In two lawsuits filed by the Federal Trade Commission against credit restoration firms, the defendants agreed to settlements of more than $2.8 million. But the agency suspended most of the money portion of the settlements because the defendants were broke.
Sam Tarad Sky and several companies he owns have agreed to a $2.6 million settlement with the Federal Trade Commission, according to a March 18 press release.
In a lawsuit filed during January in U.S. District Court for the Middle District of Florida, the FTC claims consumers were told that derogatory credit such as judgments, foreclosures and bankruptcies could be removed regardless of the accuracy or the age of the information. Even tax liens and child support delinquencies were touted as removable.
Customers were allegedly charged $2,199 before any work was performed and weren’t given a three-day cancellation option. They were told that creditors would discount debt by 70 percent.
One tactic allegedly used by Sky, his attorney Kurt A. Streyffeler and the law firm of Kurt A. Streyffeler, P.A., was to falsely tell consumer reporting agencies that consumers were identity theft victims.
The FTC, however, suspended the judgment payment because the defendants didn’t have the assets to pay the penalty.
Earlier last month, the FTC announced a settlement in its lawsuit with Advantage Credit Repair LLC and Mark D. Solomon. The complaint was originally filed during 2008 in U.S. District Court for the Northern District of Illinois.
The FTC claims Advantage, like Sky, falsely promised to remove negative credit information even if it was accurate and current. Advantage charged $495 up-front for individuals and $665 for couples despite advertisements that reportedly said, “We would never charge a large fee up front.”
A $226,794 judgment against the defendants will be suspended after a $20,000 payment.
Federal Trade Commission, Plaintiff, v. Credit Restoration Brokers, LLC, a Florida limited liability company, also doing business as Clear Credit Sam Sky and Sam Sky Credit Guy; Debt Negotiation Associates, LLC, a Florida limited liability company; Sam Tarad Sky, individually and as an owner, officer, or director of Credit Restoration Brokers, LLC, and Debt Negotiation Associates, LLC; Kurt A. Streyffeler, P.A., a Florida corporation; and Kurt A. Streyffeler, individually and as an owner, officer, or director of Kurt A. Streyffeler, P.A., Defendants.
Case No. 2:10-cv-00030-CEH-SPC, FTC File No. 082 3001, Jan. 20, 2010 (U.S. District Court for the Middle District of Florida, Fort Myers Division)
Federal Trade Commission v. Advantage Credit Repair LLC and Mark D. Solomon.
Civil Action No. 1:08-CV-05994, FTC File No. 082 3223, Oct. 20, 2008 (U.S. District Court for the Northern District of Illinois).
