A federal court has temporarily shut down Credit Glory and a web of affiliated credit repair companies that the Federal Trade Commission alleges impersonated some of the largest names in the servicing and collection industry to deceive consumers out of at least $172.5 million.
In a complaint filed under seal August 3 in the District Court for the District of Arizona, the FTC alleges that since at least 2016, the operation purchased Google search ads keyed to the names of legitimate debt collectors and creditors, including Portfolio Recovery Associates, LVNV Funding, and Transworld Systems, so that consumers searching for those companies’ contact information reached Credit Glory telemarketers instead. The defendants also allegedly targeted military servicemembers by buying keywords tied to AAFES and USAA collections.
According to the complaint, telemarketers routinely failed to correct consumers’ assumption that they had reached the actual collector or creditor, and in some cases affirmatively misled them. Consumers were then pitched credit repair services with promises of significant score improvements within 90 days, charged an illegal $1 verification fee, an upfront fee typically in the hundreds of dollars, and recurring monthly fees of $90 to $99 plus a $24.95 or $24.99 credit monitoring charge paid to defendant Standard Scores, which telemarketers represented as a third party. The FTC alleges the operation also filed false identity theft reports on Identitytheft.gov without consumers’ knowledge in an attempt to force removal of accurate tradelines.
The complaint names 17 corporate entities and five individual principals, alleging violations of the FTC Act, CROA, the Telemarketing Sales Rule, the Gramm-Leach-Bliley Act, ROSCA, and the EFTA. On August 4, Judge Steven Logan granted the FTC’s ex parte motion for a temporary restraining order, freezing the defendants’ assets and appointing Thomas McNamara as temporary receiver with authority to take control of the companies’ premises, domains, and records. A preliminary injunction hearing is set for August 12 in Phoenix.
Read the complaint. Read the order.
