IN THE UNITED STATES DISTRICT COURT
Civil Action No.
FEDERAL TRADE COMMISSION, Plaintiff,
MEHMET AKCA (a/k/a MATT AKCA), also d/b/a AKCA, Defendant.
COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), for its Complaint alleges:
1. The Commission brings this action under 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), 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 products in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and Section 404(a)(2) of the Credit Repair Organizations Act, 15 U.S.C. § 1679b(a)(2).
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), 57b, and 1679h(b).
3. Venue in the District of Colorado is proper under 28 U.S.C. § 1391(b) and 15 U.S.C. § 53(b).
4. Plaintiff, the Federal Trade Commission, is an independent agency of the United States Government created by statute. 15 U.S.C. §§ 41-58. 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 also enforces the Credit Repair Organizations Act. 15 U.S.C. §§ 1679h(a). The Commission is authorized to initiate federal district court proceedings, by its own attorneys, to enjoin violations of the FTC Act and the Credit Repair Organizations Act in order to secure such equitable relief, including consumer redress, as may be appropriate in each case. 15 U.S.C. §§ 53(b), 57b, and 1679h(b).
5. Defendant Mehmet Akca, who also goes by Matt Akca and does business as AKCA, resides or has resided and transacts or has transacted business at 9923 E. Jewell Ave., Suite 108, Denver, Colorado 80231, which is in this district.
6. At all times relevant to this complaint, defendant has maintained a substantial course of trade in the offering for sale and selling of credit repair products, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
DEFENDANT'S BUSINESS PRACTICES
7. Since at least July 1998, defendant has advertised, promoted, offered for sale, and sold credit repair services to consumers through the Internet.
8. Defendant has claimed that he can assist consumers in improving their credit histories, credit records, or credit ratings by various methods, including by assisting them in establishing new credit profiles with credit bureaus by using an Employer Identification Number ("EIN") or Taxpayer identification Number ("TIN") in place of their Social Security Number for banking and credit purposes.
9. Typical and illustrative of defendant's claims about his credit repair services are the following:
10. Consumers who respond to defendant's advertisements receive a packet of materials that advise consumers to obtain an EIN or a TIN from the Internal Revenue Service. Defendant also advises his customers to obtain a new residence address with a different zip code, such as by using the address of a friend or relative. Using the new taxpayer number and new residence address, defendant directs consumers to apply for credit, which defendant states will cause creation of a new clean credit file at the credit bureaus. Defendant also tells consumers that removal of accurate negative information from credit reports is ethical.
11. Defendant charges between $25 and $35 for these materials.
VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT
12. The Credit Repair Organizations Act, 15 U.S.C. §§ 1679 and 1679a-j (1997), was enacted on September 30, 1996, and has been in full force and effect since April 1, 1997.
13. Section 404(a)(2) of the Credit Repair Organizations Act prohibits all persons from making any statement, or counseling or advising any consumer to make any statement, the intended effect of which is to alter the consumer's identification to prevent the display of the consumer's credit record, history, or rating for the purpose of concealing adverse information that is accurate and non-obsolete to any consumer reporting agency as defined in 15 U.S.C. § 1681(f) or to any person who has extended credit to the consumer or to whom the consumer has applied or is applying for an extension of credit. 15 U.S.C. § 1679b(a)(2).
14. 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 and deceptive act or practice in commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C.§ 45(a).
15. In numerous instances, defendant has counseled or advised consumers to make statements, the intended effect of which has been to alter the consumer's identification to prevent the display of the consumer's credit record, history, or rating for the purpose of concealing adverse information that is accurate and non-obsolete to consumer reporting agencies, as that term is defined in 15 U.S.C. § 1681(f), or persons who have extended credit to those consumers or to whom those consumers have applied or are applying for extensions of credit.
16. Defendant has thereby violated Section 404(a)(2) of the Credit Repair Organizations Act, 15 U.S.C. § 1679b(a)(2).
VIOLATIONS OF THE FEDERAL TRADE COMMISSION ACT
17. In connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair products, to induce consumers to purchase defendant's products, defendant has, expressly or by implication, made representations that consumers can alter their identifications to conceal adverse credit information from credit records, credit histories, or credit ratings by following defendant's recommendations to obtain EINs or TINs, for credit purposes.
18. Defendant has failed to disclose in a clear and conspicuous manner that the use of an EIN or TIN in the manner recommended violates criminal law, e.g., 18 U.S.C. § 1014; 42 U.S.C. § 408(a)(7)(B).
19. Therefore, defendant's failure to disclose this material fact, in light of the representations made, is deceptive, and violates Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
20. Consumers throughout the United States 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
21. 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), empower this Court to issue a permanent injunction against defendant's violations of the Credit Repair Organizations Act and 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 410(b) of the Credit Repair Organizations Act, 15 U.S.C. § 1679h(b), Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, and pursuant to its own equitable powers:
Dated:_____________, 1999 Respectfully Submitted,
DEBRA A. VALENTINE