The New York Attorney General ordered credit repair service Credit Forget It, Inc. to shut itself down, claiming the company sold credit repair and identity theft prevention services via car dealerships unlawfully, according to a press release yesterday.
Under a consent order issued from the New York AG’s office, the Brooklyn-based credit repair company was ordered to pay $50,000 within 10 days, with the possibility for an additional $2 million penalty upon failure to comply with the AG’s terms, which include: submitting a list of all dealers to whom they have distributed contracts for credit repair and/or identity theft protection services for sale to consumers within 15 days; filing a compliance report within 120 days; and dissolving the company within 60 days.
“It is a violation of state and federal law to charge upfront fees for services that promise to help consumers restore or improve their credit,” the release reads. “And contracts that violate the law are void.”
The settlement was issued under the attorney general’s initiative to end the practice of “jamming,” unlawfully charging consumers for hidden purchases by car dealerships. Besides Credit Forget It, New York dealership Paragon Honda and two sister stores were also fined.
The dealerships agreed to pay restitution totaling $13.5 million to an estimated 15,000 consumers, over the sale of credit repair and identity theft prevention services, plus other “after-sale” items. In some cases add-ons tacked on more than $2,000 in hidden costs and fees onto the sale or lease price of a single vehicle, according to prosecutors.
The Attorney General also served notice yesterday of his intent to sue 11 other auto dealerships who allegedly engaged in similar practices.
