Worse yet, according to the FTC, after taking consumers' money, Successful Credit Service typically did "little, if anything, to fulfill the promises" it made. In fact, clients often found it difficult to even contact their account executive at the firm. When they did, they were frequently "given a variety of excuses as to why the promised results have not been achieved." When consumers asked for refunds, they were "almost always denied."
The FTC's settlement with Successful Credit and Ballard included an $8.3 million judgment, and prohibited them from engaging in unlawful credit repair practices. However, collection of the $8.3 million was suspended because the firm and Ballard do not have financial assets to pay the judgment. In the settlement agreement, Successful Credit and Ballard admitted that they "charged or received money" for services before the services were fully performed.
Neither Ballard nor the firm could be reached for comment. Successful Credit Service's Web site is no longer functional.
The FTC's second settlement was with two individuals in Texas who operated several credit repair companies that advertised heavily on the Internet and in national print publications. The FTC charged that Rudolph Joseph Strobel and Leanna Ruth Harrison ran Lee Harrison Credit Restoration and other firms that allegedly promised, following payment of upfront fees, to scrub away anything negative in consumers' credit bureau files.
One of the firm's Web sites allegedly targeted clients who had filed for bankruptcy -- an event that typically remains on file for seven to 10 years, and sends credit scores plummeting by hundreds of points. "Have you had a bankruptcy?" the FTC's complaint quotes the Credit Restoration Web site. "We will repair your credit so that this past event does not haunt your future. ... We clean up your report's history and increase your score (high scores are our specialty.)"
But clients who signed up for services costing as much as $1,150 usually got no improvements in their credit files, said the FTC. When they complained, their "e-mails and voicemails frequently (went) unanswered."
In the settlement, neither Strobel nor Harrison admitted wrongdoing but agreed to a suspended monetary judgment of $2.5 million. Neither could be reached for comment.
Bottom line here: In the words of Anne LeJeune, the FTC lead attorney in the Texas case, "people need to be wary when someone offers them a quick fix" on their credit problems. Why? Because fixes -- quick or otherwise -- are not possible or legal if the negative information is correct.
Finally, never pay money upfront. It's a tip-off you shouldn't ignore.