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A credit repair company that lured consumers with false claims for credit repair services and required advance payment ranging from $500 to as much as $2,500 has agreed to settle Federal Trade Commission charges that it violated federal law. The agency filed the charges in July as part of “Operation Clean Sweep,” a crackdown on credit repair operations.

The proposed settlement bars the defendants from making deceptive claims when marketing any product or service, including credit repair services. The settlement also bars them from violating the Credit Repair Organizations Act and specifically prohibits the defendants from: (1) claiming that a credit repair organization can permanently remove negative information from consumers’ credit reports, even when the information is accurate and not obsolete; (2) requiring advance payment for credit repair services; (3) failing to provide a written statement of “Consumer Credit File Rights Under State and Federal Law” before any agreement is signed; (4) failing to include in their contract conspicuous statements about the consumer’s right to cancel without penalty or obligation within three business days; and (5) failing to provide a written “Notice of Cancellation” for consumers to use when exercising their cancellation rights.

In addition, the settlement bars the defendants from collecting money from consumers who purchased services from the defendants before July 10, 2008, and from disclosing or benefitting from customers’ personally identifiable or financial information. The defendants are also prohibited from violating the Fair Credit Practices Act and the FTC’s Disposal Rule by failing to take reasonable measures to protect consumers’ personally identifiable information during its disposal.

The settlement imposes a judgment for consumer redress of $210,000, which is suspended due to the defendants’ inability to pay. The full judgment will be imposed if the defendants are found to have misrepresented their financial condition. The settlement also contains record-keeping provisions to allow the FTC to monitor compliance with the order. The defendants are Payneless Credit Repair, LLC, and its owner, Lesley L. Payne, both located in Richardson, Texas.

The FTC advises that only time, 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: How to Help Yourself,” at

The Commission vote to authorize staff to file the stipulated final order was 4-0. The order was filed in the U.S. District Court for the Northern District of Texas, Dallas Division, on December 22, 2008.

NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

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. X080049)

Contact Information

Frank Dorman,
Office of Public Affairs
Thomas B. Carter
FTCs Southwest Region