FTC Targets 16 ‘Credit-Repair’ Firms

Alarmed by a rise in credit-repair scams on the Internet, state and federal regulators took aim Monday at 16 companies--including six in California--that allegedly sold bad or illegal advice to consumers struggling to recover from bankruptcy and other credit problems.

All the companies used Web sites or unsolicited junk e-mail to target individuals with credit problems, offering to sell them credit-repair “kits” that would erase their past financial problems, Federal Trade Commission officials said.

Most of the kits--costing $21.95 to $129.95--instructed consumers to create new identities by changing their name and address, using fake Social Security numbers or obtaining federal taxpayer identification numbers and passing them off as Social Security numbers.

But such actions violate state and federal laws and could put consumers at risk of criminal prosecution, regulators warned.

Representatives of the major U.S. credit bureaus say there is no legal method to remove legitimate blemishes from a credit report.

The crackdown follows a similar move in February against 40 credit-repair firms nationwide.

The FTC is seeking injunctions to prevent the firms from selling the credit-repair kits. It also plans to impose civil fines, which would be used to give refunds to consumers.

The California defendants are Fontana-based West Coast Publications, Crescent Information Services of San Diego, Los Angeles firms Internet Publications and F.P.R., Los Alamitos-based DG Publishing, and U.S. Publishing & List Exchange of Santa Clara County.