At the request of the Federal Trade Commission, a federal court has temporarily halted a bogus credit repair scheme known as The Credit Game for promoting a series of lies and deceptions.
The FTC alleged the operators lied to credit reporting agencies regarding information on consumer credit reports and pitched consumers a supposed business opportunity that was essentially starting their own bogus credit repair scheme.
“Credit repair schemes cheat those already in financial trouble, and these defendants even tried to redirect COVID-19 tax benefits into their own pockets,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “We’re grateful that the court disrupted this web of deception.”
In a complaint filed against The Credit Game and its owners, Michael and Valerie Rando, the FTC alleged the company has illegally charged consumers hundreds and even thousands of dollars for credit repair services of little to no value and told consumers to “invest” their COVID-19 governmental benefits on their unlawful services.
In some cases, the company’s “services” included filing false identity theft reports with the FTC and encouraging consumers to take actions that were unlawful. The FTC asked the court to immediately halt the company’s illegal operations, appoint a receiver, and freeze the defendants’ assets.
The complaint was filed in the U.S. District Court for the Middle District of Florida. The court issued a temporary restraining order with asset freeze on May 3 and scheduled a follow-up hearing for May 12.
In addition to the core credit repair scheme, the defendants also have urged consumers to “invest” pandemic tax benefits into their credit repair schemes. One advertisement used the headline “Free Credit Repair From The Government.”
The defendants are based in Florida and have operated credit repair schemes since at least 2019, the FTC alleges, first using the name Wholesale Tradelines before changing to The Credit Game in 2020. According to the FTC’s complaint, the defendants claim to have brought in more than $15 million in business through their operations.
In its complaint filed against The Credit Game and the Randos, the FTC alleges the defendants’ deceptive tactics violated the FTC Act, the Credit Repair Organizations Act, the Business Opportunity Rule, the Telemarketing Sales Rule, and the COVID-19 Consumer Protection Act.
As an illustration, The Credit Game claimed it could boost a customer’s credit score by hundreds of points in as little as 45 days by “credit piggybacking” and other practices.
In a piggybacking scheme, a consumer seeking to raise his/her credit scores pays to be added as an “authorized user” to a credit card account belonging to someone with higher credit. However, the consumer is an “authorized user” in name only and does not have actual access to the account or line of credit.
“The idea is that they can improve their credit by ‘piggybacking’ on the good credit of a stranger, who gets a fee for letting their account be used for the sham,” an FTC spokesperson explained.
The FTC also alleges that the defendants misled consumers in numerous ways, including lying to consumers about whether their products are legal, whether their products are effective, and whether consumers can get refunds when requested.
The defendants also charged consumers for their credit repair services upfront, often thousands of dollars, using high-pressure sales tactics and failing to give consumers required information before they were pressured to buy. Charging advance fees for credit repair services is illegal.