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The Federal Trade Commission is mailing 831 checks for $13.70 each to consumers who allegedly were charged an illegal advance fee for a CD-ROM with information about credit reporting and instructions that supposedly taught consumers how to repair their credit.

In May 2012, third-party debt collector Luebke Baker & Associates, owner Kevin Luebke, and other defendants agreed to settle FTC charges.  According to the agency’s complaint, the defendants marketed a credit repair CD titled “Credit Solutions,” allegedly collecting an up-front fee before providing any goods or services, in violation of the FTC’s Telemarketing Sales Rule, which bans companies selling credit repair goods and services from imposing advance fees.  The settlement required the defendants to pay for refunds to all consumers who paid an advance fee to buy the Credit Solutions CD.  The defendants also allegedly tried to collect magazine subscription debts they knew or should have known were not valid, used false caller ID posing as Ed McMahon, and claimed to be attorneys or that they were calling from a law firm.  The FTC settlement order prohibits this deceptive conduct.

An administrator hired by the FTC will mail the checks to consumers who were charged an advance fee for the Credit Solutions CD.  Consumers who have questions about their check should call the redress administrator, BMC Group, toll free at 1-866-332-8795.  The FTC never requires consumers to pay money or provide information before redress checks can be cashed.  For general information about the FTC’s redress program, visit the FTC’s refunds website. 

Consumers will receive their checks beginning September 28, and must cash them by November 27, 2012.

For consumer information about credit repair, see Money Matters: Credit Repair.  For consumer information about dealing with debt collectors, see Debt Collection FAQs: A Guide for Consumers.

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, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.