Case 2:26-cv-05387-SPL

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FILED

- - RECE.N'ED

GREGORY A. ASHE (VA Bar No. 39131)

BENJAMIN R. CADY (NY Bar No. 5133582)

Federal Trade Commission

600 Pennsylvania Avenue NW

Washington, DC 20850

Telephone: 202-326-3719 (Ashe)

Telephone: 202-326-2939 (Cady)

Email: gashe@ftc.gov, bcady@ftc.gov

Federal Trade Commission,

Credit Glory LLC, a Delaware limited

liability company;

Credit Glory LLC, a Wyoming limited

liability company;

Credit Glory LLC, a Nevada limited

liability company;

Credit Glory Inc., a Delaware corporation;

Credit Sage LLC, a Delaware limited

liability company;

CLERK U S DISTRICT COURT

P!STRJ CT OF AR.lZONA

DEPUTy

' 13'( ___ -.,..,._,__

Case No. I CV26-05387-PHX-SPL

Plaintiff,

AU G O 3 2026

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

---=- COPY

Attorneys for Plaintiff

FEDERAL TRADE COMMISSION

~ LODGED

Joy Credit Software LLC, a Delaware

limited liability company;

Clerk Credit Systems LLC, a Delaware

limited liability company;

Clerk Credit Software LLC, a Delaware

limited liability company;

COMPLAINT FOR PERMANENT

INJUNCTION, MONETARY

JUDGMENT, AND OTHER RELIEF

DOCUMENT SUBMITTED UNDER

SEAL

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Standard Scores LLC, a Delaware limited

liability company;

Collection Payments LLC, a Delaware

limited liability company;

Collections Dispute LLC, a Delaware

limited liability company;

Collections Expert LLC, a Delaware

limited liability company;

Collections Support LLC, a Delaware

limited liability company;

Credit Cop LLC, a Delaware limited

liability company;

Dispute Collection LLC, a Delaware

limited liability company;

Glorious Credit LLC, a Delaware limited

liability company;

Joyful Credit LLC, a Delaware limited

liability company;

Alexander N. Brola, in his individual and

corporate capacity;

Liam Pavel Tame Te Amorangi Tira

Emery, in his individual and corporate

capacity;

Marko Petkovic, in his individual and

corporate capacity;

Joshua Curtis, in his individual and

corporate capacity; and

David Naylor, in his individual and

corporate capacity;

Defendants.

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Plaintiff, the Federal Trade Commission ("FTC"), for its Complaint alleges:

1. The FTC brings this action for Defendants' violations of Section 5(a) of the FTC Act,

15 U.S.C. § 45(a), the Credit Repair Organizations Act ("CROA"), 15 U.S.C. §§

1679-1679/, the FTC's Telemarketing Sales Rule ("TSR"), 16 C.F.R. Part 310,

Section 521 of the Gramm-Leach-Bliley Act ("GLB Act"), 15 U.S.C. § 6821, Section

4 of the Restore Online Shoppers' Confidence Act ("ROSCA"), 15 U.S.C. § 8403,

Section 907(a) of the Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. § 1693e(a),

and Section 1005 .1 0(b) of its implementing Regulation E, 12 C.F .R. § 1005 .1 0(b ).

Defendants' violations relate to their deceptive marketing and sale of credit repair

services. For these violations, the FTC seeks relief, including temporary, preliminary,

and permanent injunctions, monetary relief, and other relief, including an asset freeze,

appointment of a receiver, and immediate access to Defendants' premises, pursuant to

Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, Section 410(b) of

CROA, 15 U.S.C. § l 679h(b), Section 6(b) of the Telemarketing and Consumer Fraud

and Abuse Prevention Act ("Telemarketing Act"), 15 U.S.C. § 6105(b), Section

522(a) of the GLB Act, 15 U.S.C. § 6822(a), Section 5(a) of ROSCA, 15 U.S.C. §

8404(a), and Section 918(c) ofEFTA, 15 U.S.C. § 1693o(c).

SUMMARY OF THE CASE

24 2. Defendants operate an unlawful credit repair scheme that has deceived thousands of

consumers across the country. Defendants pose as legitimate debt collection agencies

and creditors, including those that operate for the benefit of veterans, members of the

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military, and their spouses, and claim they will improve consumers' credit scores by

removing negative items from their credit reports. Defendants even file false identity

theft reports on the FTC's Identitytheft.gov website without consumers' knowledge in

attempts to remove negative information. Defendants also routinely charge prohibited

advance fees, including recurring fees on a negative option basis, from consumers for

their credit repair services. And, in some instances, Defendants go so far as to bill

consumers without their knowledge or consent. Defendants' promises to help

consumers improve their credit scores are false and, as a result of their unlawful

practices, they have caused at least $172.5 million in consumer injury.

3. Through this action, the FTC seeks to put an end to Defendants' scheme and secure

redress for the consumers whom Defendants have harmed.

JURISDICTION AND VENUE

4. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), and

1345.

5. Venue is proper in this District under 28 U.S.C. §§ 139l(b)(2), (b)(3), (c)(l), (c)(2),

(c)(3), and (d), and 15 U.S.C. § 53(b).

PLAINTIFF

6. The FTC is an agency of the United States Government created by the FTC Act,

which authorizes the FTC to commence this district court civil action by its own

attorneys. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC Act, 15

U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting

commerce. The FTC also enforces CROA, 15 U.S.C. §§ 1679-1679/, which prohibits

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untrue or misleading representations to induce the purchase of credit repair services,

requires certain affirmative disclosures in the offering or sale of credit repair services,

and prohibits credit repair service organizations from charging or receiving money or

other valuable consideration for the performance of credit repair services before such

services are fully performed. The FTC also enforces the Telemarketing Act, 15

U.S.C. §§ 6101-6108. Pursuant to the Telemarketing Act, the FTC promulgated and

enforces the TSR, 16 C.F .R. Pat1 310, which prohibits deceptive and abusive

telemarketing acts or practices in or affecting commerce. The FTC also enforces

Section 521(a) of the GLB Act, 15 U.S.C. § 6821(a), which prohibits obtaining a

person's financial information by making false, fictitious, or fraudulent statements or

representations. The FTC also enforces ROSCA, 15 U.S.C. §§ 8401-8405, which

prohibits the sale of goods or services on the Internet through negative option

marketing without meeting ce11ain requirements to protect consumers. The FTC also

enforces EFTA, 15 U.S.C. §§ 1693-1693r, and its implementing Regulation E, 12

C.F.R. Part 1005, which regulate the rights, liabilities, and responsibilities of

participants in electronic fund transfer systems.

DEFENDANTS

22 7. Defendant Credit Glory LLC, also doing business as Credit Glory, is a Delaware

limited liability company. Credit Glory LLC uses or has used business addresses at

1887 Whitney Mesa Drive, Suite 2089, Henderson, Nevada; 1032 E. Brandon

Boulevard, Suite 1089, Brandon, Florida; and 8 The Green, Suite B, Dover, Delaware.

Credit Glory LLC transacts or has transacted business in this district and throughout

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the United States. At all times relevant to this Complaint, acting alone or in concert

with others, Credit Glory LLC has advertised, marketed, distributed, or sold credit

repair services to consumers throughout the United States.

8. Defendant Credit Glory LLC, also doing business as Credit Glory, is also separately

a Wyoming limited liability company and is also registered to do business in

California. Credit Glory LLC uses or has used business addresses at 1887 Whitney

Mesa Drive, Suite 2089, Henderson, Nevada; 1032 E. Brandon Boulevard, Suite

1089, Brandon, Florida; 30 N. Gould Street, Suite N, Sheridan, Wyoming; and 2108

N Street, Suite N, Sacramento, California. Credit Glory LLC transacts or has

transacted business in this district and throughout the United States. At all times

relevant to this Complaint, acting alone or in concert with others, Credit Glory LLC

has adve1iised, marketed, distributed, or sold credit repair services to consumers

throughout the United States.

17 9. Defendant Credit Glory LLC, also doing business as Credit Glory, is also separately

a Nevada limited liability company. Credit Glory LLC uses or has used business

addresses at 1887 Whitney Mesa Drive, Suite 2089, Henderson, Nevada; 1032 E.

Brandon Boulevard, Suite 1089, Brandon, Florida; and 732 S. 6th Street, Suite N, Las

Vegas, Nevada. Credit Glory LLC transacts or has transacted business in this district

and throughout the United States. At all times relevant to this Complaint, acting alone

or in concert with others, Credit Glory LLC has advertised, marketed, distributed, or

sold credit repair services to consumers throughout the United States.

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10. Defendant Credit Glory Inc., also doing business as Credit Glory, is a Delaware

corporation that was initially incorporated in New York but converted to a Delaware

corporation and is also registered to do business in Florida, Nevada, and California.

Credit Glory Inc. uses or has used business addresses at 1887 Whitney Mesa Drive,

Suite 2089, Henderson, Nevada; 1032 E. Brandon Boulevard, Suite 1089, Brandon,

Florida; 234 5th Avenue, Suite 200, New York, New York; 1201 N. Orange Street,

Suite 600, Wilmington, Delaware; 7901 4 th Street N., Suite 300, St. Petersburg,

Florida; 2108 N Street, Suite N, Sacramento, California; 8 The Green, Suite B, Dover,

Delaware; and 732 S. 6th Street, Suite N, Las Vegas, Nevada. Credit Glory Inc.

transacts or has transacted business in this district and throughout the United States.

At all times relevant to this Complaint, acting alone or in concert with others, Credit

Glory Inc. has advertised, marketed, distributed, or sold credit repair services to

consumers throughout the United States.

11. Defendant Credit Sage LLC, also doing business as Credit Sage, is a Delaware

limited liability company and is also registered to do business in Washington. Credit

Sage LLC uses or has used business addresses at 2093 Philadelphia Pike, Suite 5702,

Claymont, Delaware; 1032 E. Brandon Boulevard, Suite 1089, Brandon, Florida;

1913 E. Desert Lane, Phoenix, Arizona; 822 N.E. 115th Circle, Vancouver,

Washington; 522 W. Riverside Avenue, Suite N, Spokane, Washington; and 8 The

Green, Suite B, Dover, Delaware. Credit Sage LLC transacts or has transacted

business in this district and throughout the United States. At all times relevant to this

Complaint, acting alone or in concert with others, Credit Sage LLC has advertised,

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marketed, distributed, or sold credit repair services to consumers throughout the

United States.

12. Defendant Joy Credit Software LLC, also doing business as Credit Joy, is a

Delaware limited liability company. Joy Credit Software LLC uses or has used

business addresses at 800 N. King Street, Suite 304-1384, Wilmington, Delaware; 509

Welwyn Road, Richmond, Virginia; and 16192 Coastal Highway, Lewes, Delaware.

Joy Credit Software LLC transacts or has transacted business in this district and

throughout the United States. At all times relevant to this Complaint, acting alone or

in concert with others, Joy Credit Software LLC has advertised, marketed, distributed,

or sold credit repair services to consumers throughout the United States.

13. Defendant Clerk Credit Systems LLC, also doing business as Credit Clerk, is a

Delaware limited liability company. Clerk Credit Systems LLC uses or has used

business addresses at 600 N. Broad Street, Suite 5-391, Middletown, Delaware; 325

NW 163 rd Street, Edmond, Oklahoma; 11914 N. Pennsylvania Avenue, Suite B-4,

Oklahoma City, Oklahoma; 8325 NW 163 rd Street, Edmond, Oklahoma; 440 N.

Barranca Avenue, Suite 4138, Covina, California; and 16192 Coastal Highway,

Lewes, Delaware. Clerk Credit Systems LLC transacts or has transacted business in

this district and throughout the United States. At all times relevant to this Complaint,

acting alone or in concert with others, Clerk Credit Systems LLC has advertised,

marketed, distributed, or sold credit repair services to consumers throughout the

United States.

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14. Defendant Clerk Credit Software LLC, also doing business as Credit Clerk, is a

Delaware limited liability company. Clerk Credit Software LLC uses or has used

business addresses at 8325 NW 163 rd Street, Edmond, Oklahoma; 1041 N. Dupont

Highway, Suite 1831, Dover, Delaware;16192 Coastal Highway, Lewes, Delaware.

Clerk Credit Software LLC transacts or has transacted business in this district and

throughout the United States. At all times relevant to this Complaint, acting alone or

in concert with others, Clerk Credit Software LLC has advertised, marketed,

distributed, or sold credit repair services to consumers throughout the United States.

15. Defendant Standard Scores LLC, formerly known as Standard Score LLC and also

doing business as Standard Scores, is a Delaware limited liability company and is also

registered as a foreign business entity in North Carolina. Standard Scores LLC uses

or has used business addresses at 3900 Westerre Parkway, Suite 300, Henrico,

Virginia; 509 Welwyn Road, Richmond, Virginia; 1032 E. Brandon Boulevard, Suite

1089, Brandon, Florida; 4801 E. Independence Boulevard, Suite 914, Charlotte, North

Carolina; 4030 Wake Forest Road, Suite 349, Raleigh, North Carolina; and 16192

Coastal Highway, Lewes, Delaware. Standard Scores LLC transacts or has transacted

business in this district and throughout the United States. At all times relevant to this

Complaint, acting alone or in concert with others, Standard Scores LLC has

advertised, marketed, distributed, or sold credit repair services to consumers

throughout the United States.

16. Defendant Collection Payments LLC is a Delaware limited liability company.

Collection Payments LLC uses or has used business addresses at 16192 Coastal

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Highway, Lewes, Delaware. Collection Payments LLC transacts or has transacted

business in this district and throughout the United States. At all times relevant to this

Complaint, acting alone or in concert with others, Collection Payments LLC has

advertised, marketed, distributed, or sold credit repair services to consumers

throughout the United States.

17. Defendant Collections Dispute LLC is a Delaware limited liability company.

Collections Dispute LLC uses or has used business addresses at 16192 Coastal

Highway, Lewes, Delaware. Collections Dispute LLC transacts or has transacted

business in this district and throughout the United States. At all times relevant to this

Complaint, acting alone or in concert with others, Collections Dispute LLC has

advertised, marketed, distributed, or sold credit repair services to consumers

throughout the United States.

18. Defendant Collections Expert LLC is a Delaware limited liability company.

Collections Expert LLC uses or has used business addresses at 16192 Coastal

Highway, Lewes, Delaware. Collections Expert LLC transacts or has transacted

business in this district and throughout the United States. At all times relevant to this

Complaint, acting alone or in conceit with others, Collections Expert LLC has

adve11ised, marketed, distributed, or sold credit repair services to consumers

throughout the United States.

19. Defendant Collections Support LLC is a Delaware limited liability company.

Collections Support LLC uses or has used business addresses at 16192 Coastal

Highway, Lewes, Delaware. Collections Support LLC transacts or has transacted

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business in this district and throughout the United States. At all times relevant to this

Complaint, acting alone or in concert with others, Collections Support LLC has

advertised, marketed, distributed, or sold credit repair services to consumers

throughout the United States.

20. Defendant Credit Cop LLC is a Delaware limited liability company. Credit Cop

LLC uses or has used business addresses at 8 The Green, Suite B, Dover, Delaware.

Credit Cop LLC transacts or has transacted business in this district and throughout the

United States. At all times relevant to this Complaint, acting alone or in concert with

others, Credit Cop LLC has advertised, marketed, distributed, or sold credit repair

services to consumers throughout the United States.

21. Defendant Dispute Collection LLC is a Delaware limited liability company.

Dispute Collection LLC uses or has used business addresses at 16192 Coastal

Highway, Lewes, Delaware. Dispute Collection LLC transacts or has transacted

business in this district and throughout the United States. At all times relevant to this

Complaint, acting alone or in concert with others, Dispute Collection LLC has

advertised, marketed, distributed, or sold credit repair services to consumers

throughout the United States.

22. Defendant Glorious Credit LLC is a Delaware limited liability company. Glorious

Credit LLC uses or has used business addresses at 16192 Coastal Highway, Lewes,

Delaware. Glorious Credit LLC transacts or has transacted business in this district

and throughout the United States. At all times relevant to this Complaint, acting alone

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or in concert with others, Glorious Credit LLC has advertised, marketed, distributed,

or sold credit repair services to consumers throughout the United States.

23. Defendant Joyful Credit LLC is a Delaware limited liability company. Joyful

Credit LLC uses or has used business addresses at 16192 Coastal Highway, Lewes,

Delaware. Joyful Credit LLC transacts or has transacted business in this district and

throughout the United States. At all times relevant to this Complaint, acting alone or

in concert with others, Joyful Credit LLC has advertised, marketed, distributed, or

sold credit repair services to consumers throughout the United States.

24. Defendant Alexander N. Brola is or was an owner, officer, director, member, or

manager of Credit Glory Inc., Credit Glory LLC, Credit Sage LLC, and Standard

Scores LLC. In particular, Defendant Brola is or was president, chief executive

officer, vice president, secretary, treasurer, chief financial officer, director, and owner

of Credit Glory Inc.; managing member, member, owner, president, chief executive

officer, and controlling officer of Credit Glory LLC; governor, member, managing

member, owner, officer, and president of Credit Sage LLC; and president, chief

operating officer, and member of Standard Scores LLC. Defendant Brola is an

authorized signatory authority on Defendants' bank accounts and merchant accounts

and account contact for Defendants' telecommunications services and Google

advertising services. At all times relevant to this Complaint, acting alone or in

concert with others, Defendant Brola has formulated, directed, controlled, had the

authority to control, or participated in the acts and practices described in this

Complaint. Defendant Brola resides in this District and, in connection with the

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matters alleged herein, transacts or has transacted business in this District and

throughout the United States.

25. Defendant Liam Pavel Tame Te Amorangi Tira Emery is or was an owner,

officer, director, member, or manager of Credit Glory LLC and Credit Sage LLC. In

particular, Defendant Emery is or was a member of Credit Glory LLC; and a member,

owner, and officer of Credit Sage LLC. Defendant Emery is an authorized signatory

authority on Defendants' bank accounts and merchant accounts. At all times relevant

to this Complaint, acting alone or in concert with others, Defendant Emery has

formulated, directed, controlled, had the authority to control, or participated in the

acts and practices described in this Complaint. Defendant Emery transacts or has

transacted business in this District and throughout the United States.

26. Defendant Marko Petkovic is or was an owner, officer, director, member, or

manager of Credit Glory LLC and Credit Sage LLC. In particular, Defendant

Petkovic is the chief executive officer and president of Credit Glory LLC; and chief

executive officer of Credit Sage LLC. At all times relevant to this Complaint, acting

alone or in concert with others, Defendant Petkovic has formulated, directed,

controlled, had the authority to control, or participated in the acts and practices

described in this Complaint. Defendant Petkovic transacts or has transacted business

in this District and throughout the United States.

27. Defendant Joshua Curtis is or was an owner, officer, director, member, or manager

of Joy Credit Software LLC and Standard Scores LLC. In particular, Defendant

Curtis is the owner, member, and chief executive officer of Joy Credit Software LLC;

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and the owner and chief executive officer of Standard Scores LLC. Defendant Curtis

is an authorized signatory authority on Defendants' bank accounts and merchant

accounts. At all times relevant to this Complaint, acting alone or in concert with

others, Defendant Curtis has formulated, directed, controlled, had the authority to

control, or participated in the acts and practices described in this Complaint. In

connection with the matters alleged herein, Defendant Curtis transacts or has

transacted business in this District and throughout the United States.

28. Defendant David Naylor is or was an owner, officer, director, member, or manager

of Clerk Credit Systems LLC, Clerk Credit Software LLC, and Collection Payments

LLC. In particular, Defendant Naylor is the owner, member, manager, and chief

operating officer of Clerk Credit Systems LLC; owner and manager of Clerk Credit

Software LLC; and sole member of Collection Payments LLC. Defendant Naylor is

an authorized signatory authority on Defendants' bank accounts and merchant

accounts. At all times relevant to this Complaint, acting alone or in concert with

others, Defendant Naylor has formulated, directed, controlled, had the authority to

control, or participated in the acts and practices described in this Complaint. In

connection with the matters alleged herein, Defendant Naylor transacts or has

transacted business in this District and throughout the United States.

COMMON ENTERPRISE

29. Defendants Credit Glory LLC (Delaware), Credit Glory LLC (Wyoming), Credit

Glory LLC (Nevada), Credit Glory Inc., Credit Sage LLC, Joy Credit Software LLC,

Clerk Credit Systems LLC, Clerk Credit Software LLC, Standard Scores LLC,

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Collection Payments LLC, Collections Dispute LLC, Collections Expert LLC,

Collections Support LLC, Credit Cop LLC, Dispute Collection LLC, Glorious Credit

LLC, and Joyful Credit LLC (collectively, "Corporate Defendants") have operated as

a common enterprise while engaging in the unlawful acts and practices described

below. Corporate Defendants have conducted the business practices described below

through an interrelated network of companies that have common ownership, officers,

business functions, employees, managers, and office locations, and have commingled

funds. Because these Corporate Defendants have operated as a common enterprise,

each of them is liable for the acts and practices alleged below.

COMMERCE

30. At all times relevant to this Complaint, Defendants have maintained a substantial

course of trade in or affecting commerce, as "commerce" is defined in Section 4 of

the FTC Act, 15 U.S.C. § 44.

DEFENDANTS' UNLAWFUL CREDIT REPAIR SCHEME

31. Since at least 2016, Defendants have falsely promised that they can successfully and

permanently remove negative information from consumers' credit histories or credit

reports, thereby improving consumers' credit scores. Defendants typically solicit

consumers primarily through one of two paths. First, Defendants work with Google

and use Google ads to induce consumers who are trying to contact debt collection

agencies and creditors to contact them instead. Second, Defendants use other Google

ads and operate numerous Internet websites to make deceptive claims regarding their

services to consumers looking to improve their credit.

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Path 1: Defendants Deceptively Impersonate Legitimate Debt Collection Entities

and Creditors

32. To induce the purchase of Defendants' credit repair services, Defendants impersonate

legitimate debt collection entities and creditors.

33. In many instances, consumers have been contacted by debt collection entities or

creditors, or the consumers find negative information on their credit reports placed by

legitimate debt collection entities or creditors. Consumers then conduct an Internet

search to obtain contact information for the debt collection entities or creditors.

34. For example, Transworld Systems, Portfolio Recovery Associates, and LVNV

Funding are several of the larger debt buyers and debt collectors in the United States.

Meanwhile, the Army & Air Force Exchange Service ("AAFES"), in addition to

running thousands of post and base exchanges and other stores, is the primary in

house debt collector for the Military Star Card, a private-label credit card used by

over one million servicemembers, veterans, and their families at military exchanges

and commissaries. And United Services Automobile Association ("USAA"), which

provides financial services such as credit cards and consumer loans exclusively to

members of the military, veterans, and their families, also engages in in-house

collections of debts owed to it. Other creditors, such as telecommunications providers

like AT&T, Sprint, and Verizon, will attempt in-house collection on delinquent

accounts before turning them over to third-party debt collection entities.

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35. Defendants, meanwhile, purchase ads from Google (known as Google ads) that

display in the search results of consumers searching for those entities' contact

information.

36. Among the various types of Google ads are text ads and call ads. With a text ad,

when the consumer clicks on the ad, they are directed to a specific landing page, i.e.,

the business's Internet website. Text ads can also have a feature known as a call

asset, usually noted by a separate phone icon, that, when clicked, initiates a call

directly to the business. Text and call ads generally appear above organic search

results (i.e., results that Google finds based on information contained in a website),

although for some queries organic search results may be above a Google ad. With

call ads and text ads with a call asset, consumers can initiate instantly a phone call to

the advertiser by simply clicking the ad or phone icon and without having to copy or

memorize the number or, in the case of a text ad, first go to the landing page of the

website. A Google ad has a number of components or assets, including keywords,

headlines, and descriptions. Keywords are specific words or phrases chosen by the

business to connect consumers' search queries to their ads; headlines are the

prominent, clickable text at the top of the ad; and descriptions are the text below the

headlines that provide more details to the ad. The headlines and descriptions

collectively are referred to as the ad's "creatives."

37. Defendants pay for ads on keywords in numerous variations on the names of debt

collection entities and creditors to appear in the search results for consumers making

search queries for those debt collection entities and creditors. For example, for a debt

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collection entity such as LVNV Funding, Defendants purchase ads on keywords such

as "LVNV Funding Contact," "LVNV Contact," "LVNV Funding Phone Number,"

and "LVNV Phone Number," with keywords for other debt collection entities, such as

Portfolio Recovery Associates, Transword Systems, or other debt collection entities

following the same pattern.

38. Likewise, Defendants purchase similar keywords for creditors, like AAFES, USAA,

AT&T, Sprint, and Verizon, such as "AAFES Collections," "AAFES Collections

number," and "AAFES Collections customer service."

39. Defendants then use ad creatives so that consumers searching for these real entities

find Defendants' ads. For example, Defendants use creatives that include headlines

such as:

•

"[name of specific debt collection entity, e.g., LVNV Funding, Portfolio

Recovery Associates, Transworld Systems, etc.]? Phone Now"

•

"[name of specific debt collection entity, e.g., LVNV Funding, Portfolio

Recovery Associates, Transworld Systems, etc.]? Call Us Now Now" or

•

"[name of specific debt collection entity, e.g., LVNV Funding, Portfolio

Recovery Associates, Transworld Systems, etc.]? Phone Us Now"

and descriptions such as:

•

"You may not have to pay. Call us today to for a free review. Take the first

steps to removing debt related obstacles in your life"

•

"Collections appearing on your report? Don't pay just yet. Call Collection

Experts today. It's possible to completely remove unverified debts. Call us

today for a free review" or

•

"Find Lvnv Funding On Your Report? Find Out Why & Remove It. Your

Freedom From Financial Stress Awaits. Call Us Today For Advice."

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40. Likewise with creditors, Defendants' creatives include such headlines and

descriptions as "[name of specific creditor, e.g., AAFES Collections, USAA

Collections, AT&T Collections Agency, Sprint Collections, Verizon Collections,

etc.]? Phone Now" and "You may not have to pay. Call us today to for a free review.

Take the first steps to removing debt related obstacles in your life."

41. Defendants' telemarketers typically do not inform consumers that they are not talking

with the debt collection entities or creditors even in circumstances where it is apparent

that the consumer is operating under that assumption. In addition, even when

consumers ask if they are talking with the debt collection entity or creditor,

Defendants' telemarketers often either mislead consumers into believing that they are

those entities or fail to disclose that they are not the debt collection entity or creditor.

42. Defendants are not the debt collection entities or creditors associated with consumers'

delinquent debts.

Path 2: Defendants Use Deceptive Internet Marketing

43. In addition, Defendants work with Google and use Google ads and Internet websites

to induce consumers to contact them regarding their credit repair services.

44. In numerous instances, consumers conduct an Internet search to obtain information on

how to improve their credit or resolve issues on their credit reports, such as removing

a credit or security freeze or inquiring about or resolving errors on their credit reports.

45. Defendants pay for ads on keywords that use the names of the three major consumer

reporting agencies ("CRAs"), such as "800 number for Equifax," "Equifax contact,"

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"Equifax contact number," "Equifax live person number," "Equifax number customer

service," and "Equifax phone number," "800 number for Experian," "Experian

contact," and "Experian contact number."

46. Defendants' creatives include such headlines and descriptions as "Freeze Your

Credit? (Call For Live Help) Remove Errors & Inaccuracies Freezing Doesn't

Resolve Credit Issues. Remove Errors & Inaccuracies Holding You Back. Call for

Live Help With A Specialist. We'll Assist You With A Simple, Easy Process" and

"Credit Report Disputes? Call Now Get Your Free Consultation Want To Dispute

Inaccurate or Unverifiable Items On Your Report? Speak With An Expert. We've

Disputed 1000s Of Errors For Our Customers. Fast, Simple Process."

47. Consumers clicking on the call ads or phone icon in a text ads are connected directly

with Defendants.

48. In addition, Defendants have also operated several Internet websites, including

creditglory.com, creditsage.com, creditjoy.com, and creditclerk.com that have made

the following statements regarding their credit repair services:

•

On average, we assist our clients boosting their FICO scores by 120 points,

tackling issues like collections, medical bills, and other negative items

•

We specialize in helping people improve their scores so they can enjoy better

approval odds + more favorable terms

•

Has your credit report been holding back your financial life? Many of our clients

come to us because they're strnggling to get approved for various loans. We're

here to try to fix that.

•

We've helped thousands of people fix their credit to get mortgages, auto loans,

and so much more

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95% customer satisfaction

49. Defendants' websites purport to have thousands of positive reviews. For example,

their website creditglory.com states "Over 6500 5-star reviews on Trustpilot," their

website creditsage.com states "Over 5000+ 5-star reviews," and their website

creditjoy.com states "Hear directly from the thousands of everyday Americans that we

have helped!"

50. Defendants' websites also depict purported success stories of consumers for whom

Defendants claim to have increased credit scores. The websites introduce these

purported success stories with statements such as "These are real results from the

thousands of clients we serve!" and "Our greatest customer success stories." For

example, the websites include the following:

•

"Carl F" whose credit score purportedly increased 213 points from 592 to 805;

•

"Fernando G" whose credit score purportedly increased 204 points from 526 to

730;

•

"Maria A" whose credit score purportedly increased 197 points from 542 to

739;

•

"Carlos F" whose credit score purportedly increased 191 points from 591 to

782;and

•

"Francesca B" whose credit score purportedly increased 177 points from 611

to 788.

The websites also highlight the following:

•

"Joel C" for whom Defendants purp011edly obtained 118 removals;

•

"Eli B" for whom Defendants purportedly obtained 106 removals;

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•

"Brandon R" for whom Defendants purportedly obtained 103 removals;

•

"Jose N" for whom Defendants purportedly obtained 83 removals.

•

"Randy M" for whom Defendants purportedly obtained 70 removals; and

51. Defendants' websites list toll-free numbers for consumers to call and have click-to

call links.

Defendants Make False Claims Regarding Their Credit Repair Services

52. Depending on which of the two paths described above led consumers to call

Defendants, Defendants' telemarketers make one of several sales pitches for

Defendants' credit repair services.

53. For consumers who think they are contacting a debt collection entity or creditor about

a delinquent debt, Defendants' telemarketers typically tell consumers that instead of

requiring consumers to pay the debt, Defendants can delete the debt and the

corresponding negative information from consumers' credit reports.

54. In other instances, Defendants' telemarketers state that consumers can pay Defendants

to resolve the debt, often at small discount, after which Defendants will remove the

negative information.

55. For either set of consumers, as well as consumers who are inquiring generally about

fixing their credit, Defendants' telemarketers explain that in many instances the

negative information on consumers' credit reports is inaccurate, and that Defendants

can remove that inaccurate information. In other instances, Defendants' telemarketers

state that Defendants will dispute negative information with the CRAs.

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56. Defendants' telemarketers then typically state that they need to charge consumers $1,

which they explain is necessary to verify consumers' identities or pull consumers'

credit report to review it. To pay the $1 charge, Defendants require consumers to

provide their financial information, including their credit or debit card number, on the

phone.

57. Defendants' telemarketers often then inform consumers that they are looking at their

credit reports and notice numerous errors that Defendants can use to remove negative

items. For example, Defendants' telemarketers state that consumers' personal

information, such as birthdate or address, is inaccurate or that an account that is listed

on one of the CRAs is not listed on the other two.

58. Defendants' telemarketers explain that they will use these inaccuracies to prepare

dispute letters that they will mail on consumers' behalf to the CRAs, and that upon

receipt of those letters, the CRAs will be required to remove the negative items at

issue.

59. Defendants' telemarketers typically state that as a result of Defendants' services,

consumers' credit scores will improve significantly within 90 days.

60. Defendants' telemarketers frequently state that they have a proven method that works

with a 95% satisfaction rate with their customers.

61. Defendants' telemarketers explain that in order to proceed with the credit repair

services, consumers need to sign a contract electronically that would be emailed to

them. Defendants then email consumers a link to an Internet website, such as

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Docusign, containing the electronic contract for consumers to sign digitally while still

on the phone with them.

62. Defendants' contracts do not include a full and detailed description of the services to

be performed by them for consumers, including, among other things, an estimate of

the date by which the performance of services wi 11 be complete or the length of time

necessary to perform such services. Nor do their contracts contain a conspicuous

statement in bold fact type, in immediate proximity to the space for consumers'

signatures, advising consumers of their right to cancel the contract within a specified

period of time.

63. Defendants' telemarketers state that, in addition to the $1 charge described above,

Defendants require an up-front fee, typically several hundreds of dollars. In those

instances where Defendants' telemarketers stated that consumers could pay

Defendants to resolve their outstanding debt, the amount of the up-front fee

approximates the amount of the debt, although often with a small discount.

64. Defendants' telemarketers typically state that consumers must also pay several

monthly fees: first, a monthly fee paid to Defendants of typically between $90 and

$99 that Defendants' telemarketers explain is a monthly maintenance fee; and second,

a monthly fee paid to Defendant Standard Scores, which the telemarketers represent

as being a third-party provider, of typically $24.95 or $24.99, that Defendants'

telemarketers claim is for credit monitoring and a necessary part of the credit repair

service. Defendants' telemarketers assure consumers that they will only pay those

fees for a few months, typically three, until the negative information is removed. In

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many cases, however, Defendants' telemarketers do not disclose the existence of the

recurring fees.

Defendants Do Not Follow Through on Their Credit Repair Promises

65. Defendants represent to consumers that they have submitted manual dispute letters to

one or more CRAs challenging some or all negative information in consumers' credit

reports. In many instances, however, these unsupported challenges have not caused

CRAs to permanently delete or change the information, as Defendants cannot remove

accurate, negative information that is not obsolete from consumers' credit reports.

66. In some instances, unbeknownst to consumers, Defendants also have filed, or caused

to be filed, on the FTC's Identitytheft.gov website identify theft reports, which are

then sent to the CRAs, that assert that some or all negative information on consumers'

reports was the result of identity theft. In fact, many consumers on whose behalf

Defendants filed, or caused to be filed, identity theft reports were not victims of

identity theft nor was the negative information in question the result of identity theft.

67. The filing of an identity theft report does not automatically result in the removal of

negative information from consumers' credit reports. CRAs typically review identity

theft reports submitted to them to determine whether those reports were wrongfully

filed, in which case the CRA may decline to block the requested negative information.

68. Thus, Defendants generally fail to remove negative information from consumers'

credit reports. And consumers who purchase Defendants' credit repair services do not

obtain the promised improvements to their credit scores. In fact, for some consumers,

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their credit scores actually worsened after purchasing Defendants' credit repair

services.

Defendants Charge Illegal Advance Fees

69. Almost immediately after turning over their payment information, Defendants charge

consumers' credit or debit cards for the $1 charge.

70. Shortly after signing the contract, Defendants charge consumers' credit or debit cards

in the up-front amount mentioned during the phone call.

71. Shortly after signing the contract, Defendants also begin charging consumers' credit

or debit cards for the recurring charges.

72. In some instances, Defendants charge the up-front fee and/or recurring fees even

when consumers did not sign the contract or otherwise agree to purchase Defendants'

credit repair services, including where consumers expressly stated they did not want

to purchase Defendants' services.

73. Defendants regularly charge consumers' credit or debit cards for these fees before

fully performing the promised credit repair service.

74. Defendants typically charge consumers' credit or debit cards before providing

consumers documentation in the form of a credit report demonstrating that the

promised results have been achieved, such credit report having been issued more than

six months after the results were achieved.

75. Defendants often charge consumers the monthly fee indefinitely, even when

Defendants' telemarketers state it would only be charged for three months.

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Consumer Harm

76. During the three years prior to the filing of this Complaint, Defendants have collected

at least $172.5 million from consumers through their unlawful credit repair scheme.

Ongoing Conduct

77. Based on the facts and violations of law alleged in this Complaint, the FTC has reason

to believe that Defendants are violating or are about to violate laws enforced by the

FTC.

VIOLATIONS OF THE FTC ACT

78. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits "unfair or deceptive acts or

practices in or affecting commerce."

79. Misrepresentations or deceptive omissions of material fact constitute deceptive acts or

practices prohibited by Section 5(a) of the FTC Act.

80. Acts or practices are unfair under Section 5 of the FTC Act if they cause or are likely

to cause substantial injury to consumers that consumers cannot reasonably avoid

themselves and that is not outweighed by countervailing benefits to consumers or

competition. 15 U.S.C. § 45(n).

COUNTI

Repair Representations

Credit

Deceptive

81. In numerous instances, in connection with the advertising, marketing, promotion,

offering for sale, or sale of credit repair services, Defendants represent, directly or

indirectly, expressly or by implication, that Defendants will significantly improve

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consumers' credit scores by, among other things, removing negative information

permanently from consumers' credit reports or profiles.

82. In numerous instances, Defendants' representations as described in Paragraph 81 are

false or misleading or were not substantiated at the time the representations were

made.

83. Therefore, Defendants' representations as described in Paragraph 81 are false or

misleading and constitute deceptive acts or practices in violation of Section 5(a) of the

FTC Act, 15 U.S.C. § 45(a).

COUNT II

Deceptive Impersonation Claims

84. In numerous instances, in connection with the advertising, marketing, promotion,

offering for sale, or sale of credit repair services, Defendants represent, directly or

indirectly, expressly or by implication, that Defendants are debt collection entities and

creditors.

85. In fact, in numerous instances in which Defendants have made the representations

described in Paragraph 84, Defendants are not debt collection entities or creditors.

86. Therefore, Defendants' representations as described in Paragraph 84 are false or

misleading and constitute deceptive acts or practices in violation of Section 5(a) of the

FTC Act, 15 U.S.C. § 45(a).

COUNTIII

Unfair Unauthorized Charges

87. In numerous instances, in connection with the advertising, marketing, promotion,

offering for sale, or sale of credit repair services, Defendants have charged consumers

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for credit repair services for which the consumers have not provided express informed

consent.

88. Defendants' practices as described in Paragraph 87 cause or are likely to cause

substantial injury to consumers that consumers cannot reasonably avoid themselves

and that are not outweighed by countervailing benefits to consumers or competition.

89. Therefore, Defendants' acts or practices as described in Paragraph 87 constitute unfair

acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. §§ 45(a) and

45(n).

VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT

90. The Credit Repair Organizations Act took effect on April 1, 1997, and has since that

date remained in full force and effect.

91. The purposes of CROA, according to Congress, are ( 1) to ensure that prospective

buyers of the services of credit repair organizations are provided with the information

necessary to make an informed decision regarding the purchase of such services; and

(2) to protect the public from unfair or deceptive advertising and business practices by

credit repair organizations. 15 U.S.C. § 1679(b).

92. CROA defines a "credit repair organization" as "any person who uses any

instrnmentality of interstate commerce or the mails to sell, provide, or perform (or

represent that they can or will sell, provide, or perform) any service, in return for the

payment of money or other valuable consideration, for the express or implied purpose

of ... improving any consumers' credit record, credit history, or credit rating .... "

15 U.S.C. § 1679a(3).

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93. Defendants are a "credit repair organization."

94. CROA prohibits all persons from making any statement, or counseling or advising

any consumer to make any statement, which is untrue or misleading with respect to

any consumer's credit worthiness, credit standing, or credit capacity to any consumer

reporting agency. 15 U.S.C. § 1679b(a)(l)(A).

95. CROA prohibits all persons from making or using any untrue or misleading

representation of the services of the credit repair organization. 15 U.S.C. §

1679b(a)(3).

96. CROA prohibits all persons from engaging, directly or indirectly, in any act, practice,

or course of business that constitutes or results in the commission of, or an attempt to

commit, a fraud or deception on any person in connection with the offer or sale of the

services of the credit repair organization. 15 U.S.C. § 1679b(a)(4).

97. CROA prohibits credit repair organizations from charging or receiving any money or

other valuable consideration for the performance of any service which the credit

repair organization has agreed to perform before such service is fully performed. 15

U.S.C. § 1679b(b).

98. CROA prohibits credit repair organizations from providing any services to a

consumer unless the credit repair organization has obtained a written and dated

contract that has been signed by the consumer. 15 U.S.C. § 1679d(a). CROA

requires credit repair organizations to include in those contracts the following terms

and conditions: ( 1) the terms and conditions of payment, including the total amount

of all payments to be made by the consumer to the credit repair organization or to any

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other person, (2) a full and detailed description of the credit repair services to be

performed by the credit repair organization for the consumer, including (a) all

guarantees of performance, and (b) an estimate of (i) the date by which the

performance of the services (to be performed by the credit repair organization or any

other person) will be complete or (ii) the length of the period necessary to perform

such services; (3) the credit repair organization's name and principal business

address; and (4) a conspicuous statement in bold face type, in immediate proximity to

the space reserved for the consumer's signature on the contract, which reads as

follows: "You may cancel this contract without penalty or obligation at any time

before midnight of the 3rd business day after the date on which you signed the

contract. See the attached notice of cancellation form for an explanation of this

right." 15 U.S.C. § 1679d(b).

99.Pursuant to Section 410(b)(l) of CROA, 15 U.S.C. § 1679h(b)(l), any violation of

any requirement or prohibition of CROA constitutes an unfair or deceptive act or

practice in commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

Pursuant to Section 410(b)(2) of CROA, 15 U.S.C. § 1679h(b)(2), all functions and

powers of the FTC under the FTC Act are available to the FTC to enforce compliance

with CROA in the same manner as if the violation had been a violation of any FTC

trade regulation rule. Section 19(a)(l) of the FTC Act, 15 U.S.C. § 57b(a)(l),

provides that the FTC may commence a civil action against "any person, partnership,

or corporation" who "violates any rule ... respecting unfair or deceptive acts or

practices." Section 19(b) of the FTC Act, 15 U.S.C. § 57b(b), provides that in any

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action commenced under Section 19(a)(l ), the court "shall have jurisdiction to grant

such relief as the court finds necessary to redress injury to consumers, including but

not limited to rescission or reformation of contracts, and the refund of money or

return of property."

COUNTIV

Misrepresentations Regarding Credit Repair Services

I 00.

In numerous instances, in connection with the advertising, marketing, promotion,

offering for sale, or sale of services to consumers by a credit repair organization, as

that term is defined in Section 403(3) of CROA, 15 U.S.C. § 1679a(3), Defendants

have made untrue or misleading representations to consumers, including that

Defendants will significantly improve consumers' credit scores by, among other

things removing negative information permanently from consumers' credit reports or

profiles.

IO 1.

Therefore, Defendants' acts or practices as set forth in Paragraph 100 violate

Section 404(a)(3) of CROA, 15 U.S.C. § 1679b(a)(3).

COUNTV

Filing False Identity Theft Reports

102.

In numerous instances, in connection with the advertising, marketing, promotion,

offering for sale, or sale of services to consumers by a credit repair organization, as

that term is defined in Section 403(3) of CROA, 15 U.S.C. § 1679a(3), Defendants

have made statements, or counseled or advised consumers to make statements, which

are untrue or misleading with respect to their credit worthiness, credit standing, or

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credit capacity to consumer reporting agencies, including filing identity theft reports

even when consumers have not, in fact, been victims of identity theft.

103.

Therefore, Defendants' acts or practices as set forth in Paragraph 102 violate

Section 404(a)(l)(A) of CROA, 15 U.S.C. § 1679b(a)(l)(A).

COUNT VI

Engaging in Fraudulent or Deceptive Credit Repair Practices

104.

In numerous instances in connection with the advertising, marketing, promotion,

offering for sale, or sale of services to consumers by a credit repair organization, as

that term is defined in Section 403(3) of CROA, 15 U.S.C. § 1679a(3), Defendants

have engaged, directly or indirectly, in acts, practices, or courses of business that

constitute or result in the commission of, or an attempt to commit, a fraud or

deception on any person in connection with the offer or sale of the services of the

credit repair organization, including (a) making untrue or misleading representations

to consumers, including that Defendants will significantly improve consumers' credit

scores by, among other things removing negative information permanently from

consumers' credit reports or profiles; and (b) filing identity theft reports on behalf of

consumers even when consumers have not, in fact, been victims of identity theft.

105.

Therefore, Defendants' acts or practices as set forth in Paragraph 104 violate

Section 404(a)(4) of CROA, 15 U.S.C. § 1679b(a)(4).

COUNT VII

Violation of Prohibition against Charging Advance Fees for Credit Repair Services

106.

In numerous instances, in connection with the advertising, marketing, promotion,

offering for sale, or sale of services to consumers by a credit repair organization, as

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that term is defined in Section 403(3) of CROA, 15 U.S.C. § 1679a(3), Defendants

have charged or received money or other valuable consideration for the performance

of credit repair services that Defendants have agreed to perform before such services

were fully performed.

107.

Section 404(b) of CROA, 15 U.S.C. § 1679b(b).

COUNT VIII

Failure to Include Required Terms and Conditions in Contracts

Therefore, Defendants' acts or practices as set forth in Paragraph 106 violate

108.

In numerous instances, in connection with the advertising, marketing, promotion,

offering for sale, or sale of services to consumers by a credit repair organization, as

that term is defined in Section 403(3) of CROA, 15 U.S.C. § 1679a(3), Defendants

have failed to include in their consumer contracts the following required terms and

conditions: ( 1) a full and detailed description of the credit repair services to be

performed by Defendants for the consumer, including (a) all guarantees of

performance, and (b) an estimate of (i) the date by which the performance of the

services (to be performed by Defendants or any other person) will be complete or (ii)

the length of the period necessary to perform such services; and (2) the specific

conspicuous statement in bold face type, in immediate proximity to the space reserved

for the consumer's signature on the contract, regarding the consumers' right to cancel

the contracts without penalty or obligation at any time before the third business day

after the date on which consumers signed the contracts.

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Therefore, Defendants' acts or practices as set forth in Paragraph 108 violate

Section 406(b) of CROA, 15 U.S.C. § 1679d(b).

Document 3

VIOLATIONS OF THE TELEMARKETING SALES RULE

110.

In 1994, Congress directed the FTC to prescribe rules prohibiting abusive and

deceptive telemarketing acts or practices pursuant to the Telemarketing Act, 15

U.S.C. §§ 6101-6108. The FTC adopted the original TSR in 1995, extensively

amended it in 2003, and amended certain sections thereafter.

111.

Under the TSR, a "telemarketer" means any person who, in connection with

telemarketing, initiates or receives telephone calls to or from a consumer or donor. 16

C.F.R. § 310.2(ff). A "seller" means any person who, in connection with a

telemarketing transaction, provides, offers to provide, or arranges for others to

provide goods or services to the customer in exchange for consideration. 16 C.F .R. §

310.2(dd). "Telemarketing" means a plan, program, or campaign which is conducted

to induce the purchase of goods or services by use of one or more telephones and

which involves more than one interstate telephone call. 16 C.F.R. § 310.2(gg). A

"negative option feature" means, in an offer or agreement to sell or provide any goods

or services, a provision under which the customer's silence or failure to take an

affirmative action to reject goods or services or to cancel the agreement is interpreted

by the seller as acceptance of the offer. 16 C.F.R. § 310.2(w).

112.

The TSR exempts from the Rule telephone calls initiated by a customer in

response to an advertisement through any medium other than direct mail solicitations,

except for calls initiated by a customer in response to advertisements involving offers

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for goods or services represented to remove derogatory information from, or improve,

a person's credit history, credit record, or credit rating. 16 C.F.R. § 310.6(b)(5)(i).

113.

Defendants are "seller[s]" or "telemarketer[s]" engaged in "telemarketing," as

those terms are defined in the TSR, 16 C .F .R. § 310 .2(dd), (ft), and (gg). Defendants'

monthly charges are a "negative option feature," as that term is defined in the TSR, 16

C.F.R. § 310.2(w).

114.

The TSR requires sellers and telemarketers, before a customer consents to pay for

any good or service that includes a negative option feature, to disclose truthfully, in a

clear and conspicuous manner, all material terms and conditions of the negative

option feature, including, but not limited to, the fact that the customer's account will

be charged unless the customer takes an affirmative action to avoid the charge(s), the

date(s) the charge(s) will be submitted for payment, and the specific steps the

customer must take to avoid the charge(s). 16 C.F.R. § 310.3(a)(l)(vii).

115.

The TSR prohibits sellers and telemarketers from misrepresenting, directly or by

implication, any material aspect of the performance, efficacy, nature, or central

characteristics of goods or services that are the subject of a sales offer. 16 C.F.R. §

310.3(a)(2)(iii).

116.

The TSR prohibits sellers and telemarketers from misrepresenting, directly or by

implication, any material aspect of a negative option feature, including, but not

limited to, the fact that the customer's account will be charged unless the customer

takes an affirmative action to avoid the charge(s), the date(s) the charge(s) will be

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submitted for payment, and the specific steps the customer must take to avoid the

charge(s). 16 C.F.R. § 310.3(a)(2)(ix).

117.

The TSR prohibits sellers and telemarketers from requesting or receiving payment

of any fee or consideration for goods or services represented to remove derogatory

information from, or improve, a person's credit history, credit record, or credit rating

until: (a) the time frame in which the seller has represented all of the goods or services

will be provided to that person has expired; and (b) the seller has provided the person

with documentation in the form of a consumer report from a consumer reporting

agency demonstrating that the promised results have been achieved, such report

having been issued more than six months after the results were achieved. 16 C.F .R. §

310.4(a)(2).

118.

The TSR prohibits sellers and telemarketers from causing billing information to be

submitted for payment, directly or indirectly, without the express informed consent of

the customer. 16 C.F.R. § 310.4(a)(7).

119.

Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. § 6102(c), and

Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of the TSR

constitutes an unfair or deceptive act or practice in or affecting commerce, in violation

of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). Section 19(a)(l) of the FTC Act,

15 U.S.C. § 57b(a)(l), provides that the FTC may commence a civil action against

"any person, partnership, or corporation" who "violates any rule ... respecting unfair

or deceptive acts or practices." Section 19(b) of the FTC Act, 15 U.S.C. § 57b(b),

provides that in any action commenced under Section 19(a)(l), the court "shall have

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jurisdiction to grant such relief as the court finds necessary to redress injury to

consumers, including but not limited to recission or reformation of contracts, the

refund of money or return of property."

COUNTIX

Misrepresentations Regarding Credit Repair Services

120.

In numerous instances, in connection with the telemarketing of debt relief

services, Defendants have misrepresented, directly or indirectly, expressly or by

implication, material aspects of the performance, efficacy, nature, or central

characteristics of their credit repair services, including but not limited to, that:

a. Defendants will significantly improve consumers' credit scores by, among other

things, removing negative information permanently from consumers' credit

reports or profiles; and

b. Defendants are debt collection entities and creditors.

121.

Therefore, Defendants' acts or practices as described in Paragraph 120 violate

Section 310.3(a)(2)(iii) of the TSR, 16 C.F.R. § 310.3(a)(2)(iii).

COUNTX

Advance Fees for Credit Repair Services

122.

In numerous instances, in connection with the telemarketing of credit repair

services, Defendants have requested or received payment of a fee or consideration for

credit repair services before: (a) the time frame in which Defendants have represented

all of the credit repair services will be provided to consumers has expired; and (b)

Defendants have provided consumers with documentation in the form of a consumer

report from a consumer reporting agency demonstrating that the promised results have

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been achieved, such report having been issued more than six months after the results

were achieved.

123.

Therefore, Defendants' acts or practices as described in Paragraph 122 violate

Section 310.4(a)(2) ofthe TSR, 16 C.F.R. § 310.4(a)(2).

COUNT XI

Unauthorized Billing

124.

In numerous instances, in connection with the telemarketing of credit repair

services, Defendants have caused billing information to be submitted for payment,

directly or indirectly, without the express informed consent of the customer.

125.

Therefore, Defendants' acts or practices described in Paragraph 124 violate

Section 310.4(a)(7) ofthe TSR, 16 C.F.R. § 310.4(a)(7).

COUNT XII

Failure to Make Required Disclosures Regarding Negative Option Features

126.

In numerous instances, in connection with the telemarketing of credit repair

services, Defendants have failed to disclose truthfully, in a clear and conspicuous

manner, before consumers consent to pay for Defendants' credit repair services, all

material terms and conditions of a negative option feature, in particular their monthly

charges, including, but not limited to, the fact that consumers' accounts will be

charged unless consumers take an affirmative action to avoid the charge, the date the

charges will be submitted for payment, and the specific steps consumers must take to

avoid the charges.

127.

Therefore, Defendants' acts or practices as described in Paragraph 126 violate

Section 310.3(a)(l)(vii) of the TSR, 16 C.F.R. § 310.3(a)(l)(vii).

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COUNT XIII

Misrepresentations Regarding Negative Option Features

128.

In numerous instances, in connection with the telemarketing of credit repair

services, Defendants have misrepresented, directly or indirectly, expressly or by

implication, material aspects of a negative option feature, in particular their monthly

charges, including, but not limited to, the fact that consumers' accounts will be

charged unless consumers take an affirmative action to avoid the charge, the date the

charges will be submitted for payment, and the specific steps consumers must take to

avoid the charges.

129.

Therefore, Defendants' acts or practices as described in Paragraph 128 violate

Section 310.3(a)(2)(ix) ofthe TSR, 16 C.F.R. § 310.3(a)(2)(ix).

VIOLATIONS OF THE GLB ACT

130.

Section 521 of the GLB Act, 15 U.S.C. § 6821, became effective on November 12,

1999, and remains in full force and effect. Section 521(a) of the GLB Act, 15 U.S.C.

§ 682l(a), prohibits any person from "obtain[ing] or attempt[ing] to obtain .. .

customer information of a financial institution relating to another person ... by

making a false, fictitious, or fraudulent statement or representation to a customer of a

financial institution."

131.

The GLB Act defines "customer" to mean "with respect to a financial institution,

any person (or authorized representative of a person) to whom the financial institution

provides a product or service, including that of acting as a fiduciary." 15 U.S.C.

§ 6827(1 ). The GLB Act defines "customer infotmation of a financial institution" as

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"any information maintained by or for a financial institution which is derived from the

relationship between the financial institution and a customer of a financial institution

and is identified with the customer." 15 U.S.C. § 6827(2). The GLB Act defines

"financial institution" to include "any institution engaged in the business of providing

financial services to customers who maintain a credit, deposit, trust, or other financial

account or relationship with the institution." 15 U.S.C. § 6827(4)(A).

132.

Section 522(a) of the GLB Act, 15 U.S.C. § 6822(a), empowers the FTC to

enforce Section 521 of the GLB Act "in the same manner and with the same power

and authority as the [FTC] has under the Fair Debt Collection Practices Act

[FDCPA] ... to enforce compliance with such Act." Pursuant to Section 814(a) of

the FDCPA, 15 U.S.C. § 1692/(a), a violation of the FDCPA is deemed an unfair or

deceptive act or practice in violation of the FTC Act. Section 814(a) of the FDCPA

further provides that all of the functions and powers of the FTC under the FTC Act

are available to the FTC to enforce compliance by any person with the FDCPA,

including the power to enforce provisions of the FDCPA in the same manner as if the

violation had been a violation of an FTC trade regulation rule. Section 19(a)(l) of the

FTC Act, 15 U.S.C. § 57b(a)(l), provides that the FTC may commence a civil action

against "any person, partnership, or corporation" who "violates any rule ...

respecting unfair or deceptive acts or practices." Section l 9(b) of the FTC Act, 15

U.S.C. § 57b(b), provides that in any action commenced under Section 19(a)(l), the

court "shall have jurisdiction to grant such relief as the court finds necessary to

redress injury to consumers ... " with such relief including but not limited to

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COUNT XIV

Use of False Statements to Obtain Customer Information

Filed 08/03/26

"recission or reformation of contracts [and] the refund of money or return of property

Document 3

133.

In numerous instances in connection with the advertising, marketing, promotion,

offering for sale, or sale of debt relief services, Defendants make false, fictitious, or

fraudulent statements or representations to customers of financial institutions to obtain

or attempt to obtain customer information of a financial institution of those customers,

such as credit and debit card numbers, including by representing, directly or

indirectly, expressly or by implication, that Defendants will significantly improve

consumers' credit scores by, among other things, removing permanently negative

information from consumers' credit repotis or profiles.

134.

Therefore, Defendants' acts and practices as described in Paragraph 133 violate

Section 521(a) of the GLB Act, 15 U.S.C. § 6821(a).

VIOLATIONS OF THE RESTORE ONLINE SHOPPERS CONFIDENCE ACT

135.

In 2010, Congress passed ROSCA, 15 U.S.C. §§ 8401-8405, which became

effective on December 29, 2010. Congress passed ROSCA because "[c]onsumer

confidence is essential to the growth of online commerce. To continue in

development as a marketplace, the Internet must provide consumers with clear,

accurate information and give sellers an opportunity to fairly compete with one

another for consumers' business." 15 U.S.C. § 8401(2).

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136.

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Section 4 of ROSCA, 15 U.S.C. § 8403, generally prohibits charging consumers

for goods or services sold in transactions effected on the Internet through a negative

option feature, as that term is defined in the TSR, 16 C.F.R. § 310.2(w), unless the

seller: (a) clearly and conspicuously discloses all material terms of the transaction

before obtaining the consumer's billing information, (b) obtains the consumer's

express informed consent before making the charge, and (c) provides simple

mechanisms to stop recurring charges. 15 U.S.C. § 8403.

137.

Pursuant to Section 5(a) of ROSCA, 15 U.S.C. § 8404(a), any violation of any

requirement or prohibition of ROSCA shall be treated as a violation of an FTC trade

regulation rule regarding unfair or deceptive acts or practices. Section 5(a) of

ROSCA further provides that all of the functions and powers of the FTC under the

FTC Act are available to the FTC to enforce compliance with ROSCA. Section

19(a)(l) of the FTC Act, 15 U.S.C. § 57b(a)(l), provides that the FTC may

commence a civil action against "any person, partnership, or corporation" who

"violates any rule ... respecting unfair or deceptive acts or practices." Section 19(b)

of the FTC Act, 15 U.S.C. § 57b(b), provides that in any action commenced under

Section 19(a)(l), the comi "shall have jurisdiction to grant such relief as the court

finds necessary to redress injury to consumers, including but not limited to rescission

or reformation of contracts, and the refund of money or return of property."

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COUNT XV

Failure to Provide Required Disclosures

138.

In numerous instances, in connection with charging consumers for goods or

services sold in transactions effected on the Internet through a negative option feature,

Defendants have failed to disclose clearly and conspicuously before obtaining

consumers' billing information all material terms of the transaction, including the fact

that consumers' accounts will be charged a monthly fee unless consumers take an

affirmative action to avoid the charge, the date the charges will be submitted for

payment, and the specific steps consumers must take to avoid the charges.

139.

Therefore, Defendants' acts and practices as described in Paragraph 138 violate

Section 4(1) of ROSCA, 15 U.S.C. § 8403(1).

COUNT XVI

Failure to Obtain Express Informed Consent

140.

In numerous instances, in connection with charging consumers for goods or

services sold in transactions effected on the Internet through a negative option feature,

Defendants have failed to obtain consumers' express informed consent before

charging consumers' credit card, debit card, bank account, or other financial account

for products or services through such transaction.

141.

Therefore, Defendants' acts and practices as described in Paragraph 140 violate

Section 4(2) of ROSCA, 15 U.S.C. § 8403(2).

VIOLATIONS OF EFTA AND REGULATION E

142.

Section 907(a) ofEFTA, 15 U.S.C. § 1693e(a), provides that "[a] preauthorized

electronic fund transfer from a consumers' account may be authorized by the

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consumer only in writing, and a copy of such authorization shall be provided to the

consumer when made." Section 903(10) ofEFTA, 15 U.S.C. § 1693a(l0), defines the

term "preauthorized electronic fund transfer" to mean "an electronic fund transfer

authorized in advance to recur at substantially regular intervals."

143.

Defendants' charging of a consumer's debit card for their recurring monthly fees

is a "preauthorized electronic fund transfer," as that term is defined in EFTA, 15

U.S.C. § 1693a(10).

144.

Section 1005.l0(b) of Regulation E, 12 C.F.R. § 1005.l0(b), provides that

"[p]reauthorized electronic fund transfers from a consumer's account may be

authorized only by a writing signed or similarly authenticated by the consumer. The

person that obtains the authorization shall provide a copy to the consumer."

145.

Section 1005.l0(b) of the Consumer Financial Protection Bureau's Official Staff

Commentary to Regulation E ("Official Staff Commentary to Regulation E"), 12

C.F.R. § 1005.l0(b), Supp. I, provides that "[t]he authorization process should

evidence the consumer's identity and assent to the authorization." 12 C.F.R. §

1005 .1 0(b ), Supp. I, cmt. 5. The Official Staff Commentary to Regulation E further

provides that "[a]n authorization is valid if it is readily identifiable as such and the

terms of the preauthorized transfer are clear and readily understandable." 12 C.F.R. §

1005.l0(b), Supp. I, cmt. 6.

146.

Pursuant to Section 918(c) ofEFTA, 15 U.S.C. § 1693o(c), every violation of

EFTA and Regulation E constitutes a violation of the FTC Act.

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COUNT XVII

Failure to Obtain Authorization for Recurring Charges to Consumers' Debit Cards

14 7.

In numerous instances, Defendants debit consumers' bank accounts on a recurring

basis without obtaining a written authorization signed or similarly authenticated from

consumers for preauthorized electronic fund transfers.

148.

Therefore, Defendants' acts and practices as described in Paragraph 147 violate

Section 907(a) ofEFTA, 15 U.S.C. § 1693e(a), and Section 1005.10(6) of Regulation

E, 12C.F.R. § 1005.10(6).

CONSUMER INJURY

149.

Consumers are suffering, have suffered, and will continue to suffer substantial

injury as a result of Defendants' violations of the FTC Act, CROA, the TSR, the GLB

Act, ROSCA, EFTA, and Regulation E. Absent injunctive relief by this Court,

Defendants are likely to continue to injure consumers and harm the public interest.

PRAYER FOR RELIEF

Wherefore, the FTC requests that the Court:

A. Enter a permanent injunction to prevent future violations of the FTC Act, CROA, the

TSR, the GLB Act, ROSCA, EFTA, and Regulation E;

B. Grant preliminary injunctive and ancillary relief as may be necessary to avert the

likelihood of consumer injury during the pendency of this action and to preserve the

possibility of effective final relief, including temporary and preliminary injunctions,

an order freezing assets, immediate access to Corporate Defendants' premises, and

appointment of a receiver;

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C. Award monetary and other relief within the Court's power to grant, including the

rescission or reformation of contracts, the refund of money, or other relief necessary

to redress injury to consumers; and

D. Award any additional relief as the Court determines to be just and proper.

Dated: August 3, 2026

Respectfully submitted,

A~/!!:;:;arNo.

39131)

G/J;;;J;;;

BENJAMIN R. CADY (NY Bar No. 5133582)

Federal Trade Commission

600 Pennsylvania A venue NW

Washington, DC 20850

Telephone: 202-326-3719 (Ashe)

Telephone: 202-326-2939 (Cady)

Email: gashe@ftc.gov, bcady@ftc.gov

Attorneys for Plaintiff

FEDERAL TRADE COMMISSION

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.