FTC temporarily halts unlawful credit repair operation

Federal Issues FTC FTC Act TSR CROA UDAP Enforcement Deceptive

On May 6, the FTC announced that the U.S. District Court for the Middle District of Florida granted a temporary restraining order against a credit repair operation for allegedly engaging in deceptive practices. According to the FTC’s complaint, the operation violated the FTC Act, the CROA, and the TSR by, among other things; (i) making misrepresentations regarding credit repair services; (ii) making misrepresentations regarding a money-making opportunity associated with a government benefit related to Covid-19; (iii) making untrue or misleading representations to consumers, which included increasing their credit score; (vi) charging for the performance of credit repair services that the defendants agreed to perform prior to such services being fully performed; (v) making untrue or misleading statements with respect to their sales pitch on credit worthiness, credit standing, or credit capacity to consumer reporting agencies, creditors, and potential creditors; and (vi) charging illegal advance fees. Beyond the temporary restraining order, the FTC is seeking a permanent injunction, the appointment of a receiver, immediate access to business premises, an asset freeze, and other equitable relief.