Banking and Finance Law Daily FTC announces settlement in bogus credit repair scheme case
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Tuesday, January 21, 2020

FTC announces settlement in bogus credit repair scheme case

By Nicole D. Prysby, J.D.

Under the terms of an FTC settlement, the operators of a bogus credit repair scheme will be banned from the credit repair business and required to pay monetary judgments.

On Jan. 17, 2020, the FTC announced settlements with the operators of a credit repair scheme, Grand Teton Professionals, LLC, including monetary judgments and a permanent ban from operating or promoting any credit repair service. The participants in the scheme allegedly targeted consumers with false promises of substantially improving consumers’ credit scores by claiming to remove all negative items and "hard" credit inquiries from consumers’ credit reports. They are also alleged to have illegally charged up front fees for their services and threatened consumers with lawsuits when they complained or disputed charges. In addition to the ban on operating a credit repair service, the operators of the scheme are prohibited from misleading consumers about financial services like credit offerings or debt relief and from further violations of the FTC’s regulations and rules. They will be required to create and maintain records demonstrating compliance with the settlement for 10 years.

Grand Teton Professionals and other defendants were charged with violating the FTC Act and several provisions of the Credit Repair Organizations Act, Telemarketing Sales Rule, Consumer Review Fairness Act, Truth in Lending Act, and Electronic Funds Transfer Act. The defendants allegedly targeted consumers with false promises of substantially improving consumers’ credit scores by claiming to remove all negative items and "hard" credit inquiries (which can often change a consumer’s credit score) from consumers’ credit reports. In addition, the FTC alleged the defendants illegally charged upfront fees for their services and advised consumers to mislead credit bureaus and lenders, as well as threatening consumers with lawsuits when they complained or disputed charges.

The settlement with defendants Douglas Filter, Marcio G. Andrade, Grand Teton Professionals, LLC, 99th Floor, LLC, Mait Management Inc., Demand Dynamics LLC, Atomium Corps Inc., and First Incorporation Services Inc. includes a monetary judgment of $9,641,982, which is partially suspended due to an inability to pay. The defendants will be required to give the FTC the contents of a number of bank, investment, merchant, and cryptocurrency accounts.

The settlement with defendant Atomium Corps Inc. (a Colorado company) includes a monetary judgment of $3,256,850, which is partially suspended due to an inability to pay. The defendant will be required to give the FTC the contents of several bank and merchant accounts.

The settlement with defendant Startup Masters NJ Inc. (a New Jersey company) includes a monetary judgment of $929,054, which is suspended due to an inability to pay.

All defendants are enjoined from misleading consumers about financial services like credit offerings or debt relief and from further violations of the FTC’s regulations and rules. For example, they are prohibited from advertising an offer of credit without stating the amount or percentage of the down payment and the annual percentage rate, and may not make electronic funds transfers from a customer’s account without obtaining written authorization. In addition, each defendant must create and retain records for 10 years, showing the revenue from all products sold, personnel records, records of consumer complaints, copies of all advertising and marketing materials, and records necessary to demonstrate compliance with the terms of the settlement.

Companies: 99th Floor, LLC; Atomium Corps Inc.; Demand Dynamics LLC; First Incorporation Services Inc.; Grand Teton Professionals, LLC; Mait Management Inc.; Startup Masters NJ Inc.

MainStory: TopStory ConsumerCredit ChecksElectronicTransfers EnforcementActions TruthInLending

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