Illinois Attorney General Lisa Madigan has filed a lawsuit in federal court charging that a Florida credit service organization that solicits customers across the United States by sending spam faxes has violated both state and federal consumer protection laws with its illegal advertising practices and false credit repair promises.
According to Madigan's lawsuit, the Florida credit repair company illegally solicits businesses by sending unsought fax messages, has never registered to do business in Illinois, makes false promises to consumers about repairing their credit histories and accepts money for services they do not perform.
Madigan's lawsuit charges World Wide Search Systems, Inc., a Florida corporation also doing business as National Financial Credit Association, with violations of the U. S. Credit Repair Organizations Act, U.S. Telephone Consumer Protection Act, Illinois Consumer Fraud and Deceptive Business Practices Act and Illinois Credit Services Organization Act.
The lawsuit states that World Wide Search Systems allegedly made false claims that it would improve clients' credit scores by 15 percent within 90 days; remove derogatory items such as bankruptcies, tax liens, student loans, late payments, judgments and foreclosures from credit histories; assist clients in preparing a 100-word statement to be added to their credit reports; and negotiate consumers' debts.
The lawsuit also contends that World Wide Search Systems accepted between $500 and $4,200 per consumer to repair their credit histories. The company allegedly requested at least partial payment in advance for its services.
Additionally, the complaint says that World Wide Search Systems never registered as a credit services organization with the Illinois Secretary of State's office, as required by state law, and allegedly falsely claimed to be recognized by the Federal Trade Commission to perform credit repair services.
Finally, Madigan's complaint asserts that in violation of federal law, World Wide Search Systems allegedly sent unsolicited advertisements to small businesses and individual consumers' fax machines.
In addition, these fax messages allegedly were often sent without the date and time of the message included at the top of the page and without identifying the business or individual that sent the message.
One of the company's faxed ads says, "We can go where most all other credit organizations fail to go." Another ad asks, "Are you or someone you know being held hostage by your credit score? Do you know yours?"
"World Wide Search Systems uses fax machines to transmit false promises of improved credit," Madigan said. "Not only are the company's advertising techniques in violation of federal law, but their pledge to improve people's credit is in violation of our state consumer protection laws. Unless there are errors involved, which you can find yourself, the only person who can improve your credit is you."
Madigan's lawsuit seeks to prohibit World Wide Search Systems from further violating federal or state consumer protection laws. The lawsuit also seeks a civil penalty of $50,000, additional penalties of $50,000 per violation found to have been committed with the intent to defraud and a $10,000 penalty for each violation found to be committed against persons 65 years or older.
Finally, Madigan's lawsuit asks the court to order the defendants to pay restitution to consumers.
Madigan reminded consumers that beginning March 1, 2005, annual free reports can be obtained from each of the three national credit-reporting agencies. A new federal program requires the three national credit reporting companies - Equifax, Experian and Trans Union - to provide consumers, at their request, with a free copy of their credit report every 12 months.
Madigan suggested that to maximize the benefits of this new law, consumers should consider ordering one report from one agency at a time, at four-month intervals.
The annual free reports are available only through the centralized source set up by the three credit reporting agencies. If consumers contact the companies directly they will still be charged for their credit reports.
