FTC Settles with Operators of Alleged Credit Repair Scheme

  • The FTC settled a lawsuit with Michael and Valerie Rando and affiliated entities for allegedly violating the FTC Act, the Credit Repair Organizations Act, the FTC’s Telemarketing Sales Rule, the COVID-19 Consumer Protection Act, and the FTC’s Trade Regulation Rule entitled “Disclosure Requirements and Prohibitions Concerning Business Opportunities,” by falsely promising consumers that their credit would be improved through the use of the defendants’ credit repair services.
  • According to the complaint, the defendants claimed through various marketing channels that they could quickly and legally improve consumers’ credit scores, remove negative items on a credit report, and cause a third party’s credit history to appear on the consumer’s credit report through so-called “credit piggybacking.” The FTC alleges these claims were false, and that the defendants generated more than $15 million in revenue from their unlawful scheme.
  • Under the terms of the settlement, a judgment of $18.9 million was entered against the defendants. In satisfaction of the judgment, Defendants are required to surrender specifically enumerated assets, including real property, luxury vehicles, and luxury watches and purses. The settlement also permanently bans the defendants from operating or assisting in any credit repair service, and from making claims about the efficacy of any goods or service without sufficient supporting evidence.