Markets Wired

Responding to charges by the Federal Trade Commission, a U.S. district court has found a credit repair seller in contempt for violating a previous court order that required him to stop promoting worthless credit repair products and services to consumers. The contempt order finds Rick Lee Crosby, Jr. in civil contempt for violating a permanent injunction against him, requires him to reimburse consumers, and imposes a fine against him for each day he continues to violate the permanent injunction.

Despite a final order issued against Florida-based RCA Credit Services, LLC and its principals Rick Lee Crosby, Jr. and Brady Wellington, the court found that Crosby continued to market and sell credit repair services, including e-books, videos, and counseling sessions advising consumers with poor credit how to improve their credit score by using websites such as www.creditambassador.com and www.legalcredit.com. Also, by referring customers to other credit repair services, he violated the final order’s prohibition against assisting others in offering credit repair.

The contempt order stems from a complaint the FTC filed in October 2008 as part of the agency’s crackdown on scams that target consumers in financial distress. According to the complaint, until they were ordered to stop, RCA, Crosby, and Wellington ran deceptive online advertisements that claimed RCA could “Boost Your Credit Score Into The 700s in as little as 30 days,” and could remove “ANY or ALL Negative Accounts From Your Credit Report.” They further stated that a credit expert would “coach you on ways to remove negative remarks and unpaid debts from your credit report while adding new positive reporting accounts to your credit file.”

RCA Credit charged from $500 to more than $3,000 for its “services” and required at least partial payment up-front. In many instances, the FTC charged, the defendants provided consumers no services at all. The FTC also charged them with violating the Credit Repair Organizations Act by failing to provide, before contracts were signed, a written statement of “Consumer Credit File Rights Under State and Federal Law;” failing to include conspicuous statements in their contracts about consumers’ right to cancel without penalty or obligation within three business days; and failing to provide a written “Notice of Cancellation” form.

On October 15, 2010, after a trial, the court issued an amended final order permanently shutting down RCA. The order bans Crosby and RCA from providing any credit repair products or services, prohibits them from making false credit repair claims, bars certain misrepresentations, and requires them to pay more than $350,000.

The order against Crosby finds him in civil contempt for violating the terms of the court’s final judgment and permanent injunction issued last year. It requires him to pay $7,935 and will allow the FTC to use the money to provide refunds to consumers he defrauded. Finally, the order imposes a $264 fine for each day that Crosby fails to comply with the terms of the amended final order, with the fines continuing to accrue until he has proven to the court that he is complying with its terms.

The civil contempt order was issued on October 5, 2011, by Judge James D. Whittemore of the U.S. District Court for the Middle District of Florida, Tampa Division.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(FTC File No. X090002; Civ. No. 8:09-cv-2062-T-27MAP)
(RCA Credit.final)