The owner of a supposed credit monitoring service will repay $5.2 million to deceived consumers for using fake rental properties to trick those consumers into signing up for the credit services.
According to the Federal Trade Commission, Michael Brown and his company, Credit Bureau Center, were found to have cheated consumers into signing up for ongoing credit monitoring services.
Brown and his company, which is formerly known as MyScore, and other co-conspirators placed ads on Craigslist for rental properties that either did not exist or that they had no right to rent.
Brown and his co-conspirators pretended to be property owners and offered tours of the rental properties as long as the prospective renters got credit reports and credit scores from Brown’s websites.
The sites offered “free” credit information but auto-enrolled the renters into a credit monitoring service that charged $29.94 on a monthly basis.
According to the FTC, many of the victims did not realize they were enrolled in the credit services until they noticed unexpected charges on their bank or credit card statements.
The original complaint alleged that the consumers who signed up and got their credit information never got their promised property tours and that emails to the supposed property owners to arrange the tours were not answered.
Back in October 2017, two of Brown’s co-conspirators, Danny Pierce and Andrew Lloyd, were ordered to pay a total of $762,000 to resolve the charges against them.
And last week, a federal judge granted the FTC’s motion for a summary judgment against Brown and his company, finding that they violated the FTC Act, the Restore Online Shoppers’ Confidence Act, the Fair Credit Reporting Act, and the Free Annual File Disclosures Rule.
As part of the judgment, Brown and Credit Bureau Center were ordered to repay $5.2 million to consumers who were taken by the fraud.
Additionally, the court banned Brown and his company from selling any credit monitoring service with a negative option feature, and from misrepresenting material facts about any product or service. According to the FTC, the order also specifies how they must monitor their affiliate marketers in the future.
The order also requires Brown and his company to provide certain disclosures to consumers when selling any product or service with a negative option feature, and when offering free credit reports.
The order also bars Brown and his company from using billing information to obtain payments from consumers without first receiving the consumers’ express consent.