Consumer Payment Card News

Operation Eraser Update

Another of the 31 cases comprising Operation Eraser has been settled. Florida Attorney Jack Schrold has agreed to a settlement with the Federal Trade Commission over his role in an illegal credit repair business.

Operation Eraser was initiated in March 1998 in an effort to crack down on fraudulent credit repair companies. In each of the cases, the defendants were charged with operating deceptive credit repair schemes promising consumers that they would restore their creditworthiness for a fee. In the latest settlement, Schrold will be required to pay an $11,000 civil penalty, and will be prohibited from further misrepresentations with regard to credit repair services. In addition, he will be required to notify any credit bureau to whom he made a negative report about any of his customers, telling them that the negative item should be removed. He must also notify any of his customers who still owe money for credit report services, indicating that they are not obligated to pay.

Schrold, who advertised on the Internet and in various newspapers nationally, charged a retainer of $99 and $25 for each item successfully removed from the consumers credit record. In actuality, no one can remove legitimate negative information from credit reports, and where there are actual errors, consumers have the legal right to have those corrected for free in most cases.

The FTC charged Schrold with violating the FTC Act by making deceptive claims about improving consumers credit records, and with violating the Credit Repair Organization Act (CROA) by requiring advance payment for credit repair services and misrepresenting the credit repair services that would be performed. The FTC will monitor Schrolds compliance with the terms of the settlement.

You can find out more about Operation Eraser, or receive a number of publications concerning consumer credit issues, by contacting the FTCs Web site, Other ways to reach the FTC: write them at FTC Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; call them at 202-FTC-HELP (202-382-4357); or TDD for the hearing impaired at 202-326-2502.

Copies of the latest settlement will be available shortly. The FTC also provides a hotline for the latest news as it is announced: 202-326-2710.

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