Writer: Lucy Lazarony
Editor: Adam West
Reviewer: Ashley Fricker
Key Takeaways
- A federal court has temporarily stopped an alleged $200 million credit repair scheme, at the request of the Federal Trade Commission.
- In some cases, the defendants specifically targeted military service members in their alleged credit repair scheme.
- The defendants allegedly claimed that their credit repair services would substantially improve consumers’ credit scores by removing negative items from consumers’ credit reports.
Credit Glory promised better credit scores. The Federal Trade Commission says it instead charged people illegal fees, collecting nearly $200 million before a federal court temporarily shut down the operation.
Credit Glory may read like the name of a single company, but the FTC describes it as a network of 16 related entities within a broader operation involving 17 companies. The agency says the defendants have made false and misleading credit repair promises since at least 2016.
The FTC says the defendants posed as debt collectors and creditors, charging illegal upfront fees, and signing consumers up for recurring subscriptions without their consent.
Among the laws Credit Glory is accused of breaking are the FTC Act, the Credit Repair Organizations Act, the Telemarketing Sales Rule, the Gramm-Leach-Bliley Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Fund Transfer Act.
“Using paid Google search ads to target and deceive vulnerable consumers, including military servicemembers … is egregious behavior.” — Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection
The defendants allegedly used paid Google search ads to reach people looking for information about their debts, and some of those ads targeted military servicemembers who owed money to the Army & Air Force Exchange Service and USAA, according to the FTC.
“Using paid Google search ads to target and deceive vulnerable consumers, including military servicemembers, through falsely promising to improve their credit is egregious behavior that will not be tolerated by the FTC,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection.
What Happened After Consumers Signed Up
Credit Glory claimed it could improve consumers’ credit scores by convincing credit bureaus to remove negative information from their credit reports. According to the FTC, disputing legitimate debts and filing false identity theft reports did not improve consumers’ credit scores.
The agency says some telemarketers posed as debt collectors or creditors while selling the service. Credit Glory representatives then allegedly disputed legitimate debts and, in some cases, filed false identity theft reports without consumers’ knowledge.
The fees charged by Credit Glory started small with telemarketers asking consumers for $1, sometimes claiming the fee was needed to verify their identity or review a credit report.
But the $1 charge was only the beginning: The defendants allegedly charged consumers additional upfront fees — typically hundreds of dollars — before providing any services. To make matters worse, some consumers were also enrolled in recurring charges without their express informed consent, the FTC alleges.
How to Spot a Shady Credit Repair Offer
The allegations against Credit Glory include several common warning signs identified by the Consumer Data Industry Association, a trade group for credit bureaus and other consumer-reporting companies.
Charging for credit repair services upfront is one major red flag. The CDIA also warns consumers about companies that guarantee results or encourage them to dispute accurate information on their credit reports.
The trade group also says consumers should also be wary of any company that tells them to ignore the credit bureaus or does not clearly explain their legal rights.
