Banking and Finance Law Daily FTC blocks alleged phony rental, credit report scheme
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Monday, October 30, 2017

FTC blocks alleged phony rental, credit report scheme

By Richard A. Roth, J.D.

Two individuals have agreed to permanent injunctions and monetary judgments to settle Federal Trade Commission charges that they used fictitious property advertisements to lure consumers into enrolling in credit monitoring services without their knowledge. The FTC charged that the two men violated the FTC Act ban on deceptive acts or practices, although the men did not admit any violations when they agreed to the order (FTC v. Credit Bureau Center, LLC, Oct. 26, 2017, Kennelly, M.).

According to the FTC, Danny Pierce and Andrew Lloyd placed ads on Craigslist for properties they did not have authority to rent or that did not even exist and then offered interested consumers property tours if the consumers first secured free credit reports and credit scores from websites with which the men were affiliated. However, the consumers actually were enrolled in credit monitoring services that charged $29 per month.

Money judgments. Under the agreement, a $6.8 million joint and several judgment for equitable relief has been entered against the two men. However, based on representations about their financial circumstances, Pierce will be required to pay only $117,000 and Lloyd will be required to pay only $645,000, with the remaining amount to be suspended.

If any of the funds paid cannot be used for consumer redress, they will be turned over to the Treasury Department as disgorgement.

Injunction terms. The agreed-upon injunction prohibits both men from future misrepresentations. It imposes on them an obligation to supervise the activities of any business affiliates and to end relationships with any affiliates that engage in misrepresentations. The injunction also prohibits them from benefitting from any consumer information they learned before the injunction was entered.

However, neither of the men is banned from future participation in property rental or credit monitoring businesses.

The case is No. 17-cv-194.

Attorneys: Guy G. Ward and Samuel A.A. Levine, Federal Trade Commission. Richard B. Newman (Hinch Newman LLP) and Andrew B. Gordon (Gordon Law Group) for Danny Pierce and Andrew Lloyd.

Companies: Credit Bureau Center, LLC; CreditUpdates.com; eFreeScore.com; FreeCreditNation.com; MyScore LLC

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