WASHINGTON, D.C. — The Federal Trade Commission has secured a temporary federal court order halting an alleged credit-repair operation that regulators say extracted nearly $200 million from consumers through deceptive marketing, illegal advance fees and recurring charges dating to at least 2016.
The FTC sued a network operating under Credit Glory and related names, along with five principals — Alexander Brola, Liam Emery, Marko Petkovic, Joshua Curtis and David Naylor — in the U.S. District Court for the District of Arizona. The agency alleges the defendants violated multiple federal consumer-protection laws.
The court’s temporary intervention stops the operation while the FTC pursues its case. The allegations have not been adjudicated, and the FTC notes that the case ultimately will be decided by the court.
At the center of the complaint is an alleged advertising strategy that used paid Google search results to intercept consumers seeking information about debts they owed. According to the FTC, the defendants promoted services with claims that they could substantially improve credit scores by removing negative information from credit reports.
The agency alleges some advertisements specifically targeted military servicemembers who owed money to military-related creditors, including the Army & Air Force Exchange Service and USAA.
When consumers contacted the operation, telemarketers sometimes allegedly led them to believe they were speaking with their actual creditor or a legitimate debt collector, according to the complaint.
The FTC alleges the defendants then disputed legitimate debts and, in some cases, submitted false identity-theft reports through IdentityTheft.gov without consumers’ knowledge in attempts to alter their credit records. The agency maintains those actions did not produce the promised improvements in consumers’ credit scores.
“Using paid Google search ads to target and deceive vulnerable consumers, including military servicemembers, through falsely promising to improve their credit is egregious behavior that will not be tolerated by the FTC,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, stated.
The complaint also targets how consumers were charged. The FTC alleges telemarketers initially collected $1 from consumers, sometimes describing the charge as necessary to verify an identity or review a credit report, before requiring another advance payment that typically totaled hundreds of dollars.
Federal law restricts credit-repair organizations from collecting payment before promised services have been fully performed.
Regulators further allege consumers were enrolled in recurring charges through a negative-option system without adequate disclosure or express informed consent. Although telemarketers allegedly told some customers that payments would continue for only a few months, consumers reported being billed until they affirmatively canceled, according to the FTC.
The operation also routinely denied refund requests, the agency alleges.
The defendants named in the complaint include Credit Glory LLC entities incorporated in three states, Credit Glory Inc., Credit Sage LLC, Joy Credit Software LLC, Clerk Credit Systems LLC, Clerk Credit Software LLC, Standard Scores LLC, 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, along with the five individual defendants.
The FTC alleges the conduct violated the FTC Act, Credit Repair Organizations Act, Telemarketing Sales Rule, Gramm-Leach-Bliley Act, Restore Online Shoppers’ Confidence Act and Electronic Fund Transfer Act.
The commission voted 2-0 to authorize filing the complaint. Gregory A. Ashe and Benjamin Cady of the FTC’s Bureau of Consumer Protection are among the lead attorneys handling the matter.
Under the FTC’s procedures, filing a complaint means the commission has “reason to believe” the defendants are violating or are about to violate the law and considers legal proceedings to be in the public interest. The filing itself does not establish liability.
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