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Rubbing Out Credit Fraud

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In the ongoing Federal Trade Commission crackdown on fraudulent repair companies, known as Operation Eraser, another four cases have recently been settled. Operation Eraser is the first combined effort to utilize the Credit Repair Organization Act (CROA) – a new federal law designed to help consumers combat fraudulent credit repair operations.
Thirty-one companies were targeted by federal and state law enforcement agencies. The defendants in these cases guaranteed consumers that they could remove accurate negative information from their credit reports, restoring their creditworthiness for a fee, sometimes in excess of $1,000. In some cases, these credit repair companies advised consumers to take fraudulent actions, such as using false Social Security numbers, which would constitute a felony. In actuality, consumers have a legal right to have those errors corrected for free most of the time.

The four recent settlements, all of which have been approved by the courts, prohibit defendants from:

–representing that anyone can improve consumer credit reports by removing truthful negative information;

–making any misrepresentation about their ability to improve any particular consumers credit report;

–making any material misrepresentation about any product or service they sell; and

–accepting money in advance of performing credit repair services.

The orders further require the defendants to comply with the CROA; to notify any credit bureau to which they have made a negative report about any of the customers that the negative item should be removed; and to notify any customers who may still owe money for credit repair services that they are no longer obligated to pay.

The four defendants in the recent settlements are:

… Nationwide Credit Information Service, Inc., and Neil Angelicola of Freehold, New Jersey;

… Credit Corporation of America, Inc., Credit Advisors, Inc., and Gregory J. Ruiz of New Orleans, Louisiana;

… Cornerstone Wealth Corp. and its president, John Atchley, operating out of Dallas, Texas; and

… Credit Report Counselors and its principal, Mark Reiber of Cincinnati, Ohio.

In addition, a final order was entered against Compass Northeast Credit Service, Nathaniel Harrell, Jr. and Valerie Harrell of Columbia, South Carolina, when the defendants failed to reply to the FTCs allegations.

The settlement with the Credit Report Counselors defendants also required them to pay a $5,000 civil penalty, payable in five monthly installments. The Compass Northeast Credit defendants are required to pay a judgment of $235,609.50 to be used for consumer redress. It is uncertain if they have the assets with which to pay the judgment.

Copies of the news release and the five orders are available from the FTCs Web site at

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