Credit Identity Defendants Settle FTC Charges

Promoting False Identification Numbers To Create A "New Credit Identity" Is Illegal: FTC

For Release

Sixteen defendants targeted in a law enforcement crackdown on illegal credit repair services have agreed to settle federal charges that the "file segregation" advice and products violated federal law. The charges were brought by the Federal Trade Commission or the United States Department of Justice at the FTC's request. The settlements will provide consumer redress for victims of the scam; bar future violations of the Credit Repair Organizations Act; bar deceptive claims about file segregation -- including claims that it is legal -- and require that the defendants notify their victims that using a false identification number to apply for credit is a felony.

The defendants used the Internet and other media to claim they could help consumers obtain new credit histories by obtaining new identification numbers through a practice known as file segregation. The firms sold instructions about how consumers could substitute federally-issued, nine-digit employee identification numbers or taxpayer identification numbers for social security numbers and use them illegally to build new credit profiles that would allow them to get credit they may be denied based on their real credit histories. Many of their ads claimed the practice was legal.

Settlement of the FTC charges will bar the defendants from violating provisions of the Credit Repair Organizations Act that prohibit charging or accepting payment for credit repair services before the services are provided. In addition, the settlements would bar them from representing that other government identification numbers can be lawfully used to conceal actual credit histories and from misrepresenting material facts concerning credit-related products or any other product or service.

The defendants would be required to notify their victims of the illegal nature of their products and would be barred from selling their customer lists. Thirteen of the settlements provide for full consumer redress. Financial declarations filed by three defendants indicate an inability to provide redress. Their settlements contain provisions to allow reopening of the issue if defendants are found to have misrepresented their inability to pay. All the settlements contain record keeping provisions to allow the FTC to monitor compliance.

The settlements of the "Operation New ID - Bad IDea" sweep are with Mehmet Akca (FTC File No. X990018); Frank Muniz (FTC File No. X990020); LSQ International (FTC File No. X990024), Standard Business Services (FTC File No. X990021); Pro Se Publications (FTC File No. X990023); Ross Sanford Leiss (FTC File No. X990026); Michael Lyons (X990027); Edward Lane (FTC File No. X990032); All About Communications (FTC File No. X990030); Express Financial Planning (FTC File No. X990034); Financial Publishers of America (FTC File No X990033); New Start (FTC File No. X990028); Frederick P. Ray (FTC File No. X990066); Internet Publications (FTC File No. X990064); P.M.. Enterprises (FTC File No. X990047); Fresh Start (FTC File No. X990044).

The Commission votes to accept the proposed stipulated final judgments were 4-0.

NOTE: Stipulated final judgments are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the complaints and stipulated final judgments and orders will be available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

Contact Information

Media Contact:
Claudia Bourne Farrell
Office of Public Affairs
202-326-2181

Mehmet Akca,
U.S. District Court for the District of Colorado
Civil Action No. 99-S-204
Staff Contact: Janice Charter 415-356-5270

Frank Muniz,
U.S. District Court for the District of Florida, Tallahassee Division
Civil Action No. 4:99cv34-RH
Staff Contact: C. Steven Baker, 312-960-5634

LSQ International, Inc.,
U. S. District Court for the Southern District of Florida, Miami Division
Civil Action No. 99-302 CIV-MORENO
Staff Contact: C. Steven Baker, 312-960-5634

Express Financial Planning,
U.S. District Court for the Southern District of Florida,
Civil Action No. 99-6103-SIV-Ryskamp
Staff Contact: C. Steven Baker, 312-960-5634

Financial Publishers of America,
U.S. District Court for the District of Minnesota
Civil Action No. 99-160 (RHK/JMM)
Staff Contact: C. Steven Baker, 312-960-5634

Frederick P. Ray
U.S. District Court for the Central District of California, Western Division
Civil Action No. 99-04703SVW (RNBx)
Staff Contact: C. Steven Baker, 312-960-5634

Internet Publications
U. S. District Court for the Central District of California, Western Division
Civil Action No. 99-04706JSL (BQRx)
Staff Contact: C. Steven Baker, 312-960-5634

Pro Se Publications,
U. S. District Court for the Northeastern District of Texas, Dallas Division
Civil Action No. 3-99CV0211-G
Staff Contact: Thomas B. Carter, 214-979-9372

Standard Business Services,
U.S. District Court for the Northern District of Texas
Civil Action No. 3-99-CV0214-L
Staff Contact: Thomas B. Carter, 214-979-9372

Fresh Start
U. S. District Court for the Southern District of Texas, Houston Division
Civil Action No. H-99-1326
Staff Contact: Thomas B. Carter, 214-979-9372

Edward Lane,
U. S. District Court for the Eastern District of Washington
Civil Action No. CY-99-3005-WFN
Staff Contact: Eleanor Durham, 206-220-4476

P.M. Enterprises
U.S. District Court for the Western District of Washington at Tacoma
Civil Action No. 99-5236-FDB
Staff Contact: Eleanor Durham, 206-220-4476

All About Communications,
U.S. District Court for the Southern District of Florida
Civil Action No. 99-6122-CIV-Ferguson
Staff Contact: Andrea Foster, 404-656-1356

Lyons Publishing,
U.S. District Court for the Western District of New York
Civil Action No. 99-CV-6049T
Staff Contact: Robin E. Eichen, 212-607-2803

New Start,
U. S. District Court for the District of Maryland, Northern Division
Civil Action No. WMN-99-251
Staff Contact: Allen W. Hile, 202-326-3122

Ross Sanford Leiss
U. S. District Court for the Eastern District of Virginia, Alexandria Division
Civil Action No. 99-102-A
Staff Contact: Allen W. Hile, 202-326-3122