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Two companies targeting Spanish-speaking consumers with claims that they could improve consumers’ credit ratings have violated federal laws, according to the Federal Trade Commission. The FTC has asked a federal district court to halt both companies’ illegal business practices.

According to separate FTC complaints, Florida-based Sunshine Credit Repair, Inc. and Service Brokers Associates, Inc. use Spanish and English-language advertising to induce consumers to pay up-front fees for the defendants’ “credit repair” services. The FTC alleges that Sunshine Credit typically charges a $198 fee for its services, while Service Brokers typically charges $300 to $400. Under the Credit Repair Organizations Act (CROA), it is illegal to charge consumers money before performing the promised credit repair services. The FTC also charges that Sunshine Credit deceptively claims it can permanently delete accurate, negative information from consumers’ credit reports.

“When it comes to credit repair, only time, a conscientious effort, and a personal debt repayment plan will improve your credit report,” said Brad Elbein, Director of the FTC’s Southwest Regional Office. “No credit repair company or consumer has the right to remove accurate, current information from a credit report.”

The FTC further alleges that both companies violated other provisions of the CROA. According to the complaints, prior to their signing of a contract, both companies fail to provide consumers with required statements informing them about their rights under federal and state law to dispute inaccurate information themselves and explaining the limitations of credit repair. In addition, the FTC charges that both companies fail to inform consumers they have the right to cancel their contracts without penalty.

According to the FTC, consumers can remove inaccurate information from a credit report themselves – credit repair companies have no greater power to do so. If consumers notice errors on their credit reports, they should contact the credit bureau to dispute that information. The credit bureau will then conduct an investigation and, if the entry on the report is found to be inaccurate, it will be removed. The FTC’s consumer education brochure, Credit Repair: How to Help Yourself, offers advice for consumers looking to go through this process, as well as indicators that a “credit repair” offer may be a scam. The brochure is available at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm.

The FTC alleges that Sunshine Credit and Service Brokers have violated the CROA by: (1) charging consumers money before performing promised services; (2) failing to provide consumers with written statements concerning their credit file rights; and (3) failing to inform consumers of their right to cancel a contract. The FTC further charges that Sunshine Credit violated the CROA and the FTC Act by making deceptive claims about the company’s ability to remove accurate, negative information from consumers’ credit reports.

The FTC has asked the court to halt the companies’ illegal business practices and award consumer redress.

The FTC’s complaint against Sunshine Credit names Sunshine Credit Repair, Inc., and Gabriela Etchevarne as defendants. The complaint against Service Brokers names Service Brokers Associates, Inc. and Daniel Gonzalez as defendants.

The Commission vote authorizing staff to file the complaints was 5-0. The complaints were filed in the U.S. District Court for the Southern District of Florida on January 26, 2005.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the Commission’s complaint are 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. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 032-3200 – Sunshine Credit Repair)
(FTC File No. 032-3201 – Service Brokers Associates, Inc.)

Contact Information

Media Contact:
Jen Schwartzman
Office of Public Affairs
202-326-2674
Staff Contact:
Susan Arthur
FTC Southwest Region
214-979-9370