FTC Cracks Down on Credit Repair Firms; O.C. Man Targeted
In a new crackdown on credit repair schemes, the federal government and several states have accused 20 companies of making false claims that they can repair consumers’ bad credit ratings.
A Los Alamitos man and two Woodland Hills men were targeted as part of the probe.
In civil complaints filed in federal and state courts, the Federal Trade Commission and state attorneys general contend that the companies made deceptive claims that, for a fee, they could improve customers’ credit ratings by removing derogatory information from credit files.
The FTC won orders temporarily halting Brian Dale Prater of Los Alamitos from making deceptive claims and otherwise operating illegally. The agency also obtained a court order freezing his assets.
The agency sued Keith H. Gill and Richard Murkey, both of Woodland Hills, in an effort to halt them from operating a similar business through advertisements, referrals and hourlong weekly radio broadcasts.
Neither Gill, a lawyer, nor Murkey could be reached for comment. They face a court hearing on Wednesday. The FTC said that Murkey had resigned as a lawyer.
The agency, which for several years has tried to halt deceptive practices in the credit repair business, decided to launch what it calls Operation Eraser to focus local, state and federal authorities on eliminating such companies.
Prater, who operates Pathfinder Research Co. in Lakewood, is accused of collecting $300 to $599 in up-front fees for promises to remove even the negative credit remarks that were legitimately on consumers’ credit reports.
“If information on a report is accurate and not obsolete, there is no legal mechanism for removing it,” said Raymond E. McKown, an FTC staff attorney.
Prater, reached at his office, would not comment. His lawyer, David Gregory of Riverside, said: “At this point, the situation is difficult, to say the least.”
Gregory said his client is cooperating fully with the FTC. He said he and his client are still trying to completely understand the four-inch stack of legal papers served Monday on Prater.
In a separate case, the agency said that the consumer fraud division of the Orange County district attorney’s office filed an agreement settling accusations involving John T. Detrick, who does business as the Credit Guild.
In the lawsuits nationwide, the agency asked the courts for injunctions to bar allegedly false advertising claims made by the companies, partially through unsolicited e-mail.
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The Associated Press contributed to this report.
