UNITED STATES DISTRICT COURT UNITED STATES OF AMERICA, Plaintiff, v. ANDREA L. CHRISTIE, d/b/a B & J ENTERPRISES, LTD., AAA CREDIT ASSOCIATION, AAA CREDIT SERVICES, and A CREDIT SERVICES Defendant. CIVIL NO. COMPLAINT FOR CIVIL PENALTIES, INJUNCTIVE, AND OTHER RELIEF Plaintiff, the United States of America, acting upon notification and authorization to the Attorney General by the Federal Trade Commission (“Commission”), for its complaint alleges that: 1. Plaintiff brings this action under Sections 5(a)(1), 5(m)(1)(A), 13(b), 16(a), and 19 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(a)(1), 45 (m)(1)(A), 53(b), 56(a), and 57b, and Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C. § 1679h(b), to obtain monetary civil penalties, consumer redress and injunctive and other relief for Defendant’s violations of the Credit Repair Organizations Act, 15 U.S.C. § 1679-1679j; and consumer redress and injunctive and other relief for Defendant’s violations of Section 5(a)(1) of the FTC Act, 15 U.S.C. § 45(a)(1). JURISDICTION AND VENUE 2. This Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1331, 1337(a), 1345, 1355 and pursuant to 15 U.S.C. §§ 45(m)(1)(A), 53(b), 56(a), 57b, and 1679h(b)(2). This action arises under 15 U.S.C. §§ 45(a)(1) and 1679h(b). 3. Venue in this district is proper under 15 U.S.C. § 53(b) and under 28 U.S.C. § 1391(b) and (c) and 1395(a). DEFENDANT 4. Defendant Andrea L. Christie is an individual with her office and principal place of business located at 3025 Ashley Phosphate Rd., North Charleston, South Carolina 29418. Defendant Christie does business as B & J Enterprises, Ltd., AAA Credit Association, AAA Credit Services, and A Credit Services. Defendant Christie transacts business in this District. COMMERCE 5. At all times relevant to this complaint, Defendant has maintained a substantial course of trade in selling credit repair services, in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. DEFENDANT’S BUSINESS PRACTICES 6. Defendant has telemarketed, advertised, promoted, offered for sale, and sold credit repair services to consumers in the United States. 7. Defendant has offered services to remove negative information from, or improve, consumers’ credit histories, credit records, and credit ratings, including marginal bad credit, late payments, medical bills, repossessions, foreclosures, charge-offs, bankruptcies, late payments, judgments, liens, and tax levies. Consumers have contacted Defendant by telephone and have been told by Defendant’s representatives that Defendant can remove bankruptcies. Defendants have made such representations to consumers even where such negative information was accurate and not obsolete. 8. Defendant makes or has made the following and similar claims about her credit repair services:
9. Before providing any of the promised services, Defendant’s representatives request and require at least partial payment for these services. Defendant has usually charged an initial fee of $100 to $200 for these services. THE CREDIT REPAIR ORGANIZATIONS ACT 10. The Credit Repair Organizations Act, signed by the President on September 30, 1996, took effect on April 1, 1997, and has since that date remained in full force and effect. 11. The purposes of the Credit Repair Organizations Act, according to Congress, are:
12. Pursuant to Section 410(b)(1) of the Credit Repair Organizations Act, 15 U.S.C. § 1679h(b)(1), any violation of any requirement or prohibition of the Credit Repair Organizations Act constitutes an unfair or deceptive act or practice in commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). Pursuant to Section 410(b)(2) of the Credit Repair Organizations Act, 15 U.S.C. § 1679h(b)(2), all functions and powers of the FTC under the FTC Act are available to the Commission to enforce compliance with Credit Repair Organizations Act in the same manner as if the violation had been a violation of any FTC trade regulation rule. VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT COUNT ONE 13. In connection with her operation as a credit repair organization, as that term is defined in Section 403(3) of the Credit Repair Organizations Act, 15 U.S.C. § 1679a(3), Defendant has charged or received money or other valuable consideration for the performance of services that Defendant has agreed to perform for consumers before such services were fully performed, thereby violating Section 404(b) of the Credit Repair Organizations Act, 15 U.S.C. § 1679b(b). COUNT TWO 14. In connection with her operation as a credit repair organization, as that term is defined in Section 403(3) of the Credit Repair Organizations Act, 15 U.S.C. § 1679a(3), Defendant has made the untrue or misleading representation that Defendant can improve substantially most consumers’ credit reports or profiles by permanently removing bankruptcies, liens, judgments, charge-offs, late payments, foreclosures, repossessions, and other negative information from consumers’ credit reports. Defendants have made such representations to consumers even where such information is accurate and not obsolete, thereby violating Section 404(a)(3) of the Credit Repair Organizations Act, 15 U.S.C. § 1679b(a)(3). UNFAIR OR DECEPTIVE ACTS OR PRACTICES IN VIOLATION OF THE FTC ACT 15. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), provides that "unfair or deceptive acts or practices in or affecting commerce are hereby declared unlawful." VIOLATIONS OF THE FTC ACT COUNT THREE 16. In connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair services, Defendant has made untrue or misleading statements to induce consumers to purchase her services, including, but not limited to, the representation that Defendant can improve substantially most consumers’ credit reports or profiles by permanently removing bankruptcies, charge-offs, late payments, and other negative information from consumers' credit reports. Defendant has made such representations to consumers, even where such negative information is accurate and not obsolete. 17. In truth and fact, Defendant cannot improve substantially most consumers’ credit reports or profiles by permanently removing bankruptcies, charge-offs, late payments, and other negative information from consumers' credit reports. In truth and fact, where such bankruptcies, charge-offs, late payments, and other negative information is accurate and not obsolete, such negative information on consumers' credit reports or profiles can usually be verified and therefore cannot be permanently removed by the Defendant. 18. Defendant has thereby violated Section 5(a) of the FTC Act. 15 U.S.C. § 45(a). CIVIL PENALTIES, CONSUMER REDRESS AND INJUNCTION 19. Defendant has violated the Credit Repair Organizations Act as described above with knowledge as set forth in Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A). 20. Each sale or attempted sale, since the effective date of the Credit Repair Organizations Act, of credit repair services in which Defendant has violated the Credit Repair Organizations Act in one or more of the ways described above constitutes a separate violation for which Plaintiff seeks monetary civil penalties. 21. Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A), authorizes the Court to award monetary civil penalties of not more than $10,000 for each violation of the Credit Repair Organizations Act. Section 4 of the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as amended, and as implemented by 16 C.F.R. § 1.98(d) (1997), authorizes the Court to award monetary civil penalties of not more than $11,000 for each violation of the Rule that occurs after November 20, 1996. 22. Under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), this Court is authorized to issue a permanent injunction against Defendant’s violating the FTC Act and Credit Repair Organizations Act, as well as such ancillary relief as preliminary injunction, rescission, restitution, disgorgement of profits resulting from Defendant’s unlawful acts or practices, and other remedial measures. 23. Section 19 of the FTC Act, 15 U.S.C. § 57b, authorizes the Court to award such relief as is necessary to redress the injury to consumers or others resulting from Defendant’s violation of the Credit Repair Organizations Act. PRAYER WHEREFORE, Plaintiff requests that this Court, pursuant to 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 53(b), 57b, and 1679h(b), and the Court’s own equity powers:
DATED:
J. RENÉ JOSEY By: Joseph P. Griffith, Jr. DOUGLAS ROSS |