Texas Court Grants Injunction Against Credit Repair Company

The Federal Trade Commission (FTC) had applied for an injunctive order against Turbo Solutions Inc. for multiple violations. Turbo Solutions Inc. also operated as Alex Miller Financial Services and Alex Miller Credit Repair. They are now all facing this injunctive order due to violations of the FTC Act, Credit Repair Organizations Act (CROA) and Telemarketing and Consumer Fraud and Abuse Prevention Act (TCFAP). 

The Defendant had falsely claimed they can improve consumers’ credit scores by removing all negative items from their credit reports and adding credit building products. They also filed or caused to be filed fake identity theft reports on the FTC’s identity theft website. Despite it being prohibited, they routinely took advanced fees for their credit repair services. Furthermore, they did not make the required disclosures regarding the taking of these fees. 

Injunction Granted

The Court granted the FTC the order against the Defendant and as such the Defendant is now subject to strict controls on their activities. 

The Defendant and its agents will now be unable to charge or receive money or other valuable consideration:

• For providing any service related to improving a consumers’ credit score
• Providing advice regarding a consumers’ credit score before such service is fully performed
• In advance of obtaining a loan or other extension of credit for any person, in violation of 16 C.F.R. 310.4 

Communications

They are not allowed to communicate, expressly or via implication, that any credit building product will substantially improve any persons’ credit score or credit rating. Any communications suggesting any person can remove unwanted information from their credit score is prohibited. Also, claiming someone was a victim of identity theft when they were not is a clear violation of the injunction. These communications include telemarketing, websites, and social media. On the subject of identity theft, not only are they are not allowed to file an identity theft report on behalf of a third party, they must not encourage others to do it either. 

Law Requirements

It was found that they have been neglecting to do certain things that are required by law:

• Provide any person a written statement of Consumer Credit File Rights under State and Federal Law in connection with credit repair services
• Include in contracts for any credit repair services the following required terms and conditions:
  • A full, detailed description of the services to be performed for the consumer, including:
    • All guarantees of performance
    • An estimate of the date by which the performance of credit repair services will be complete
    • The length of the period necessary to perform credit repair services
    • A conspicuous statement:
      • In bold type face
      • 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 the consumers signed the contract
• Provide any person with a:
  • Separate form with the heading “Notice of Cancellation”, in the form and manner required by law
  • Completed contract and all disclosures required under CROA
  • A copy of any other document such person is required to sign.

The Court also made it clear that the Defendant is prohibited from destroying any records. 

Getting caught out in situations surrounding privacy and data practices can be severely damaging to an organization. At Value Privacy we can conduct a comprehensive assessment of all policies and practices. On top of this we can also assess where you may be at risk of a cyber-attack. Not acting can cost more than being prepared, contact us today.