Firm’s Claim of ‘Credit Repair’ Sparks State Suit : Litigation: Anaheim company that advertises heavily is accused of falsely claiming to have negative items removed from reports.

A so-called “credit repair” company that advertises heavily on television and radio was sued Wednesday by the state attorney general’s office for allegedly engaging in false advertising and unfair competition.

United Credit Repair Inc. in Anaheim, which is also known as UCR, was named in the lawsuit along with two men who were respectively identified as its owner and president, Ray Reynolds and T.R. Termohlen. The lawsuit seeks damages in excess of $500,000.

The company’s ads falsely promise to have negative items in consumers’ credit reports removed, including bankruptcies, tax liens, late or missed loan payments and repossessions, said Deputy Atty. Gen. Susan Henrichsen.

“We have information that they cannot deliver on their promise,” she said.

United Credit charges consumers between $400 and $1,000 to have credit reports cleaned and promises a “100% guarantee” of success, the lawsuit states. “Such representations are untrue or misleading in that defendants fail to provide the services as promised and fail to disclose the terms and conditions of such guarantees,” the suit states.

United Credit officials said they are reviewing the lawsuit and would have no comment Wednesday.

Henrichsen said the attorney general’s consumer law division in San Diego has sued five or more credit repair companies in the past five years over similar claims. The office has investigated about 30 similar companies during that period, but many went out of business before any legal action could be taken.

The action comes about three weeks after the attorney general’s office joined several other states in bringing two lawsuits against one of the nation’s largest credit bureaus, TRW Credit Data Division in Orange. Henrichsen said the TRW and United Credit cases are completely unrelated.

Credit bureau officials say credit repair clinics typically operate by making repeated requests to have information on a consumer’s report checked. By doing this, they try to take advantage of a provision of the law that requires a credit bureau to remove negative information if a creditor doesn’t re-verify it.

“We feel they do a tremendous disservice to consumers,” TRW spokeswoman Susan Murdy said of credit repair clinics. “They promise to clean up credit from a credit report, and that’s against the law. No one can make that promise. Negative, accurate information cannot be taken off a report by anybody.”