UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON

FEDERAL TRADE COMMISSION, Plaintiff,

v.

CRA CHAMPION CREDIT, INC., a Washington corporation,

CRA FINANCIAL SERVICES, INC., a Washington corporation, and

AVSHALOM HAZAN, individually and as an officer of CRA Champion Credit, Inc., and CRA Financial Services, Inc., and

JOEL YOUNKER, individually and as a former officer of CRA Champion Credit, Inc., Defendants.




Civ. No.

STIPULATED FINAL JUDGMENT AND ORDER AS TO JOEL YOUNKER

Plaintiff, the Federal Trade Commission ("Commission"), has filed a complaint for a permanent injunction and other relief pursuant to Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.   53(b) and 57b, and Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C.  1679h(b), alleging that defendant Joel Younker has violated Section 5(a) of the FTC Act, 15 U.S.C.  45(a), and the Credit Repair Organizations Act, 15 U.S.C.  1679 et seq.

Plaintiff and defendant, by and through their respective counsel, have agreed to entry of this Stipulated Final Judgment and Order ("Order") by this Court, without trial or adjudication of any issue of fact or law.

NOW THEREFORE, plaintiff and defendant having requested the Court to enter this Order, it is therefore ORDERED, ADJUDGED, AND DECREED as follows:

FINDINGS

A. This Court has jurisdiction of defendant and the subject matter of this action and the parties consenting hereto;

B. The Commission has the authority under Sections 13(b) and 19 of the FTC Act, 15 U.S.C.   53(b) and 57b, and Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C.  1679h(b), to seek the relief it has requested;

C. The Complaint states a claim upon which relief may be granted under Sections 5(a) and 13(b) of the FTC Act, 15 U.S.C.  45(a) and 53(b), and Section 410(b) of the Credit Repair Organizations Act, 15 U.S.C.  1679h(b);

D. Defendant has waived all rights to seek judicial review or otherwise challenge or contest the validity of this Order;

E. This judgment does not constitute and shall not be interpreted to constitute either an admission by defendant or a finding of the Court that defendant has engaged in violations of the FTC Act or the Credit Repair Organizations Act; and

F. Entry of this Order is in the public interest.

DEFINITIONS

For purposes of this Order, the following definitions shall apply:

A. "Credit repair organization" means any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or represent that such person can or will sell, provide, or perform) any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of (1) improving any consumer's credit record, credit history, or credit rating; or (2) providing advice or assistance to any consumer with regard to any activity or service the purpose of which is to improve a consumer's credit record, credit history, or credit rating;
 
B. "Credit repair service " means any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of (1) improving any consumer's credit record, credit history, or credit rating; or (2) providing advice or assistance to any consumer with regard to any activity or service the purpose of which is to improve a consumer's credit record, credit history, or credit rating;
 
C. "Defendant" means Joel Younker, his successors and assigns, and, as applicable, his directors, officers, agents, employees, sales persons, corporations, subsidiaries, affiliates, attorneys, and other persons or entities directly or indirectly under his control or under common control with him, and all other persons or entities in active concert or participation with him, who receive actual notice of this Order by personal service, facsimile or otherwise, whether acting directly or through any business, entity, corporation, subsidiary, division, or other device;
D. "Material" means likely to affect a person's choice of, or
conduct regarding, goods or services; and
 
E. "Person" means a natural person, organization or other legal entity, including a corporation, partnership, proprietorship, association, cooperative, government or governmental subdivision or agency, or any other group or combination acting as an entity.

ORDER

I.

IT IS THEREFORE ORDERED that defendant, in connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair services, is hereby permanently restrained and enjoined from:

A. Misrepresenting, orally or in writing, directly or by implication, any material fact, including, but not limited to, representing that he or any person can improve any consumer's credit record, credit history or credit rating by removing or obtaining removal of negative information that is accurate and not obsolete from such credit record, credit history, or credit rating; and
 
B. Violating any provision of the Credit Repair Organizations Act, 15 U.S.C.  1679 et seq., as presently enacted or as it may hereinafter be amended, including, but not limited to:
 
1. Making or using any untrue or misleading representation of the services of a credit repair organization, as prohibited by Section 404(a)(3) of the Credit Repair Organizations Act, 15 U.S.C.  1679b(a)(3); and
 
2. Charging or receiving any money or other valuable consideration for the performance of any credit repair service before such service is fully performed, as prohibited by Section 404(b) of the Credit Repair Organizations Act, 15 U.S.C.  1679b(b).

II.

IT IS FURTHER ORDERED that defendant, whether acting directly or through any business, entity, corporation, subsidiary, division or other device, is permanently enjoined from engaging in any credit repair service unless he first obtains a performance bond in the principal amount of $50,000.

A. Each bond shall be conditioned upon his compliance with Section 5 of the FTC Act, 15 U.S.C.  45, with the Credit Repair Organizations Act, 15 U.S.C.  1679 et seq., as presently enacted or as it may hereinafter be amended, and with the provisions of this Order. Each bond shall be deemed continuous and remain in full force and effect as long as defendant continues to engage in any credit repair services, and for at least three (3) years after defendant has ceased to engage in any such activity. Each bond shall cite this Order as the subject matter of the bond, and shall provide surety thereunder against financial loss due, in whole or in part, to any violation of Section 5 of the FTC Act, to any violation of the Credit Repair Organizations Act, 15 U.S.C.  1679 et seq., as presently enacted or as it may hereinafter be amended, to any violation of the provisions of this Order, or to any other cause attributable to defendant's engaging or participating in any credit repair service;
 
B. Each bond shall be an insurance agreement providing surety for financial loss issued by a surety company that is admitted to conduct surety business in each of the states in which defendant does business and that holds a Federal Certificate of Authority As Acceptable Surety On Federal Bond and Reinsuring. Defendant shall be deemed to be doing business in each state in which he, or any entity through which he is engaging in any credit repair service, maintains an office or contacts any consumer. Such bond shall be in favor of both (a) the FTC for the benefit of consumers injured due, in whole or in part, to any violation of Section 5 of the FTC Act, to any violation of the Credit Repair Organizations Act, 15 U.S.C.  1679 et seq., as presently enacted or as it may hereinafter be amended, to any violation of the provisions of this Order, or to any other cause attributable to any defendant's engaging or participating in any credit repair service, and (b) any consumer so injured. Each bond shall be executed in favor of the FTC or in favor of any injured consumer if the FTC or the consumer demonstrates to this Court, or a Magistrate thereof, by a preponderance of the evidence, that defendant violated any condition of the bond;
 
C. Defendant shall not disclose the existence of any bond to any consumer or other purchaser or prospective purchaser of any credit repair service or product without simultaneously making the following disclosure:
 
THIS BOND IS REQUIRED BY ORDER OF THE U.S. DISTRICT COURT IN SETTLEMENT OF CHARGES THAT DEFENDANT ENGAGED IN FALSE AND MISLEADING REPRESENTATIONS IN THE PROMOTION AND SALE OF CREDIT REPAIR SERVICES .
 
The required disclosure shall be set forth in a clear and conspicuous manner, enclosed in a box containing only the required disclosure, separated from all other text on the page, in 100% black ink against a light background, in print at least as large as that of any other text on the page;
 
D. Defendant shall provide a copy of each bond required by this Paragraph to the Regional Director, Federal Trade Commission, 915 Second Avenue, Suite 2896, Seattle, Washington, 98174, at least ten (10) days prior to the commencement of any activity or business for which the bond is required; and
 
E. The bond required by this Paragraph shall be in addition to, and not in lieu of, any other bond required by law.

III.

IT IS FURTHER ORDERED that defendant, within three (3) business days after the date of entry of this Order, shall submit to the Commission a sworn statement, in the form shown in Attachment A to this Order, that reaffirms and attests to the truthfulness, accuracy, and completeness of the defendant's financial statement that was executed on February 23, 1998, (designated the "Financial Statement"). The Commission's agreement to this Order is expressly premised upon the truthfulness, accuracy, and completeness of defendant's financial condition as represented in the Financial Statement referenced above, which contains material information upon which the Commission relied in negotiating and agreeing to the terms of this Order. If, upon motion by the Commission, this Court finds that defendant failed to file the sworn statement required by this Paragraph, or filed a Financial Statement that failed to disclose any material asset, or materially misrepresented the value of any asset, or made any other material misrepresentation in or omission from the Financial Statement, the judgment herein shall be reopened for the purpose of determining an appropriate amount for defendant to pay as redress; provided, however, that in all other respects, this Order shall remain in full force and effect unless otherwise ordered by this Court.

IV.

IT IS FURTHER ORDERED that defendant, for a period of five (5) years from the date of entry of this Order, shall maintain all records and documents in connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair services necessary to demonstrate his compliance with the requirements of this Order, including, but not limited to the following:

A. All printed advertisements and promotional materials that contain any representation related to credit repair services;

B. All audio and video tapes used to advertise or promote credit repair services, and a printed transcript for each such audio and video tape;

C. All advertising and promotional materials made available through any "fax on demand" or fax-back service that contain any representation related to credit repair services;

D. All advertising and promotional or commercial items posted in any Internet news group, on the World Wide Web, on any electronic bulletin board system, in any online interactive conversational space or chat room, in the classified advertising section of any online service, or in any other location accessible by modem communications that contain any representation related to credit repair services. Retained records or documents shall indicate the online location where each such item was posted;

E. Electronic copies, in HTML format, of all advertising and promotional material made available on the World Wide Web that contains any representation related to credit repair services, together with copies of all graphics files, audio scripts, and other computer files used in presenting such information on the World Wide Web. The records shall include the Internet address (URL) of the site, as well as any other information needed to gain access to the site;

F. All materials that were relied upon in connection with each representation related to credit repair services covered by Paragraph I of this Order;

G. The basis relied upon for any covered credit repair services representation, including complaints and other communications with consumers or with governmental or consumer protection organizations;

H. A list that identifies all purchasers of credit repair services, and includes the name, address, and telephone number of each purchaser;

I. Each contract, agreement, and statement of policies or procedures used in connection with sales of credit repair services; and

J. All complaints and refund requests received in connection with sales of credit repair services.

V.

IT IS FURTHER ORDERED that defendant, for a period of two (2) years from the date of entry of this Order, and upon reasonable written notice from the Commission, shall permit duly authorized representatives of the Commission, without restraint or interference from defendant:

A. Access during normal business hours to any office or facility owned, managed, or controlled by defendant, or the successor or assign of defendant, to inspect and copy any document that relates in any way to credit repair services or credit repair organizations; and
 
B. To interview directors, officers, and employees (including consultants, independent contractors, and the like) of any business entity that is owned, managed, or controlled, in whole or in part, by defendant, regarding any matter that relates in any way to credit repair services or credit repair organizations.

The Commission may otherwise monitor defendant's compliance with this Order by all lawful means available, including, but not limited to, the use of investigators posing as consumers, potential investors, suppliers and other entities.

VI.

IT IS FURTHER ORDERED that defendant, for a period of five (5) years after the date of entry of this Order, in connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair services, shall:

A. Within ten (10) days from the date of entry of this Order, provide to each current principal, officer, director, employee, agent, representative, or other person who is engaged in selling or offering to sell credit repair services in active concert or participation with defendant a copy of this Order and obtain from each such person a signed, dated statement, in writing, acknowledging receipt of such copy. The statement shall be maintained and made available to the Commission for inspection and copying upon request until five (5) years from the date of entry of this Order; and
 
B. Within ten (10) days of the first day on which any future principal, officer, director, employee, agent, representative, or other person is engaged in selling or offering to sell credit repair services in active concert or participation with defendant provide to him or her a copy of this Order and obtain from each such person a signed, dated statement, in writing, acknowledging receipt of such copy. The statement shall be maintained and made available to the Commission for inspection and copying upon request until five (5) years from the date of entry of this Order.

VII.

IT IS FURTHER ORDERED that, for a period of two (2) years from the date of entry of this Order defendant shall notify the Commission in writing, within fourteen (14) days, of any change in his present business or employment or of his affiliation with any new business or employment. Each such notice shall include the defendant's then-current business address and telephone number, current home address, and a statement of the nature of the new business or employment along with a description of his interest, duties and responsibilities in such business or employment.

VIII.

IT IS FURTHER ORDERED that defendant, within 120 days after the date of entry of this Order, shall file with the Commission a written report setting forth in detail the manner and form in which he has complied with this Order.

IX.

IT IS FURTHER ORDERED that all notices and reports required of defendant by this Order shall be made to the following address:

Regional Director
Federal Trade Commission
915 Second Avenue, Suite 2896
Seattle, Washington 98174

X.

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes, including construction, modification, and enforcement of this Order.

JUDGMENT IS THEREFORE ENTERED under the terms and conditions recited above, each party to bear its own costs and attorney fees incurred in connection with this action.

IT IS SO ORDERED, this _____ day of _____________, 1998.

UNITED STATES DISTRICT JUDGE

The parties hereby stipulate and agree to the terms and conditions set forth above and consent to entry of this Stipulated Final Judgment and Order. Defendant waives any rights that may arise under the Equal Access to Justice Act, 28 U.S.C.  2412.

FOR PLAINTIFF FEDERAL TRADE COMMISSION:

Nadine S. Samter
George J. Zweibel
Kathryn C. Decker

Charles A. Harwood
Regional Director
Attorneys for the
Federal Trade Commission

FOR THE DEFENDANT:

JOEL YOUNKER
Joel Younker, Individually


Robert G. Maslan
900 4th Avenue, Suite 3003
Seattle, WA 98164
Attorney for Defendant