A federal court has eight companies from selling credit repair and mortgage relief services and ordered them to pay more than $7.5 million for deceiving consumers.
The Federal Trade Commission charged seven companies with making false promises that they would improve consumers’ credit scores by removing negative information such as late payments, chargeoffs, collection information, delinquencies, judgments, and accounts discharged in bankruptcy. The companies charged consumers up to $2,000, including illegally charging an advance payment of $300, and failed to provide written contracts and other materials required by law.
Another company was later added to the case for falsely claiming they would help consumers get mortgage loan modifications or stop foreclosure in virtually all instances.
The credit repair companies are: United Credit Adjusters Inc. (also known as: United Credit Adjustors and UCA; United Counseling Association Inc. (also known as: UCA); Bankruptcy Masters Corp.; National Bankruptcy Services Corp.; Federal Debt Solutions Ltd.; and United Money Tree Inc. The loan modification companies are The Loan Modification Shop Ltd., Casey Lynn Cohen (also known as Casey Lynn Collins), and Rishty.
The federal court entered default judgments against the companies after they failed to respond to the lawsuit. The court order bars the companies from trying to collect payment from their customers and from selling or otherwise disclosing their customers’ personal or financial information. The order imposes a $7,500,334 judgment against the credit repair companies and a $32,710 judgment against the loan modification defendants.
Other details of the order include prohibiting the credit repair companies from selling credit repair services, and banning the loan modification companies from selling mortgage loan modification and foreclosure relief services. The order further prohibits the companies from misleading consumers about financial goods and services, such as loan terms or rates, how much a consumer will save by enrolling in a debt relief service and credit terms other than those a lender actually offers. Finally, the order bars the companies from misleading consumers about any good or service – such as refund terms, government affiliation and total cost.