By James Limbach
ConsumerAffairs.Com

September 2, 2010
A credit repair operation has reached a settlement with the Federal Trade Commission (FTC) and has agreed to stop making false claims and stop charging up-front fees.

The settlement is part of a continuing crackdown on scams that target financially strapped consumers -- in this case taking hundreds of dollars in fees to purportedly remove negative information from consumers' credit reports even if the information is accurate and timely.

The FTC filed the action in Operation Clean Sweep in October 2008.

The settlement agreement requires that Clean Credit Report Services, Inc., Ricardo A. Miranda, Ruthy Villabona, and their son, Daniel R. Miranda give up two cars, three houses, and six commercial properties in Broward and Miami-Dade counties in Florida, and in Bogota, Colombia.

Broken promises

According to the agency, they told consumers they would help remove all the negative remarks from their credit reports, as well as current debt. Clean Credit often debited $400 from consumers' bank accounts before receiving a signed contract, and then did little, if anything, to fulfill its promises.

Nicole of Deerfield Beach, FL, says she was scammed by Clean Credit Report Services. "We paid $760.00 in January 2006. The company sent us a package filled with dispute letters for us to sign and mail to all three credit bureaus," she writes ConsumerAffairs.com.

"When I called them to find out the update on my account they said they were sending out more dispute letters, that was never done," she says. "Now when we call the company all they tell us is our accounts are being reviewed -- and that's if you get good phone reception or someone who speaks English. When I demanded my money back because they did not commit to the service they offered -- to clean our credit, and continue to monitor our credit reports to verify these negative items don't appear again -- they refused without explanation."

Up-front money ban

The settlement order bars Clean Credit and its owners from making misrepresentations about any good or service, such as the ability to improve a consumer's creditworthiness or remove negative information from a consumer's credit report. The order also prohibits the operation from charging money up-front for credit repair services, and from collecting payments from consumers who purchased its services before October 22, 2008, when the court froze the defendants' assets, including their bank accounts. It further bars the defendants from disclosing, benefiting from, or failing to properly dispose of customer information.

In addition, the settlement order imposes a $14.4 million judgment that will be suspended, contingent upon the defendants surrendering their assets, including frozen funds totaling about $165,000 and any proceeds received from selling their six commercial and three residential properties under foreclosure in Florida; commercial property in Bogota, Colombia; a 1992 Mercedes S300; and a 1997 Chevrolet Venture.

The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.