UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

MARK A. REIBER, d/b/a CREDIT REPORT COUNSELORS,

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 1395(a). Venue in this Court is proper under S.D. Ohio L.R. 3.3.

DEFENDANT

4. Defendant Mark A. Reiber is an individual with his office and principal place of business located at 10979 Reed Hartman Hwy, Suite 107, Cincinnati, Ohio 45242. Defendant Reiber does business as Credit Report Counselors (“CRC”). He resides at 11725 Darbyshire St., Loveland, Ohio 45140. Defendant Reiber resides or 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. Consumers have contacted Defendant by telephone and have been told by Defendant’s representatives that Defendant can remove bankruptcies, liens, judgments, charge offs, late payments, foreclosures, repossessions, and other negative information from consumers’ credit reports. Defendant has made such representations to consumers even where such negative information was accurate and not obsolete.

8. Before providing any of the promised services, Defendant’s representatives request and require at least partial payment for these services. The Defendant has usually charged $390 or more for these services. Further, Defendant requires a payment of at least $125 before providing the promised services.

THE CREDIT REPAIR ORGANIZATIONS ACT

9. 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.

10. The purposes of the Credit Repair Organizations Act, according to Congress, are:

(1) to ensure that prospective buyers of the services of credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services; and (2) to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. 15 U.S.C. 1679(b).

11. 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 the 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

12. In connection with his 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

13. In connection with his 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 untrue or misleading representations to consumers, including the 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. Defendant has made this representation to consumers even where such negative information was accurate and not obsolete.

14. By making untrue or misleading representations to consumers, Defendant has violated 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 his services, including the 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. Defendant has made such representations to consumers even where such negative information was accurate and not obsolete.

17. In truth and fact, Defendant cannot 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, even where such information is accurate and not obsolete.

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 the 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 the 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:

(1) Enter judgment against the Defendant in favor of Plaintiff for each and every violation alleged in this complaint;

(2) Award Plaintiff monetary penalties from the Defendant for each and every violation of the Credit Repair Organizations Act;

(3) Award such relief as the Court finds necessary to redress injury to consumers resulting from the Defendant’s violations of the Credit Repair Organizations Act and the FTC Act, including but not limited to, rescission of contracts, restitution, consumer redress, and disgorgement of unlawfully obtained monies;

(4) Permanently enjoin the Defendant from further violations of the Credit Repair Organizations Act and the FTC Act;

(5) Order the Defendant to pay the costs of this action; and

(6) Award Plaintiff such additional relief as the Court may deem just and proper.

DATED: March 4, 1998

Of Counsel: FOR THE UNITED STATES OF AMERICA:
C. STEVEN BAKER
Regional Director
Chicago Regional Office
55 E. Monroe St., Suite 1860
Chicago, Illinois 60603
FRANK W. HUNGER
Assistant Attorney General
Civil Division
U.S. Department of Justice

SHARON J. ZEALEY
United States Attorney

GERALD F. KAMINSKI (Bar No. 0012532)
Assistant United States Attorney
Room 220
Potter Stewart U.S. Courthouse
Fifth & Walnut Streets
Cincinnati, OH 45202
(513) 684-3711
(Local Counsel)

STEVEN N. GERSTEN
Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
Washington, D.C. 20530
(202) 307-0065
(Trial Counsel)