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AP
Operation Targets Credit Repair Schemes
Thursday February 2, 1:25 pm ET
By Jennifer C. Kerr, Associated Press Writer
Joint Federal-State Operation Targets Credit Repair Schemes
WASHINGTON (AP) -- Bad Credit B Gone is one of 20 companies accused by
government regulators of making promises to remove negative information from
consumers' credit reports -- promises they can't keep.
"The fact is, they can't deliver on their claims. No one can legally remove
accurate and timely information from your credit record," Eileen Harrington,
deputy director of the Federal Trade Commission's Bureau of Consumer
Protection, said Thursday.
Harrington announced a joint federal-state sweep against companies accused
of running sham credit repair operations. The crackdown, dubbed "Project
Credit Despair," also involved the U.S. Postal Inspection Service and state
law enforcement agencies in Louisiana, Tennessee, Ohio, California,
Arkansas, Illinois, Kentucky and Florida.
Ten of the cases were from Louisiana. Susan Jandle, a state review examiner
with the Office of Financial Institutions, said many consumers in Louisiana
are behind on mortgages, car payments and other loans in the aftermath of
Hurricane Katrina.
The credit repair companies "see our consumers as a target group," she said.
In the case of Bad Credit B Gone, the FTC said the Philadelphia-based
company promised would-be clients "the credit you always dreamed of!" It
charged $500 per person and $700 per couple -- and half of the money was due
upfront, Harrington said.
Bad Credit B Gone has been charged with violating the FTC Act by making
false or misleading statements. The company's assets have been frozen and
the commission is trying to require Bad Credit B Gone to refund consumers'
money.
A phone number for the company was not in service, and company officials
could not immediately be reached for comment.
Harrington did not have figures on how many people may have been duped in
the case.
Credit repair fraud affects some 2 million people every year in the United
States, costing about $600 million annually, according to FTC estimates.
The FTC's Harrington said the commission has never come across a legitimate
credit repair company. Her advice to consumers: avoid them.
Federal Trade Commission: http://www.ftc.gov