the FTC says it falsely told consumers that Texas law allows registered and bonded credit repair organizations to charge an advance fee.
The FTC charged the defendants with violating the Credit Repair Organizations Act by making untrue or misleading statements to credit bureaus about consumers’ credit worthiness and by charging fees for credit-repair services before they were fully performed.
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