DEBRA A. VALENTINE
General Counsel

RUSSELL W. DAMTOFT
CHARULATA B. PAGAR
Federal Trade Commission
55 East Monroe Street, Suite 1860
Chicago, Illinois 60603
(312) 960-5634

MICHAEL A. JOHNS
United States Attorney

CHARLES M. STEELE
Assistant United States Attorney
United States Courthouse and Federal Building
230 North First Avenue
Phoenix, Arizona 85025
State Bar. No. 014266
(602) 514-7500

Attorneys for Plaintiff

FEDERAL TRADE COMMISSION

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

FEDERAL TRADE COMMISSION,

Plaintiff,

v.

DIXIE W. COOLEY, individually and doing business as DWC,

Defendant.

Civil Action No.

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF

Plaintiff, the Federal Trade Commission ("Commission"), by its undersigned attorneys, alleges as follows:

1. The Commission brings this action under Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 53(b), to obtain preliminary and permanent injunctive relief, restitution, rescission, disgorgement and other equitable relief for defendant’s deceptive acts or practices in connection with the sale and offering for sale of credit repair services in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

JURISDICTION AND VENUE

2. This Court has jurisdiction of this matter pursuant to 28 U.S.C. 1331, 1337(a), and 1345, and 15 U.S.C. 53(b).

3. Venue in this district is proper under 28 U.S.C. 1391(b) and 15 U.S.C. 53(b).

THE PARTIES

4. Plaintiff, the Federal Trade Commission, is an independent agency of the United States Government created by statute. 15 U.S.C. 41 et seq. The Commission is charged, inter alia, with enforcement of Section 5(a) of the FTC Act, 15 U.S.C. 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission is authorized to initiate federal district court proceedings, by its own attorneys, to enjoin violations of the FTC Act in order to secure such equitable relief, including consumer redress, as may be appropriate in each case. 15 U.S.C. 53(b).

5. Defendant Dixie W. Cooley is an individual doing business as DWC. Ms. Cooley resides at 7009 E. Acoma Dr., Apt. 1019, Scottsdale, Arizona 85254. Ms. Cooley and DWC reside and transact or have transacted business in this District. At all times material to this complaint, acting alone or in concert with others, defendant has formulated, directed, controlled or participated in the acts and practices of DWC, including the acts and practices set forth in this complaint.

COMMERCE

6. At all times material to this complaint, defendant’s course of business, including the acts and practices alleged herein, have been in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. 44.

DEFENDANT’S COURSE OF CONDUCT

7. Since at least 1997, defendant has advertised, promoted, offered for sale, and sold credit repair services to consumers through the use of unsolicited commercial electronic mail messages ("e-mail"), a technique popularly referred to as "spamming."

8. Defendant has claimed that she can improve consumers’ credit histories, credit records, or credit ratings by assisting them in establishing new credit profiles with credit bureaus by using a taxpayer identification number ("TIN") or alternate social security number in place of their social security number for banking and credit purposes. Defendant has further claimed that use of the TIN in this manner is legal.

9. Typical and illustrative of defendant’s claims about their credit repair services are the following:

a. [E-mail subject line]:

New Credit File in 1 Month----FOR REAL

[E-mail text]: CREDIT PROBLEMS----YOU CAN GET A NEW **SOCIAL SECURITY NUMBER**

Are you one of the millions of Americans with less than perfect credit??

Are you aware that you can receive a 2nd Social Security Number legally???

Would you like to learn how to get bad marks taken off your present credit report????

If you answered yes to any of the above questions then you need this program!!!!! We will teach you how to have a NEW CREDIT FILE LEGALLY!!!!

This unique and virtually unknown program is 100% legal, and can work every time!!!

. . . .

Please keep in mind that it does not matter what you have on your past credit. This program will help you even if you have such things as Judgements [sic], Charge offs, and other negative credit problems!!!!! This program will even show you how to REPAIR your old credit file, WHILE you enjoy your AAA credit, in as little as 30 days.

b. [E-mail subject line]:

This WILL Solve Your Credit Problems--- GUARANTEED!!!

[E-mail text]: CREDIT PROBLEMS----YOU CAN GET A NEW SOCIAL SECURITY NUMBER!!!

Bad Credit? Judgements? [sic] Slow Pay? THIS IS THE PROGRAM FOR YOU!

Learn how to open a seperate [sic] Credit File. This unique and virtually unknown program is LEGAL and can work for you EVERY TIME.

. . . .

Remember that it does not matter what your credit past is.

. . . .

We have helped literally 1000's of people like you once again enjoy AAA Credit at our regular price of $79.

10. Before providing any of the promised services, defendant requests and requires at least partial payment for these services. Defendant has charged $19.95 or more for these services.

DEFENDANT’S VIOLATIONS OF SECTION 5 OF THE FTC ACT

11. 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.”

12. Misrepresentations of material fact constitute unfair or deceptive acts or practices prohibited by Section 5(a) of the FTC Act.

COUNT ONE

13. In connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair services, to induce consumers to purchase her services defendant has, directly or by implication, made representations that defendant can legally alter consumers’ identification to conceal adverse credit information from consumers’ credit records, credit histories, or credit ratings by obtaining EINs, alternate social security numbers, or TINs for consumers to use, instead of their social security numbers, for credit purposes.

14. In truth and in fact, defendant cannot legally alter consumers’ identifications to conceal adverse credit information from consumers’ credit records, credit histories, or credit ratings by obtaining EINs, alternate social security numbers, or TINs for consumers and having consumers use the EINs, alternate social security numbers, or TINs instead of their social security numbers.

15. Therefore, the representation set forth in paragraph 13 is false and misleading and constitutes a deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

CONSUMER INJURY

16. Consumers have suffered or are likely to suffer substantial monetary loss as a result of defendant’s unlawful acts or practices. Absent injunctive relief by this Court, defendant is likely to continue to injure consumers and harm the public interest.

THIS COURT'S POWER TO GRANT RELIEF

17. Section 13(b) of the FTC Act, 15 U.S.C. 53(b), empowers this Court to issue a permanent injunction against defendant’s violations of the FTC Act and, in the exercise of its equitable jurisdiction, to order such ancillary relief as preliminary injunction, rescission, restitution, disgorgement of profits resulting from defendant’s unlawful acts or practices, and other remedial measures.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff requests that this Court, as authorized by Section 13(b) of the FTC Act, 15 U.S.C. 53(b), and pursuant to its own equitable powers:

(a) Award plaintiff such preliminary injunctive and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action and to preserve the possibility of effective final relief;

(b) Permanently enjoin defendants from violating the FTC Act;

(c) Award such relief as the Court finds necessary to redress injury to consumers resulting from the defendants’ violations of the FTC Act, including but not limited to, rescission of contracts, the refund of monies paid, and the disgorgement of ill-gotten monies; and

(d) Award plaintiff the costs of bringing this action, as well as such other and additional relief as the Court may determine to be just and proper.

Respectfully Submitted,

DEBRA VALENTINE
General Counsel

DATED: ____________________________________________

RUSSELL W. DAMTOFT
Federal Trade Commission
55 East Monroe Street, Suite 1860
Chicago, IL 60603
(312) 960-5634

MICHAEL A. JOHNS
United States Attorney

CHARLES M. STEELE
Assistant United States Attorney
United States Courthouse and Federal Building
230 North First Avenue
Phoenix, Arizona 85025
State Bar. No. 014266
(602) 514-7500