Credit Glory FTC court order temporarily halts credit-repair operation

A Credit Glory FTC court order has temporarily halted the credit-repair operation and its associated network, PYMNTS reported, citing the Federal Trade Commission. The agency alleges that the business, 16 related entities and five principals collected nearly $200 million in unlawful upfront and recurring charges from consumers since at least 2016.

The temporary order is not a final finding that the allegations have been proven. PYMNTS reported that the FTC’s complaint accuses the defendants of making misleading claims about credit repair, posing as debt collectors or creditors, taking prohibited advance payments and enrolling consumers in recurring charges without adequate disclosure.

What did the FTC allege Credit Glory did?

According to the FTC allegations reported by PYMNTS, the operation used paid Google search advertisements and websites to reach people seeking information about debts. The advertising allegedly promised that Credit Glory’s services could remove negative entries from credit reports and substantially improve credit scores.

The FTC further alleged that telemarketers sometimes led consumers to believe they had contacted an actual debt collector or creditor. The complaint says the defendants disputed legitimate debts and, in some instances, filed identity-theft reports without the consumer’s knowledge in an effort to improve the consumer’s credit. The agency alleged those actions did not improve consumers’ scores.

The complaint also describes an alleged charging sequence. Telemarketers typically took an initial $1 payment, sometimes saying it was needed for identity verification or a credit-report review, then required a further fee generally running to hundreds of dollars before providing services, according to PYMNTS’s account of the FTC release.

The FTC alleged that consumers also incurred recurring advance fees through negative-option enrollment practices. The agency said recurring fees were not clearly disclosed and that consumers did not provide express informed consent. Some consumers reported continuing charges until they cancelled, while refund requests were routinely denied, according to the allegations.

Who is named in the Credit Glory case?

The defendants include Credit Glory and a network described by the FTC as 17 related companies, as well as Alexander Brola, Liam Emery, Marko Petkovic, Joshua Curtis and David Naylor. The companies named include Credit Glory LLC, incorporated separately in three states, Credit Glory Inc., Credit Sage LLC, Joy Credit Software LLC, Clerk Credit Systems LLC, Clerk Credit Software LLC, Standard Scores LLC, Collection Payments LLC, Collections Dispute LLC, Collections Expert LLC, Collections Support LLC, Credit Cop LLC, Dispute Collection LLC, Glorious Credit LLC and Joyful Credit LLC.

The agency said some of the paid search advertisements targeted military servicemembers with debts involving military-related creditors, including Army & Air Force Exchange Service and USAA.

PYMNTS reported that the complaint alleges violations of the FTC Act, the Credit Repair Organizations Act, the Telemarketing Sales Rule, the Gramm-Leach-Bliley Act, the Restore Online Shoppers’ Confidence Act and the Electronic Fund Transfer Act. The FTC’s vote authorizing the filing was 2-0, and the complaint was filed in the US District Court for the District of Arizona.

Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the agency was pleased that the court had shut down what it called an illegal operation and remained committed to protecting consumers from credit-repair schemes that require upfront fees and fail to deliver promised results, according to PYMNTS.

This story draws on original reporting from PYMNTS.