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The Federal Trade Commission has charged a credit repair company and its owner with violating federal law by falsely promising to remove derogatory information from consumers' credit reports – even if the information is accurate and not obsolete. At the Commission's request, a federal court has issued a temporary order stopping the defendants' practices until the conclusion of the case. The agency seeks a final court order to stop the violations and make the defendants forfeit their ill-gotten gains and pay restitution to consumers.

The FTC's complaint alleges that Payneless Credit Repair, LLC and its owner, Lesley L. Payne, both located in Richardson, Texas, make the following claims on the company's Web site,

"Fast, Legal, Effective, CREDIT REPORT REPAIR . . ."

"We will fight to remove negative items from your credit reports, so you can improve your credit score . . .

"No matter what type of negative and damaging information is on your credit report, whether bankruptcy, charge-offs, late payments, or anything in between we will challenge it according to the law. . . We have developed the most effective and appropriate legal strategies to remove negative items from your credit report. . ."

The defendants also advertise in classified ads in The Dallas Morning News and in local online Yellow Pages listings. The FTC's complaint states that in discussions with consumers, Payne promises results that far exceed the written claims, offers a "100 percent money-back guarantee," and misrepresents that her company is licensed and bonded. The defendants ask consumers to sign a contract and pay an advance fee, typically ranging from $500 to $1,000, but sometimes as much as $2,500. Payne often meets with consumers in temporary office suites, at the consumers' workplace, in restaurants, and even in parking lots.

As stated in the complaint, the defendants do little, if anything, to fulfill their promises. Consumers find it difficult to reach the defendants to complain. Consumers' e-mails and voice-mails often go unanswered, and they find that the defendants' temporary offices have been vacated with no forwarding address. Consumers who reach the defendants are given a variety of excuses for why their promised results have not been achieved, and those who persist are told to stop and are often threatened with lawsuits. The defendants almost always deny consumers' refund requests.

The FTC charged the defendants with violating the Credit Repair Organizations Act (CROA) and the FTC Act by falsely representing that they can improve consumers' credit reports by permanently removing negative information, even when the information is accurate and not obsolete. The agency also charged them with violating CROA by requiring advance payment for credit repair services; not including in contracts conspicuous statements about the consumer's right to cancel without penalty or obligation before the third business day after a contract is signed; and not providing, before contracts are signed, the written "Notice of Cancellation" and statement of consumer credit file rights under state and federal law. In addition, the defendants have been charged with violating the FTC Act by falsely stating that the company is licensed and bonded with the state of Texas. In fact, the defendants have not registered as a "credit services organization" with the Texas Secretary of State, as Texas law requires.

The FTC advises that only time, a conscious effort, and a personal debt repayment plan can improve your credit report. The first step is to learn what information is in your credit report. If you find errors or mistakes, federal law gives you the right to have them corrected – free of charge. Federal law requires that the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – provide you with a free copy of your credit report once every 12 months, if you ask for it. To order your free report, visit, call 1-877-322-8228, or complete and mail the Annual Credit Report Request Form. Credit repair information is available in "Credit Repair: Self-Help May Be Best," at

The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Texas, Dallas Division, on July 10, 2008. The court issued a temporary restraining order that halted the defendants' unlawful business practices and froze their assets. The FTC and defendants have asked the court to issue an agreed preliminary injunction that would continue the asset freeze and the conduct prohibitions contained in the order.

NOTE: The Commission files a complaint when it has "reason to believe" that the law has been
or is being violated, and it appears to the Commission that a proceeding is in the public interest.
The complaint is not a finding or ruling that the defendant has actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.

(Payneless Credit Repair)
(FTC File No. 0823053)

Contact Information

Frank Dorman,
Office of Public Affairs
Thomas B. Carter
FTC's Southwest Region