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FTC Announces Lower Price Cap for Extra Credit Report Copies

The Federal Trade Commission has announced that it is lowering from $11 to $10.50 the maximum amount that consumer reporting agencies are allowed to charge consumers for an extra copy of their credit report. The Commission announced the reduction in the amount from 2009 to 2010 under the Fair Credit Reporting Act, which requires the FTC each year to revise the cap originally set by statute based on the change in the Consumer Price Index. The fee is rounded to the nearest 50 cents.

During this time of economic distress, the FTC reminds consumers that this charge does not apply to the first free copy of their credit report that consumers are entitled to request from each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – once every 12 months through www.annualcreditreport.com. For details, see “Your Access to Free Credit Reports” at ftc.gov/credit. Consumers are also entitled to a free report when a company takes adverse action against them (such as denying an application for credit, insurance, or employment) within 60 days of receiving notice of the action. In addition, consumers are entitled to one free report a year if they are unemployed and plan to look for a job within 60 days; they are on welfare; or their report is inaccurate because of fraud, including identity theft.

The $10.50 charge applies when a consumer who has received a free annual credit report does not otherwise qualify for an additional free report.

The Commission vote to publish a notice in the Federal Register announcing the reduced cap was 4-0. (File No. P075400; staff contact is Clarke W. Brinckerhoff, Bureau of Consumer Protection, 202-326-3208; or Keith B. Anderson, Bureau of Economics, 202-326-3428.)

FTC Continues Crackdown on Mortgage Relief Scams; Three More Defendants Added to Operation Stolen Hope

The Federal Trade Commission, as part of its crackdown on mortgage scams, has charged three more defendants with promoting phony mortgage relief services.

According to court papers filed by the FTC, the three defendants were part of an operation that falsely claimed that in exchange for up-front fees ranging from $299 to $699, it would get consumers’ mortgages modified, lowering their monthly mortgage payments. The defendants also misrepresented themselves as consumers’ mortgage lenders or servicers or their affiliates, in violation of the FTC Act and the Telemarketing Sales Rule. Even though some consumers did receive offers to modify their loans, the offers were not much more affordable than their original payments, the Commission charged. In fact, some of the modification offers required even higher monthly payments.

The FTC added April Botton Krawiecki, her father, Samy Botton, and Attorney Aid, LLC to the list of defendants in one of the operations targeted in the crackdown, known as Operation Stolen Hope. The Commission initially charged Kirkland Young LLC and David Botton (Samy Botton’s son) with deceptively marketing mortgage relief services. A federal court subsequently froze their assets and halted the operation until the case is resolved. (see press release at http://www.ftc.gov/opa/2009/11/stolenhope.shtm)

The Commission vote to file the amended complaint was 4-0. The complaint was filed in the U.S. District Court for the Southern District of Florida. The FTC asks people to report foreclosure rescue and mortgage modification scams to FTC.gov or by calling 1-877-FTC-HELP. The FTC makes those complaints available to federal, state, and local law enforcement through the Consumer Sentinel Network.

The Commission vote to publish a notice in the Federal Register announcing the reduced cap was 4-0. (FTC File No. X100005; the staff contact is Chris M. Couillou, FTC Southeast Region, Atlanta, 404-656-1353.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 57.5.2009.wpd)