McDaniel
JACKSONVILLE, Fla. (Legal Newsline) - A federal judge has shut down a Florida-based company offering allegedly bogus credit-repair services nationwide after Arkansas Attorney General Dustin McDaniel brought the company's activities to the attention of federal authorities.
The U.S. District Court for the Middle District of Florida issued an order against Latrese and Kevin Hargrave and their companies June 1.
The court froze the operation's assets, seized equipment and files, and placed the companies in receivership. It bars the defendants from all activities involving credit repair, and from offering credit-related products, programs or services.
The order remains in place as the Federal Trade Commission seeks a contempt ruling against the defendants for violating an original order in 2010.
In 2008, the FTC filed a complaint against the Hargraves and their companies, alleging they advertised on the Internet and radio stations and charged $250 to $270 per person and $450 per couple for purported credit repair services, requiring half or all of the charge to be paid in advance.
Then, in January 2010, the court ruled in favor of the FTC and barred the defendants from engaging in the deceptive conduct -- including making or using untrue or misleading statements to induce consumers to buy their credit repair services. It also barred them from charging or receiving an upfront payment for such services before they are performed.
According to McDaniel's office, the Hargraves are responsible for the signs that dot many of Arkansas' roadsides, advertising a telephone number and the potential to "erase bad credit" for $250.
"Our Consumer Protection Division conducted an extensive investigation into this operation. Since the FTC had an existing order barring the business practices detailed in our investigation, we forwarded the results of that investigation to the FTC," the attorney general said Thursday.
"I appreciate the dedicated efforts of our investigators who work on behalf of the people of Arkansas to defend them from scams such as this."
The federal Credit Repair Organizations Act prohibits for-profit organizations from charging or accepting upfront fees for "credit repair."
The FTC alleged the defendants violated that law, as well as the FTC Act, through their false credit-repair claims.
McDaniel, meanwhile, reminded residents that anything a credit-repair company can legally do, consumers may also do themselves for free or for very little cost.
As for the State's own investigation into the defendants' activities, the attorney general said last week it is "ongoing."
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.