Consumer Credit: USA's FTC takes comtempt action against "credit repair" company
The USA's Federal Trade Commission has issued proceedings against Sam Tarad Sky, Allrepco LLC, Credit Restoration Brokers LLC (CRB), and Debt Negotiations Associates LLC (DNA) alleging that they have breached the terms of a court order banning them from " deceptively marketing any good or service and from breaching the Credit Repair Organisations Act."
In 2010, an order was made against the parties named above following FTC action in the civil courts. In that action, the FTC alleged that the defendants "deceptively marketed credit repair and debt relief services, and illegally charged an up-front fee for credit repair services."
But, the FTC now says, the order did not stop them and "the defendants tried to take advantage of financially strapped consumers by falsely telling them that almost anyone can qualify for food stamps and by encouraging them to mislead the government about their finances to qualify for the food stamp scheme."
Their method was to sell a "guide" for either a one-time fee of USD99, or as part of "Financial Solution Package" that cost consumers a monthly recurring fee of up to USD139.
According to the FTC, under long-standing government restrictions, only low-income households can qualify for the federal food stamp scheme. In the guide, however, the defendants repeatedly tell consumers to provide the government with misleading information in order to inflate their chances of being deemed eligible – advising them, for example, to have high-income residents briefly move out of their household. The FTC says in its court documents that following this advice could leave consumers open to civil or criminal charges by the government.
Moreover, the FTC says that the defendants marketed the food stamp application guide throughout the United States without telling consumers that the guide contained information about the application process in only one state – Florida.
The civil contempt action was filed in the U.S. District Court for the Middle District of Florida, Fort Myers Division on 12 April, 2011.
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