UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF FLORIDA
TALLAHASSEE DIVISION

FEDERAL TRADE COMMISSION, Plaintiff,

v.

FRANK MUNIZ, Defendant.

Civil Action No.

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 is proper under 28 U.S.C.  1391 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 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 Frank Muniz does business at 4568 Singleton Drive, Tallahassee, Florida 32310. At all times material to this complaint, acting alone or in concert with others, he has formulated, directed, controlled or participated in the acts and practices set forth in this complaint. He resides and transacts or has transacted business in this District.

COMMERCE

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 1997, defendant has advertised, promoted, offered for sale, and sold credit repair products to consumers through the use of the Internet, including the use of unsolicited commercial electronic messages ("e-mail") popularly known as "spamming."

8. Defendant has claimed that he can improve consumers' credit histories, credit records, or credit ratings by assisting them in establishing new credit files. Defendant further claims that creating new credit files is legal.

9. Typical and illustrative of defendant's claim about his credit repair products can be found at defendant's Internet site, "www.womenbehindbars.com/newcrdt.html," and include the following:(1)

BRAND NEW CREDIT FILE IN 30 DAYS
"THROUGH CREDIT FILE SEGREGATION"

This invaluable insiders guide is a must read for any person who has had a bankruptcy, foreclosure, charge-offs, or just damaged credit which has become irrepairable [sic]. You might need to get rid of your bad credit to help your business or to again be "financially healthy", whatever the reason here is the easiest and fastest way to accomplish your goal.

In Miami there is a law firm that charges $1,000.00 to give you a new credit file. This book gives you both methods they use. This book will give you complete instructions and the forms and the addresses you need to file under the Privacy Act and give yourself a new credit file with no connection to your previous credit history.

IS IT LEGAL - There is no law that specifically says it can be done, yet there is also no law that says it can't be done. Lots of research has been done and there have been no court cases in any State Court or the Federal Courts that denied anyone the right to create another credit file. Many attorneys believe that it is possible and have built a good practice by doing it for people.

IS IT ETHICAL - Yes, it is ethical to create a new credit file as long as it is NOT used for the purpose of defrauding someone. Your new credit file does not free you from any of the debts you have incurred. You are still legally obligated to pay those debts.

IS IT PRACTICAL - Yes, it is practical to create a new credit file if you are burdened by damaged credit and it is beneficial to return to a NEW CREDIT status. Considering that lawyers who know about this program charge their clients up to $1,000.00 to perform the same procedures you can do yourself, for under $25.00, we feel it is very practical.

10. Consumers who send $20 to defendant as instructed by defendant's advertisement receive a packet of materials that advises consumers to obtain an Employer Identification Number ("EIN") or a Taxpayer Identification Number ("TIN") from the Internal Revenue Service, or, as an alternative, to obtain a second Social Security Number. The materials instruct consumers how to create a new credit history and credit file under the new identifying number.

VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT

11. The Credit Repair Organizations Act, 15 U.S.C. 1679a-j (1997), was enacted on September 30, 1996, and has been in full force and effect since April 1, 1997.

12. 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 not 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).

13. 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).

COUNT ONE

14. 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 not obsolete to consumer reporting agencies, as that term is defined in 15 U.S.C.  1681(f), or to persons who have extended credit to those consumers or to whom those consumers have applied or are applying for extensions of credit.

15. 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

COUNT TWO

16. In connection with the advertising, marketing, promotion, offering for sale, or sale of credit repair products, to induce consumers to purchase his, products, defendant has, expressly or by implication, represented that, through the use of his products, consumers can legally alter their identifications to conceal adverse credit information from consumers' credit records, credit histories, or credit ratings.

17. In truth and in fact, through the use of defendant's products, consumers cannot legally alter their identifications to conceal adverse credit information from their credit records, credit histories, or credit ratings.

18. Therefore, the representation set forth in paragraph 16 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

19. 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

20. 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:

(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 defendant from violating the Credit Repair Organizations Act and the FTC Act, as alleged herein, in connection with the advertising, promoting, offering for sale, and sale of credit repair products or services;

(c) Award such relief as the Court finds necessary to redress injury to consumers resulting from defendant's violations of the Credit Repair Organizations Act and 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.

Dated:_____________, 1999 Respectfully Submitted,

DEBRA A. VALENTINE
General Counsel

__________________________________
JOHN C. HALLERUD
Attorney for Plaintiff
Federal Trade Commission
55 East Monroe Street, Suite 1860
Chicago, Illinois 60603
(312) 960-5634
Facsimile: (312) 960-5600


Endnote

1. A printed copy of the website is attached to this Complaint.