Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.1 Filed 05/23/22 Page 1 of 48 

IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF MICHIGAN 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

v. 

FINANCIAL EDUCATION SERVICES, 

INC., a Michigan corporation, 

UNITED WEALTH SERVICES, INC., a 

Michigan corporation, 

VR-TECH, LLC, a Michigan limited 

liability company, 

VR-TECH MGT, LLC, a Michigan 

limited liability company, 

CM RENT INC., a Colorado corporation, 

YOUTH FINANCIAL LITERACY 

FOUNDATION, a Michigan nonprofit 

corporation, 

PARIMAL NAIK, in his individual and 

corporate capacity, 

MICHAEL TOLOFF, in his individual 

and corporate capacity, 

CHRISTOPHER TOLOFF, in his 

individual and corporate capacity, and 

GERALD THOMPSON, in his individual 

and corporate capacity, 

Defendants. 

Case No. 2:22-cv-11120-BAF-APP 

Hon. Bernard A. Friedman 

1 
 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.2 Filed 05/23/22 Page 2 of 48 

COMPLAINT FOR PERMANENT INJUNCTION, MONETARY RELIEF, 

AND OTHER RELIEF 

Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges: 

1. The FTC brings this action under Sections 13(b) and 19 of the Federal Trade 

Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, Section 410(b) of 

the Credit Repair Organizations Act (“CROA”), 15 U.S.C. § 1679h(b), and 

Section 6(b) of the Telemarketing and Consumer Fraud and Abuse Prevention 

Act (“Telemarketing Act”), 15 U.S.C. § 6105(b), which authorize the FTC to 

seek, and the Court to order, temporary, preliminary, and permanent 

injunctive relief, monetary relief, and other relief for Defendants’ acts or 

practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), 

multiple provisions of CROA, 15 U.S.C. §§ 1679-1679l, and the FTC’s 

Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, in connection with 

Defendants’ marketing and sale of credit repair services and investment 

opportunities. 

SUMMARY OF CASE 

2. Since at least 2015, Defendants have operated an unlawful credit repair scam 

that has deceived consumers across the country. Through Internet websites, 

social media, telemarketing, and using a network of sales agents (“FES 

Agents”), Defendants falsely claim they can improve consumers’ credit 

scores by removing all negative items from their credit reports and adding 

2 
 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.3 Filed 05/23/22 Page 3 of 48 

credit building products. Defendants often provide FES Agents with the 

necessary promotional and marketing materials, including social media-ready 

advertising and scripts, to market Defendants’ credit repair services to 

English- and Spanish-speaking consumers. And Defendants routinely take 

prohibited advance fees from consumers for their credit repair services and do 

not make required disclosures regarding those services. 

3. In addition, Defendants market an investment opportunity—encouraging 

consumers to become FES Agents and then recruit other consumers to 

purchase Defendants’ credit repair services (often at the same time as 

marketing their credit repair services). Defendants falsely claim that FES 

Agents will earn substantial income. Defendants often provide FES Agents 

with the necessary marketing materials, including social media-ready 

advertising and scripts, to recruit new agents. In reality, however, 

Defendants’ purported investment opportunity is an illegal pyramid scheme. 

Defendants’ compensation plan incentivizes recruiting new FES Agents over 

selling credit repair services, and few consumers ever realize the promised 

earnings. 

JURISDICTION AND VENUE 

4. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 

1337(a), and 1345. 

3 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.4 Filed 05/23/22 Page 4 of 48 

5. Venue is proper in this District under 28 U.S.C. § 1391(b)(1), (b)(2), (c)(1), 

and (c)(2), and 15 U.S.C. § 53(b). 

PLAINTIFF 

6. The FTC is an independent agency of the United States Government created 

by the FTC Act, which authorizes the FTC to commence this district court 

civil action by its own attorneys. 15 U.S.C. §§ 41-58. The FTC enforces 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or 

deceptive acts or practices in or affecting commerce. The FTC also enforces 

CROA, 15 U.S.C. §§ 1679-1679l, which prohibits untrue or misleading 

representations to induce the purchase of credit repair services, requires 

certain affirmative disclosures in the offering or sale of credit repair services, 

and prohibits credit repair service organizations from charging or receiving 

money or other valuable consideration for the performance of credit repair 

services before such services are fully performed. The FTC also enforces the 

Telemarketing Act, 15 U.S.C. §§ 6101-6108. Pursuant to the Telemarketing 

Act, the FTC promulgated and enforces the TSR, 16 C.F.R. Part 310, which 

prohibits deceptive and abusive telemarketing acts or practices. 

DEFENDANTS 

7. Defendant Financial Education Services, Inc. (“FES”) is a Michigan 

corporation with its principal place of business at 37637 Five Mile Road, 

Suite 397, Livonia, Michigan. FES was originally incorporated as Credit 

4 
 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.5 Filed 05/23/22 Page 5 of 48 

Education Services, Inc. FES has also done business as American Credit 

Education Premium Services, American Credit Education Services, United 

Credit Education Premium Services, United Credit Education Services, 

United Wealth Education, and VR-Tech Marketing Group. At all times 

relevant to this Complaint, acting alone or in concert with others, FES has 

marketed and sold credit repair services and investment opportunities to 

consumers throughout the United States. FES transacts or has transacted 

business in this District and throughout the United States. 

8. Defendant United Wealth Services, Inc. (“United Wealth”) is a Michigan 

corporation with its principal place of business at 37735 Enterprise Court, 

Suite 600, Farmington Hills, Michigan. United Wealth has also used an 

address of 37637 Five Mile Road, Suite 397, Livonia, Michigan. United 

Wealth has also done business as United Wealth Education. At all times 

relevant to this Complaint, acting alone or in concert with others, United 

Wealth has marketed and sold credit repair services and investment 

opportunities to consumers throughout the United States. United Wealth 

transacts or has transacted business in this District and throughout the United 

States. 

9. Defendant VR-Tech, LLC (“VR-Tech”) is a Michigan limited liability 

company with its principal place of business at 37735 Enterprise Court, Suite 

600, Farmington Hills, Michigan. VR-Tech was formed from the merger of 

5 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.6 Filed 05/23/22 Page 6 of 48 

three previously incorporated Michigan companies, VR-Tech Data Processing 

Solutions, LLC, VR-Tech Software Solutions, LLC, and VR-Tech Marketing 

Group, LLC. VR-Tech has also done business as Financial Education & 

Services, LLC. At all times relevant to this Complaint, acting alone or in 

concert with others, VR-Tech has marketed and sold credit repair services and 

investment opportunities to consumers throughout the United States. VRTech transacts or has transacted business in this District and throughout the 

United States. 

10. Defendant VR-Tech MGT, LLC (“VR-Tech Mgt”) is a Michigan limited 

liability company with its principal place of business at 37735 Enterprise 

Court, Suite 600, Farmington Hills, Michigan. At all times relevant to this 

Complaint, acting alone or in concert with others, VR-Tech Mgt has marketed 

and sold credit repair services and investment opportunities to consumers 

throughout the United States. VR-Tech Mgt transacts or has transacted 

business in this District and throughout the United States. 

11. Defendant CM Rent Inc. (“CM Rent”) is a Colorado company with its 

principal place of business at 1415 Park Avenue, Denver, Colorado. CM 

Rent is registered as a foreign corporation in Michigan, with an address of 1 

Towne Square, Suite 1835, Southfield, Michigan. CM Rent has also done 

business as Credit My Rent. At all times relevant to this Complaint, acting 

alone or in concert with others, CM-Rent has marketed and sold credit repair 

6 
 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.7 Filed 05/23/22 Page 7 of 48 

services and investment opportunities to consumers throughout the United 

States. CM-Rent transacts or has transacted business in this District and 

throughout the United States. 

12. Defendant Youth Financial Literacy Foundation (“Youth Financial”) is a 

Michigan nonprofit corporation with its principal place of business at 37637 

Five Mile Road, Suite 397, Livonia, Michigan. Youth Financial was 

originally incorporated as MSU Common Sense, Inc., which changed its 

name to The Thompson Scholarship Foundation, Inc., which changed its 

name to Patro Scholarship Foundation, Inc., which changed its name to Youth 

Financial. Youth Financial has also done business as American Credit 

Education Services, Financial Education, Financial Literacy Education 

Services, and United Credit Education Services. At all times relevant to this 

Complaint, Youth Financial has carried on business for its own profit or that 

of its members. At all times relevant to this Complaint, acting alone or in 

concert with others, Youth Financial has marketed and sold credit repair 

services and investment opportunities to consumers throughout the United 

States. Youth Financial transacts or has transacted business in this District 

and throughout the United States. 

13. Defendant Parimal Naik is or was an owner, officer, director, or manager of 

Youth Financial, FES, and VR-Tech. He is an authorized signatory on many 

of Defendants’ bank accounts. Defendants’ telecommunications services are 

7 
 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.8 Filed 05/23/22 Page 8 of 48 

often paid using his credit card. At all times relevant to this Complaint, 

acting alone or in concert with others, he has formulated, directed, controlled, 

had the authority to control, or participated in the acts and practices set forth 

in this Complaint. Defendant Parimal Naik resides in this District and, in 

connection with the matters alleged herein, transacts or has transacted 

business in this District and throughout the United States. 

14. Defendant Michael Toloff is or was an owner, officer, director, or manager of 

Youth Financial, FES, and VR-Tech Mgt. He is an authorized signatory on 

many of Defendants’ bank accounts. At all times relevant to this Complaint, 

acting alone or in concert with others, he has formulated, directed, controlled, 

had the authority to control, or participated in the acts and practices set forth 

in this Complaint. Defendant Michael Toloff resides in this District and, in 

connection with the matters alleged herein, transacts or has transacted 

business in this District and throughout the United States. 

15. Defendant Christopher Toloff is or was an owner, officer, director, or 

manager of Youth Financial and CM Rent. He is an authorized signatory on 

many of Defendants’ bank accounts. At all times relevant to this Complaint, 

acting alone or in concert with others, he has formulated, directed, controlled, 

had the authority to control, or participated in the acts and practices set forth 

in this Complaint. Defendant Christopher Toloff resides in this District and, 

8 
 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.9 Filed 05/23/22 Page 9 of 48 

in connection with the matters alleged herein, transacts or has transacted 

business in this District and throughout the United States. 

16. Defendant Gerald Thompson is or was an owner, officer, director, or 

manager of Youth Financial and FES. He is an authorized signatory on many 

of Defendants’ bank accounts. At all times relevant to this Complaint, acting 

alone or in concert with others, he has formulated, directed, controlled, had 

the authority to control, or participated in the acts and practices set forth in 

this Complaint. Defendant Gerald Thompson resides in this District and, in 

connection with the matters alleged herein, transacts or has transacted 

business in this District and throughout the United States. 

COMMON ENTERPRISE 

17. Defendants FES, United Wealth, VR-Tech, VR-Tech Mgt, CM Rent, and 

Youth Financial (collectively, “Corporate Defendants”) have operated as a 

common enterprise while engaging in the unlawful acts and practices alleged 

below. Corporate Defendants have conducted the business practices 

described below through an interrelated network of companies that have 

common ownership, officers, managers, business functions, employees, and 

office locations, and that commingled funds. Because these Corporate 

Defendants have operated as a common enterprise, each of them is liable for 

the acts and practices alleged below. 

9 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.10 Filed 05/23/22 Page 10 of 

48 

COMMERCE 

18. At all times relevant to this Complaint, Defendants have maintained a 

substantial course of trade in or affecting commerce, as “commerce” is 

defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 

DEFENDANTS’ UNLAWFUL BUSINESS ACTIVITES 

Defendants’ Unlawful Credit Repair Services 

Defendants’ Deceptive Internet and Social Media Claims 

19. To induce consumers to purchase their credit repair services, Defendants and 

their agents utilize Internet websites, including ucesprotectionplan.com, 

united-credit.org, creditmyrent.com, financialeducationservices.com and 

fesprotectionplan.com, as well as social media sites, such as Facebook, 

Instagram, and YouTube on which they make deceptive claims regarding 

their services. 

20. Defendants claim they can successfully and permanently remove all negative 

information from consumers’ credit histories or credit reports. Defendants 

also claim they will build a positive payment history for consumers by 

reporting their rental payments to credit reporting agencies, through their 

Credit My Rent service. Defendants also claim they can obtain for consumers 

credit-building products, such as secured credit cards. Defendants claim that 

these activities will significantly increase consumers’ credit scores and their 

eligibility for funding at lower interest rates. 

10 
 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.11 Filed 05/23/22 Page 11 of 

48 

21. For example, Defendants and their agents have made the following statements 

regarding Defendants’ credit repair services: 

• Who needs negative items removed from their credit report Permanently??? 

• Attention!! If you have 400-500 credit score and want a 700-800 score, I 

have a connection that legally erases negative things..repos, foreclosures, 

late payments, medical, student loans evictions, and more. 

• If you have 400-675 credit score and want a 700-800 credit score, David can 

LEGALLY erase negative items...repos, foreclosures, late payments, 

medical, student loans, evictions, and more 

• Good morning! Did You Know? Late payments can be removed from your 

credit report & increase your score by 100 points!! 

• Si tu puntaje de credito es menos de 600 nosotros tenemos los servicios 

financieros para aumentar tu credito [translation: If your credit score is less 

than 600 we have the financial services to increase your credit] 

• Si usted tiene un credito entre 499-699 puntos le borramos legalmente todo 

lo que la esta afectando a su credito. [translation: If you have a credit 

between 499-699 points, we legally erase everything that is affecting your 

credit.] 

• [YouTube video presenter states:] Now this is what I love, is Credit My 

Rent. For a lot of people, they’re biggest expense is their rent, but it’s not 

being reported to the credit bureaus. Now this is a separate service where 

you can actually back date up to two years of your rent payments, have them 

reported to – we actually do work with Transunion and Equifax right now – 

and it can help you boost your credit score anywhere from 50 to 100 points. 

• Student Loans 🚫🚫 Deleted 

Medical bills 🚫🚫 Deleted 

Late payments 🚫🚫 Deleted 

11 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.12 Filed 05/23/22 Page 12 of 

48 

Collections 🚫🚫 Deleted 

Bankruptcy 🚫🚫 Deleted 

Evictions 🚫🚫 Deleted 

Repossessions 🚫🚫 Deleted 

Any negative items on your credit report that are currently affecting your 

score 🚫🚫 Deleted !!

• Build Credit, the Smart Way 

CreditMyRent is the fastest & most effective way to build credit without 

taking on new debt 

• The [secured credit] card is designed to advance the accumulation of new 

information in a credit file by reporting account activity to all three of the 

major national credit bureaus every month. 

22. Defendants and their agents also depict purported success stories of 

consumers for whom Defendants allegedly raised their credit. The 

testimonials include the following statements: 

• I had three student loans removed from my credit reports within 45 days and 

my credit score increased from a 590 to a 662! 

• When I started in the service I had a low 500 credit score and within six 

months it jumped to over 700 and I was able to purchase a new Mercedes 

Benz! 

• My credit score went up 140 points, from a 530 to a 670, in my first 30 days, 

allowing me to purchase a new home! 

• When I started my credit score was a 505 and I had 23 derogatory items on 

my credit reports. After just 60 days, 18 of the 23 were deleted and my 

credit score went up 174 points to a 679! 

• My credit score has gone up 120 points, from a 660 to a 780, and I was able 

to get a new car at 1.9% interest. It really works! 

12 
 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.13 Filed 05/23/22 Page 13 of 

48 

• In January of 2014 I had a 412 credit score and by March 2014, my score 

went up to 714. This service is AMAZING!!! 

• In just 60 days in the credit restoration service my credit score jumped 120 

points, from a 505 to 625! 

• United Wealth Education has been a godsend for me and my family. Since 

enrolling in the company my credit score has increased over 180 points. This 

company is amazing! 

• Lo hice por 16 meses, donde mi estado crediticio cambio de 25 artículos 

negativos con 430 puntos en mi crédito, a escalarlo a 749 en solamente 16 

meses [English translation: I did it for 16 months, where my credit status 

changed from 25 negative accounts and a 430 credit score to 749 in just 16 

months] 

• Christina began using the services over a year ago and within a four month 

period her score increased 150 points!! 

• [YouTube video presenter states:] I signed up for the program, my credit 

score went up 130-something points within the first 45 days. I went from a 

465 to a 538, by month three I went from that 538 to a 610. I added on the 

other products they offer which is a secured credit card and CreditMyRent 

which we’ll discuss in a minute, and my score went from the 610 to the 700. 

And so the same thing that happened to me can definitely happen to you. 

• [YouTube video presenter states:] Within three months my score went from 

a 540 to a 750—210 points in three months. I was able to go and get my 

dream car, a Dodge Challenger Hemi. 

• [YouTube video presenter states:] I not only got my child support judgment 

removed within 30 days, they also removed $20,000 of medical collections 

in the same 30 days. And then on top of that, because of everything 

13 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.14 Filed 05/23/22 Page 14 of 

48 

Jacqueline went over, including the CreditMyRent, I was able to take my 

score from a 540 to a 705 within four months of the program. 

• [YouTube presenter states:] Within a few months, her credit score jumped 

200 points, she had about 13 items deleted from her credit . . . now she’s a 

homeowner. 

• [Slide from YouTube video presentation:] My credit score went from a 586 

to a 748 allowing me to purchase a new car with no money down and a very 

low monthly payment! 

• [Slide from YouTube video presentation:] I took advantage of the protection 

plan and my score went up 269 points in the first 4 months. 

Defendants’ Deceptive Telemarketing Activity 

23. Defendants’ and their agents’ Internet websites and social media accounts 

often list telephone numbers for consumers to call for more information. 

Their social media accounts also encourage consumers to message their 

contact information to receive a telephone call for more information. 

24. When consumers then speak with Defendants’ representatives over the 

telephone, the representatives make many of the same deceptive 

representations included on Defendants’ websites and social media accounts. 

For example, in numerous instances, Defendants’ representatives falsely 

claim that Defendants can remove negative items from consumers’ credit 

reports, including student loans, child support judgments, and bankruptcies. 

Defendants’ representatives explain that they achieve their results by sending 

manual dispute letters to the credit reporting agencies. Defendants’ 

14 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.15 Filed 05/23/22 Page 15 of 

48 

representatives sometimes refer to their dispute process as something “the 

credit bureaus don’t want you to know about.” 

25. In numerous instances, Defendants’ representatives claim that as a result of 

Defendants’ services, consumers’ credit scores will improve significantly 

within 30 to 90 days. 

Defendants’ COVID-Related Claims 

26. Defendants and their agents have also made numerous recent statements that 

prey on consumers’ fears regarding the financial uncertainty associated with 

the COVID-19 pandemic as a reason for purchasing their credit repair 

services. For example, in YouTube video presentations, Defendants and their 

agents have made statements such as: 

• During this pandemic a lot of people didn’t expect to have gotten laid off, 

going through divorces and things like that. Bad things happen to good 

people all the time. But ultimately a good credit score opens up possibilities 

to create the lifestyle that you deserve. 

• Now over 43 million Americans have a credit score of a 599, or less than 

perfect credit. And this was before COVID. Guys this number has doubled. 

It is over 80 million, ladies and gentlemen, people with less than perfect 

credit. Now when you have less than perfect credit, you know, you were like 

me when I had a 509 credit score, you know, I had anxiety, I was 

embarrassed to even go apply for a car or even try to go rent an apartment 

because guys I was afraid of getting denied. 

• Over 43 million Americans have a credit score of 599 or less, and that was 

pre-pandemic. Now that number has multiplied by three, almost four times. 

15 
 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.16 Filed 05/23/22 Page 16 of 

48 

Imagine over 90 million people with a credit score less than 599. Can we 

agree that we’re offering something that people need? 

27. Meanwhile, in some instances, Defendants encourage FES Agents to market 

their credit repair services by saying, without any substantiation, that because 

of the COVID-19 pandemic, the credit bureau and creditor work force would 

be less likely to respond timely to dispute letters, resulting in the automatic 

removal of the disputed items. 

Defendants’ Unlawful Enrollment Process 

28. Before providing any of the promised credit repair services, Defendants 

require consumers to make an upfront payment for these services. 

Defendants’ representatives typically tell consumers that Defendants’ services 

cost $89 per month with a one-time payment of $99, variously referred to as a 

registration or activation fee. In more recent instances, the monthly fee drops 

to $69 per month after 3 months of enrollment, and then to $49 per month 

after one year. To enroll, Defendants require consumers to pay the $99 

registration fee and the first month fee of $89, for a total of $188. In some 

instances, Defendants will offer to lower or waive the registration fee if the 

consumers agree to sign up on the call. 

29. Consumers enrolling in Defendants’ Credit My Rent service must pay 

additional fees before receiving services. The base fee is $14.95 per month, 

for which Defendants purport to report one rent payment each month. For an 

16 
 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.17 Filed 05/23/22 Page 17 of 

48 

additional upfront payment of $99 (in addition to the monthly fee), 

Defendants purport to report 12 months of past rental history. For an 

additional upfront payment of $149, Defendants purport to report 24 months 

of past rental history. 

30. Defendants require consumers to provide their financial information, 

including their credit or debit card number or account routing number and 

bank account number, on the phone. In numerous instances, shortly after 

consumers provide Defendants with their billing information, Defendants 

charge consumers’ credit or debit cards or withdraw payment from 

consumers’ bank accounts before fully performing the promised credit repair 

services. In some instances, Defendants create or cause to be created 

remotely created checks as payment for their credit repair services. 

31. In numerous instances, Defendants fail to provide or obtain written and dated 

contracts signed by consumers that contain: (1) the terms and conditions of 

payment, including the total amount of all payments to be made by the 

consumer to Defendants or to any other person, (2) a full and detailed 

description of the credit repair services to be performed by Defendants for the 

consumer, including (a) all guarantees of performance, and (b) an estimate of 

(i) the date by which the performance of the services (to be performed by 

Defendants or any other person) will be complete or (ii) the length of the 

period necessary to perform such services; (3) Defendants’ name and 

17 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.18 Filed 05/23/22 Page 18 of 

48 

principal business address; or (4) a conspicuous statement in bold face type, 

in immediate proximity to the space reserved for the consumer’s signature on 

the contract, which reads as follows: “You may cancel this contract without 

penalty or obligation at any time before midnight of the 3rd business day after 

the date on which you signed the contract. See the attached notice of 

cancellation form for an explanation of this right.” 

32. In numerous instances, Defendants fail to provide consumers with a written 

statement containing prescribed language concerning “Consumer Credit File 

Rights Under State and Federal Law” before any contract or agreement is 

executed. 

33. In numerous instances, Defendants fail to provide consumers with a “Notice 

of Cancellation” form, in duplicate, containing prescribed language 

concerning consumers’ three-day right to cancel that consumers can use to 

cancel the contract. 

Defendants Do Not Follow Through on Credit Repair Promises 

34. In numerous instances, Defendants email consumers form dispute letters 

challenging, without support, all or almost all negative information in 

consumers’ credit reports. Defendants instruct consumers to print the letters 

and mail them directly to the credit reporting agencies. In numerous 

instances, however, these unsupported challenges have not caused credit 

reporting agencies to delete permanently or change the information. 

18 
 

 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.19 Filed 05/23/22 Page 19 of 

48 

35. Further, in many instances, the credit building products offered by Defendants 

do not have the positive impact on the consumer’s credit score promised by 

Defendants. For example, through their CreditMyRent brand, Defendants 

claim to report consumers’ positive rental history to TransUnion and Equifax. 

Rental payments, however, do not factor in FICO® Score 8, the FICO score 

commonly used by lenders. 

36. In short, in numerous instances, Defendants fail to remove negative 

information permanently from consumers’ credit reports. And in numerous 

instances, consumers who purchase Defendants’ credit repair services do not 

obtain the promised improvements to their credit scores. In fact, in some 

instances, consumers reported that their credit scores actually worsened after 

purchasing Defendants’ credit repair services. 

Defendants’ Unlawful Investment Opportunity and Pyramid Scheme 

37. In addition to marketing their credit repair services, Defendants also market a 

purported investment opportunity, soliciting consumers to become FES 

Agents to recruit additional consumers to purchase Defendants’ credit repair 

services and become FES Agents themselves. This investment opportunity is, 

in reality, an illegal pyramid scheme. 

Defendants’ Deceptive Internet and Social Media Claims 

38. Defendants and their agents utilize Internet websites, including myuwe.net, 

financialeducationservices.com, fesuniversity.com, and 

19 
 

 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.20 Filed 05/23/22 Page 20 of 

48 

momentumsociety.net, as well as social media sites, including Facebook, 

Instagram, and YouTube, on which they make deceptive claims regarding 

their investment opportunities. 

39. Defendants claim that consumers who enroll as FES Agents will earn 

substantial income, typically in the form of commissions and bonuses, for the 

recruitment of new FES Agents and downstream revenue from the purchases 

by consumers of credit repair services. 

40. For example, Defendants and their agents have made the following statements 

regarding Defendants’ investment opportunity: 

• If I could show you how to earn a [sic] extra 500-1000 a week in a home 

based business that you can run in all 50 states would you be willing to hear 

more information? 

Imagine creating your own weekly $1200 check...would that help your 

family 

• [YouTube presenter states:] Then the next way we get paid is called our 

Monthly Infinity Bonus. And it starts at Sales Director. So at Sales Director, 

at $10,000 a month in volume, you’re bringing in it’s 0.5%, which is about 

$50, but that’s just a bonus, guys. . . . So we’re always getting this every 

single month. But if you skip down a couple to where J[] G[] is, at 

Executive Sales Director, she’s bringing in over $50,000 a month in 

business, her and her whole team, she’s getting 1% of that. So she’s getting 

a bonus every month of $500. And then if you skip a few and go down to 

Executive Vice President where we currently are, that’s the whole team, 

we’re generating about half a million in business, every 30 days. So 2 

percent of that, guys I’m getting $10,000, that’s a six-figure income just in 

this bonus, every single month. . . . Shout out to our senior vice President 

X[] M[] because he’s currently bringing in, with the team and all of us, 

20 
 

 

 

 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.21 Filed 05/23/22 Page 21 of 

48 

about a million dollars every single 30 days in business. At 2.25 percent, 

that’s over $22,000 he’s getting as a bonus. And then Pinnacle Senior Vice 

President, shout out to Mr. N[], at $10 million in business volume a month 

he’s bringing in 3 percent, So this infinity bonus for him, he’s getting over 

$300,000 a month guys. 

• [YouTube presenter states:] Just imagine how this could grow. Obviously if 

you did it once a month you could be looking at, “hey I’m earning about 

$5,000 a month.” Or what if this happened once a week? Then the numbers 

grow and you could be looking at $20,000 a month. And these are 

substantial figures, but I can assure you that this company produces 

individuals that have gone out and had the ability to earn this kind of money. 

And what if you did this twice a week? I mean it’s phenomenal. 

• Trabaja de donde sea en Puerto Rico y Estados Unidos, trabaja tus horas, 

Gana DINERO extra, Pasa mas tiempo con tu familia [English translation: 

Work from wherever in Puerto Rico and the United States, work your own 

hours, earn extra income, spend more time with your family] 

• [YouTube presenter states:] te van a dar lo que es residuales, no solamente 

de lo que tú vas a referir, si no de lo que va a referir tu red, aparte de las 

comisiones. O sea que es tremendo este plan de compensación que tú 

puedes ejercer, y aparte de eso también van a pagar tu automóvil, van a 

pagar tu casa, te van a dar bonus en cash, te dan todo tipo de compensación 

mientras tú te estructures, a medida tu vayas escalando estas gradas que 

miras hasta al éxito, ellos van a irte dando más beneficios para que tu no 

tengas que pagar por tu auto, por tu casa, y ahorrar todo tu dinero. ¿Qué te 

parece eso? [translation: they are going to give you what is residual, not only 

from what you will refer, but from what your network will refer, apart from 

the commissions. So this tremendous compensation plan that you can 

exercise, and apart from that they will also pay your automobile, they will 

pay your house, they will give you a cash bonus, they give you all types of 

compensation while you structure yourself, as you go climbing these stairs 

that you look at to success, they are going to give you more benefits so that 

you don’t have to pay for your auto, for your house, and [so that you can] 

save all your money. How does that sound to you?] 

21 
Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.22 Filed 05/23/22 Page 22 of 

48 

• THE FIVE DIMENSIONS OF THE PAY PLAN 

Personal Income 

 Earn Directly for each Protection Plan Member you enroll. 

Team Income 

 Compound your success by building a strong team 

Expansion Income 

 Grow you [sic] local market or network with people from across the 

United States 

Residual Income 

 Earn over-and-over based on the sale of services to your team and 

their customers 

Bonus Income 

 The Compensation Plan features six ways to earn, including lucrative 

bonus opportunities 

• R&R CLUB 

In addition to Four Dimensions of income, you could earn special R&R Club 

perks, designed specifically to set you up for long-term wealth-generating 

success. 

Level 1: $600 monthly expense allowance 

Level 2-3: $10K cash bonus, $1,500 car allowance 

Level 4: $25K cash bonus 

Level 5: $50K cash bonus with automobile upgrade option 

Level 6: $5K monthly house payment 

Level 7-10: Monthly retirement bonus up to $25K, monthly bonus from 

$100K-$250K 

• HOW IT WORKS: 

As an Independent Agent, you have the ability to share the suite of wealthbuilding products with your network, either online or in person. 

 Earn direct commissions for each sale 

 Build a team and earn weekly residual bonuses 

 Qualify for free services and products 

22 
 

 

 

 

 

 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.23 Filed 05/23/22 Page 23 of 

48 

41. Defendants and their agents also depict purported success stories of 

consumers who became FES Agents. The testimonials include the following 

statements: 

• As a wife, mom of four growing boys and one disabled, I needed an 

opportunity that would give me more income and time flexibility with my 

family. While I did make a lot of money with my first work from-home 

opportunity, I didn't get time with family like I wanted. Then, a Friend 

introduced me to FES after a financial crisis hit my family...I’m forever 

grateful because I really needed the services! Now, it's been five years since 

I said “YES to FES” and my life has truly changed! I’ve become Pinnacle 

Senior Vice President, earned the Bentley, house payment and numerous 

company cruises. 

• Never in a million years did we hope or dream that there could be an 

opportunity that would potentially replace my Six Figure Real Estate 

income, create a secure lifestyle, an at the same time build a legacy for my 

family. 

• I’m a high school drop out. Worked at a call center for over 10 years. Relied 

on payday loans. Overworked and under paid. I was struggling financially. 

Got started with FES. My finances drastically changed. I was able to have 

the time freedom I wanted. Fast forward. I was able to purchase the car I 

wanted and the condo I wanted. I am living life on my own terms. FES has 

changed my family tree. We are the first millionaires in our family. 

• [photo of what purports to be five FES Agents with the accompanying 

statement:] 2020 AVERAGE INCOME $214,329 

• [Slide from YouTube video presentation:] We joined FES a little over 15 

months ago. Getting Laid off as a P.E. Teacher. My wife and I didn’t have 

money saved, took a chance at what I believed would be just some extra 

income for us. Fast forward to now, we’ve been blessed to become Six 

figure earners, be awarded a free Audi, cruise contest winners, and hit level 

two in the R&R Club. Our life has changed drastically! 

23 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.24 Filed 05/23/22 Page 24 of 

48 

• Knew this was coming!!!! This single mom moved to Atlanta 4 years ago, 

retired hair stylist slept on a friends [sic] couch fast forward to joining our 

company and becoming a millionaire! I posted her getting her G wagon last 

year and now it’s paid off! She can legit sell this for 280k IF she were to 

ever go broke and need cash! . . . Wealth is the goal!!!! 

#unitedwealtheducation 

Defendants’ Deceptive Telemarketing Activity 

42. When consumers speak with Defendants’ representatives regarding 

Defendants’ credit repair services, typically by telephone, the representatives 

often also try to recruit consumers to become FES Agents. In other instances, 

consumers are invited to participate in telephonic conferences, such as Zoom 

calls or Facebook Live videos. During these calls, Defendants’ 

representatives make many of the same representations included on 

Defendants’ websites and social media accounts. For example, in numerous 

instances, Defendants’ representatives state that consumers who become FES 

Agents will make commissions on recruitment of additional consumers to 

become FES Agents as well as from purchases by consumers of credit repair 

services. In numerous instances, Defendants’ representatives claim 

consumers can earn thousands of dollars per week or tens of thousands of 

dollars per month as an FES Agent. Defendants’ representatives also entice 

consumers by stating that FES Agents who rise high enough can get rewards 

like a new car. 

24 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.25 Filed 05/23/22 Page 25 of 

48 

Defendants’ COVID-Related Claims 

43. Defendants and their agents have also made numerous recent statements that 

prey on consumers’ fears regarding the COVID-19 pandemic and its financial 

effects as reason for enrolling in their investment opportunity. For example, 

in YouTube video presentations, Defendants and their agents have made 

statements regarding the benefits of Defendants’ investment opportunity such 

as: 

• You can imagine during Covid how many restaurant owners, how many 

different people that have brick and mortars lost money because of that. 

And so I like to joke and tell people, but it’s true, in this day and age it’s not 

brick and mortar, everything is click and mortar. And so you gotta figure it 

out, right? And so this is the best way. 

• And I just heard a sad story you know the other day, you know somebody 

that never had COVID, went and got you know the shot, and the second 

shot, they ended up dying. And so you know tell somebody, if anything 

tonight that you guys gain from this, tell your family, friends, and loved ones 

you love them. Because you never know when you’re gonna see them. So 

United Wealth Education, right, we provide agents the ability to build a 

business by marketing innovative financial literacy tools and products and 

services from the comfort of your phone or home. 

• Well first of all, because of COVID, I lost my job. So I had no job. Then I 

started working as a driver, long hours, low paying, not really worth it. . . . 

Actually I got sick, missed a month back, I was really down low, had barely 

money. . . had to max out my credit cards. So that reason, my cousin’s wife, 

she’s a Sales Director right now, she introduced me to the company. 

25 
 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.26 Filed 05/23/22 Page 26 of 

48 

Signup Process 

44. In order to become an FES Agent, Defendants require consumers to pay an 

upfront fee of $299. The fee consists of a one-time “set up” fee, purportedly 

to cover administrative costs associated with setting up the FES Agent’s 

business. In addition, Defendants require consumers who want to become 

FES Agents to enroll in Defendants’ credit repair services if they have not 

already done so, regardless of the prospective FES Agent’s credit score. The 

first month’s fee of $89 is added to the administrative fee. FES Agents then 

pay $89 per month thereafter (although in more recent instances, the monthly 

fee drops to $69 per month after three months, and then to $49 per month 

after one year). Defendants inform FES Agents, however, that if they recruit 

and maintain a certain number of new FES Agents in a month, the next 

month’s fee will be waived. 

45. Defendants require consumers to provide their financial information, 

including their credit or debit card number or account routing number and 

bank account number, on the phone. 

Defendants Provide Consumers with Deceptive Advertising Materials 

46. In numerous instances after signing up, Defendants provide new FES Agents 

with marketing materials necessary for FES Agents to market Defendants’ 

credit repair services and recruit additional FES Agents. For example, in 

numerous instances, consumers are provided with scripts to use when 

26 
 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.27 Filed 05/23/22 Page 27 of 

48 

speaking with consumers for both credit repair and agent recruitment. 

Defendants also provide consumers with ads for consumers to post on their 

social media accounts. 

47. Defendants also provide numerous training sessions, including Zoom calls 

and Facebook Live videos (and often in group format), in which consumers 

are provided strategies and techniques both to market credit repair services 

and recruit new agents. 

48. In numerous instances, these marketing materials contain many of the 

deceptive statements described in Paragraphs 19-27 and 38-43 above. 

Defendants’ Investment Opportunity Is an Illegal Pyramid Scheme 

49. FES Agents are eligible to receive payment through a myriad of commissions 

and bonuses that incentivize recruiting new FES Agents over the sale of credit 

repair services. In addition, Defendants’ representatives often emphasize the 

importance of recruiting new agents in communications with consumers. 

Defendants’ trainings also focus more on, and emphasize, how to recruit new 

agents over selling credit repair services. 

50. Defendants explain their commissions and bonuses in a compensation plan 

they provide to prospective and new FES Agents, which is often described 

during calls with Defendants’ representatives or during training sessions. 

51. The first way FES Agents are purportedly eligible to be paid is through 

commissions on purchases by consumers of credit repair services. An FES 

27 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.28 Filed 05/23/22 Page 28 of 

48 

Agent earns a $12 commission for each person who enrolls in Defendants’ 

credit repair services, and $12 each month thereafter as long as the person 

continues to make his or her payments to Defendants. 

52. The second, and main, way FES Agents are purportedly eligible to be paid is 

by creating “lineage organizations” and “building a team.” This is commonly 

referred to as a “downline.” By urging FES Agents to create lineage 

organizations and build a team, Defendants stress that an FES Agent has the 

ability to make significantly more money by recruiting new agents. Through 

the combination of new agent recruitment and purchases of credit repair 

services, FES Agents can achieve “titles” and trigger “bonuses.” 

53. When first recruited, an FES Agent is called an “agent” and makes the base 

amount of commission on purchases by consumers of credit repair services. 

By meeting specific requirements, FES Agents can go through a series of 

promotions from agent, to field trainer, to senior field trainer, to sales 

director, to regional sales director, to executive sales director, to vice 

president, to regional vice president, to executive vice president, to senior 

vice president, to senior regional vice president, to senior executive vice 

president, and culminating in pinnacle senior vice president. A higher title 

corresponds to more money paid out on bonuses. 

54. Each title has its own prerequisites to achieving it, but each one essentially 

boils down to needing a larger number of people in an FES Agent’s downline, 

28 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.29 Filed 05/23/22 Page 29 of 

48 

a certain number of downline FES Agents having achieved their own titles, 

and a certain dollar amount in personal credit repair services revenue each 

month. For example, to move from “agent” to “field trainer,” an FES Agent 

needs to have two FES Agents in his or her downline (each referred to as a 

“leg”), with each downline FES Agent bringing in a minimum of $400 in 

monthly revenue and the FES Agent and the downline FES Agents together 

bringing in a minimum of $1,600 in monthly revenue. To become a “senior 

field trainer,” in addition to an increase in the dollar amount of monthly 

revenue, the FES Agent needs to have both downline FES Agents themselves 

become “field trainers” (i.e., each must have recruited an additional two FES 

Agents). Nothing in the compensation plan requires that some or all of the 

monthly revenue requirements be met through sales to non-participants. Thus 

FES Agents have the ability to meet the requirement solely through purchases 

of credit repair services by themselves and other FES Agents, including in the 

form of continued payment of monthly fees for credit repair services. 

55. Defendants explain to consumers that if an FES Agent establishes a strong 

enough set of “teams” in his or her downline that are consistently performing 

at a high level (i.e., in terms of new agent recruitment and purchases of credit 

repair services), the FES Agent at the top can maintain a high title on a 

monthly basis (and all commensurate bonuses) without having to do very 

much personal work. 

29 
 

 

 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.30 Filed 05/23/22 Page 30 of 

48 

56. Defendants explain that FES Agents can earn bonuses when a qualified FES 

Agent enrolls a new FES Agent who produces a certain minimum of personal 

revenue within a specific time frame. If those conditions are met, the 

enrolling FES Agent and any upline FES Agents receive bonuses. Additional 

bonuses are available to FES Agents who achieve higher titles and provide 

significantly more money to those with larger downlines. The amounts of the 

bonuses increase significantly as the FES Agent earns higher titles, further 

emphasizing that the most lucrative rewards come from recruiting new FES 

Agents rather than the purchase by non-agents of credit repair services. For 

example, Defendants purport to pay what they call a “customer acquisition 

bonus” or “CAB” that is generated when an FES Agent enrolls a new agent. 

“Agents” typically receive a CAB of $100, “field trainers” receive $160, 

“senior field trainers” receive $240, and “pinnacle senior vice presidents” 

receive $560. Another bonus is called the “infinity bonus” that starts for FES 

Agents who rise to the “sales director” level. The infinity bonus is a 

percentage of the revenue brought in by the FES Agent’s entire downline. A 

“sales director” typically gets an infinity bonus of 0.5%, a “regional sales 

director” receives 0.75%, and so on up to “pinnacle senior vice presidents” 

who receive 3% of his or her downline’s revenue. Meanwhile, “generation 

bonuses” start at the “executive sales director” level and typically pay an 

additional 1% (going up to 2.75% for “pinnacle senior vice president”). 

30 
 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.31 Filed 05/23/22 Page 31 of 

48 

57. Defendants and their agents often encourage FES Agents to “sponsor” new 

recruits, i.e., if a potential recruit is unwilling to pay the $288 sign-up fee, the 

FES Agent should pay some or all of those fees on the recruit’s behalf in 

order to inflate artificially the original FES Agent’s downline and qualify the 

FES Agent for bonuses or other compensation. 

58. Many FES Agents, to remain FES Agents, continue to pay the monthly credit 

repair fee and many FES Agents are encouraged to pay, and do pay, 

registration fees for new FES Agents to improve their downline. As a result, 

in many instances, FES Agents end up paying more money to Defendants 

than they receive from them. 

59. In some instances, Defendants do not pay promised bonuses to FES Agents. 

60. In numerous instances, consumers do not realize the earnings promised by 

Defendants, and many consumers lose money as FES Agents. 

Consumer Harm 

61. Defendants have collected at least $213,000,000 from consumers through 

their unlawful credit repair and investment opportunity scheme in the three 

years prior to the filing of this Complaint. 

Ongoing Nature of Defendants’ Unlawful Practices 

62. Based on the facts and violations of law alleged in this Complaint, the FTC 

has reason to believe that Defendants are violating or are about to violate laws 

enforced by the FTC. 

31 
 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.32 Filed 05/23/22 Page 32 of 

48 

VIOLATIONS OF THE FTC ACT 

63. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive 

acts or practices in or affecting commerce.” 

64. Misrepresentations or deceptive omissions of material fact constitute 

deceptive acts or practices prohibited by Section 5(a) of the FTC Act. 

COUNT I 

Misrepresentations Regarding Credit Repair Services 

65. In numerous instances, in connection with the advertising, marketing, 

promotion, offering for sale, or sale of credit repair services, Defendants have 

represented, directly or indirectly, expressly or by implication, that 

Defendants will significantly improve consumers’ credit scores by, among 

other things, removing negative information permanently from consumers’ 

credit reports or profiles or adding positive payment history to consumers’ 

credit reports or profiles. 

66. In truth and in fact, in numerous instances in which Defendants have made 

the representations set forth in Paragraph 65 of this Complaint, such 

representations were false or misleading or not substantiated at the time 

Defendants made them. 

67. Therefore, Defendants’ making of the representations as set forth in 

Paragraph 65 constitutes a deceptive act or practice in violation of Section 

5(a) of the FTC Act, 15 U.S.C. § 45(a). 

32 
 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.33 Filed 05/23/22 Page 33 of 

48 

COUNT II 

Illegal Pyramid 

68. Defendants operate or promote participation in a scheme in which consumers 

pay money to Defendants in return for which they receive (1) the right to 

market and sell Defendants’ credit repair services, and (2) in return for 

recruiting other consumers to sell Defendants’ credit repair services, the right 

to receive rewards that are unrelated to the sale of credit repair services to 

ultimate users. 

69. Defendants’ operation or promotion of this type of scheme, often referred to 

as a pyramid scheme, constitutes a deceptive act or practice in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT III 

Misrepresentations Regarding Investment Opportunities 

70. In numerous instances, in connection with the advertising, marketing, 

promotion, offering for sale, or sale of investment opportunities, Defendants 

have represented, directly or indirectly, expressly or by implication, that 

consumers who become agents of Defendants are likely to earn substantial 

income. 

71. In truth and in fact, in numerous instances in which Defendants have made 

the representations set forth in Paragraph 70 of this Complaint, such 

representations were false or misleading or not substantiated at the time 

Defendants made them. 

33 
 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.34 Filed 05/23/22 Page 34 of 

48 

72. Therefore, Defendants’ making of the representations as set forth in 

Paragraph 70 constitutes a deceptive act or practice in violation of Section 

5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT IV 

Means and Instrumentalities 

73. By furnishing consumers with promotional materials and instructions to be 

used in recruiting other consumers to purchase Defendants’ credit repair 

services and investment opportunities that contain false, misleading, or 

unsubstantiated representations, Defendants have provided the means and 

instrumentalities for the commission of deceptive acts and practices. 

74. Therefore, Defendants’ practices as set forth in Paragraph 73 constitute 

deceptive acts or practices in violation of in violation of Section 5(a) of the 

FTC Act, 15 U.S.C. § 45(a). 

VIOLATIONS OF THE CREDIT REPAIR ORGANIZATIONS ACT 

75. The Credit Repair Organizations Act took effect on April 1, 1997, and has 

since that date remained in full force and effect. 

76. The purposes of CROA, according to Congress, are (1) to ensure that 

prospective buyers of the services of credit repair organizations are provided 

with the information necessary to make an informed decision regarding the 

purchase of such services; and (2) to protect the public from unfair or 

34 
 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.35 Filed 05/23/22 Page 35 of 

48 

deceptive advertising and business practices by credit repair organizations. 

15 U.S.C. § 1679(b). 

77. CROA defines a “credit repair organization” as “any person who uses any 

instrumentality of interstate commerce or the mails to sell, provide, or 

perform (or represent that they can or will sell, provide, or perform) any 

service, in return for the payment of money or other valuable consideration, 

for the express or implied purpose of . . . improving any consumers’ credit 

record, credit history, or credit rating. . . .” 15 U.S.C. § 1679a(3). 

78. Defendants are a “credit repair organization.” 

79. CROA prohibits all persons from making or using any untrue or misleading 

representation of the services of the credit repair organization. 15 U.S.C. § 

1679b(a)(3). 

80. CROA prohibits credit repair organizations from charging or receiving any 

money or other valuable consideration for the performance of any service 

which the credit repair organization has agreed to perform before such service 

is fully performed. 15 U.S.C. § 1679b(b). 

81. CROA requires credit repair organizations to provide consumers with a 

written statement containing prescribed language concerning “Consumer 

Credit File Rights Under State and Federal Law” before any contract or 

agreement is executed. 15 U.S.C. § 1679c(a). 

35 
 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.36 Filed 05/23/22 Page 36 of 

48 

82. CROA prohibits credit repair organizations from providing any services to a 

consumer unless the credit repair organization has obtained a written and 

dated contract that has been signed by the consumer. 15 U.S.C. § 1679d(a). 

83. CROA requires credit repair organizations to include the following terms and 

conditions in their contracts for services: (1) the terms and conditions of 

payment, including the total amount of all payments to be made by the 

consumer to the credit repair organization or to any other person, (2) a full 

and detailed description of the credit repair services to be performed by the 

credit repair organization for the consumer, including (a) all guarantees of 

performance, and (b) an estimate of (i) the date by which the performance of 

the services (to be performed by the credit repair organization or any other 

person) will be complete or (ii) the length of the period necessary to perform 

such services; (3) the credit repair organization’s name and principal business 

address; and (4) a conspicuous statement in bold face type, in immediate 

proximity to the space reserved for the consumer’s signature on the contract, 

which reads as follows: “You may cancel this contract without penalty or 

obligation at any time before midnight of the 3rd business day after the date on 

which you signed the contract. See the attached notice of cancellation form 

for an explanation of this right.” 15 U.S.C. § 1679d(b). 

84. CROA requires credit repair organizations to provide consumers with a 

“Notice of Cancellation” form, in duplicate, containing prescribed language 

36 
 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.37 Filed 05/23/22 Page 37 of 

48 

concerning consumers’ three-day right to cancel that consumers can use to 

cancel the contract. 15 U.S.C. § 1679e(b). 

85. CROA requires that any consumer who enters into a contract with a credit 

repair organization shall be given a copy of the completed contract and all 

disclosures required under the Act and a copy of any other document the 

credit repair organization requires the consumer to sign. 15 U.S.C. § 

1679e(c). 

86. Pursuant to Section 410(b)(1) of CROA, 15 U.S.C. § 1679h(b)(1), any 

violation of any requirement or prohibition of CROA constitutes an unfair or 

deceptive act or practice in commerce in violation of Section 5(a) of the FTC 

Act, 15 U.S.C. § 45(a). Pursuant to Section 410(b)(2) of CROA, 15 U.S.C. § 

1679h(b)(2), all functions and powers of the FTC under the FTC Act are 

available to the FTC to enforce compliance with CROA in the same manner 

as if the violation had been a violation of any FTC trade regulation rule. 

Section 19(a)(1) of the FTC Act, 15 U.S.C. § 57b(a)(1), provides that the FTC 

may commence a civil action against “any person, partnership, or 

corporation” who “violates any rule . . . respecting unfair or deceptive acts or 

practices.” Section 19(b) of the FTC Act, 15 U.S.C. § 57b(b), provides that in 

any action commenced under Section 19(a)(1), the court “shall have 

jurisdiction to grant such relief as the court finds necessary to redress injury to 

consumers, including but not limited to rescission or reformation of contracts, 

37 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.38 Filed 05/23/22 Page 38 of 

48 

and the refund of money or return of property, the payment of damages, and 

public notification.” 

COUNT V 

Misrepresentations Regarding Credit Repair Services 

87. In numerous instances, in connection with the advertising, marketing, 

promotion, offering for sale, or sale of services to consumers by a credit 

repair organization, as that term is defined in Section 403(3) of CROA, 15 

U.S.C. § 1679a(3), Defendants have made untrue or misleading 

representations to consumers, including that Defendants will significantly 

improve consumers’ credit scores by, among other things removing negative 

information permanently from consumers’ credit reports or adding positive 

payment history to consumers’ credit reports or profiles. 

88. Therefore, Defendants’ acts or practices as set forth in Paragraph 87 violate 

Section 404(a)(3) of CROA, 15 U.S.C. § 1679b(a)(3). 

COUNT VI 

Violation of Prohibition against Charging Advanced Fees for Credit Repair 

Services 

89. In numerous instances, in connection with the advertising, marketing, 

promotion, offering for sale, or sale of services to consumers by a credit 

repair organization, as that term is defined in Section 403(3) of CROA, 15 

U.S.C. § 1679a(3), Defendants have charged or received money or other 

valuable consideration for the performance of credit repair services that 

38 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.39 Filed 05/23/22 Page 39 of 

48 

Defendants have agreed to perform before such services were fully 

performed. 

90. Therefore, Defendants’ acts or practices as set forth in Paragraph 89 violate 

Section 404(b) of CROA, 15 U.S.C. § 1679b(b). 

COUNT VII 

Failure to Make Required Disclosures 

91. In numerous instances, in connection with the sale of services to consumers 

by a credit repair organization, as that term is defined in Section 403(3) of 

CROA, 15 U.S.C. § 1679a(3), Defendants have failed to provide a written 

statement of “Consumer Credit File Rights Under State and Federal Law,” in 

the form and manner required by CROA, to consumers before any contract or 

agreement was executed. 

92. Therefore, Defendants’ acts or practices as set forth in Paragraph 91 violate 

Section 405(a) of CROA, 15 U.S.C. § 1679c(a). 

COUNT VIII 

Failure to Obtain Signed Contracts from Consumers 

93. In numerous instances, in connection with the sale of services to consumers 

by a credit repair organization, as that term is defined in Section 403(3) of 

CROA, 15 U.S.C. § 1679a(3), Defendants have provided services to 

consumers without first having obtained a written and dated contract for the 

purchase of credit repair services that has been signed by consumers. 

39 
 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.40 Filed 05/23/22 Page 40 of 

48 

94. Therefore, Defendants’ acts or practices as set forth in Paragraph 93 violate 

Section 406(a) of CROA, 15 U.S.C. § 1679d(a). 

COUNT IX 

Failure to Include Required Terms and Conditions in Contracts 

95. In numerous instances, in connection with the sale of services to consumers 

by a credit repair organization, as that term is defined in Section 403(3) of 

CROA, 15 U.S.C. § 1679a(3), Defendants have failed to include in their 

consumer contracts the following required terms and conditions: (1) the 

terms and conditions of payment, including the total amount of all payments 

to be made by the consumer to Defendants or to any other person, (2) a full 

and detailed description of the credit repair services to be performed by 

Defendants for the consumer, including (a) all guarantees of performance, and 

(b) an estimate of (i) the date by which the performance of the services (to be 

performed by Defendants or any other person) will be complete or (ii) the 

length of the period necessary to perform such services; (3) Defendants’ name 

and principal business address; or (4) the specific conspicuous statement in 

bold face type, in immediate proximity to the space reserved for the 

consumer’s signature on the contract, regarding the consumers’ right to cancel 

the contracts without penalty or obligation at any time before the third 

business day after the date on which consumers signed the contracts. 

40 
 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.41 Filed 05/23/22 Page 41 of 

48 

96. Therefore, Defendants’ acts or practices as set forth in Paragraph 95 violate 

Section 406(b) of CROA, 15 U.S.C. § 1679d(b). 

COUNT X 

Failure to Provide Cancellation Form 

97. In numerous instances, in connection with the sale of services to consumers 

by a credit repair organization, as that term is defined in Section 403(3) of 

CROA, 15 U.S.C. § 1679a(3), Defendants have failed to provide with their 

consumer contracts a form with the heading “Notice of Cancellation,” in the 

form and manner required by CROA to consumers. 

98. Therefore, Defendants’ acts or practices as set forth in Paragraph 97 violate 

Section 407(b) of CROA, 15 U.S.C. § 1679e(b). 

COUNT XI 

Failure to Provide Consumers with Copy of Contract and Other Disclosures 

99. In numerous instances, in connection with the sale of services to consumers 

by a credit repair organization, as that term is defined in Section 403(3) of 

CROA, 15 U.S.C. § 1679a(3), Defendants have failed to provide consumers 

who entered into a contract with Defendants a copy of the completed contract 

and all disclosures required under CROA and a copy of any other document 

Defendants required the consumers to sign. 

100. Therefore, Defendants’ acts or practices as set forth in Paragraph 99 violate 

Section 407(c) of CROA, 15 U.S.C. § 1679e(c). 

41 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.42 Filed 05/23/22 Page 42 of 

48 

VIOLATIONS OF THE TELEMARKETING SALES RULE 

101. In 1994, Congress directed the FTC to prescribe rules prohibiting abusive and 

deceptive telemarketing acts or practices pursuant to the Telemarketing Act, 

15 U.S.C. §§ 6101-6108. The FTC adopted the original Telemarketing Sales 

Rule in 1995, extensively amended it in 2003, and amended certain sections 

thereafter. 16 C.F.R. Part 310. 

102. Under the TSR, a “telemarketer” means any person who, in connection with 

telemarketing, initiates or receives telephone calls to or from a consumer or 

donor. 16 C.F.R. § 310.2(ff). A “seller” means any person who, in 

connection with a telemarketing transaction, provides, offers to provide, or 

arranges for others to provide goods or services to the customer in exchange 

for consideration. 16 C.F.R. § 310.2(dd). 

103. Defendants are “seller[s]” or “telemarketer[s]” engaged in “telemarketing,” as 

those terms are defined in the TSR, 16 C.F.R. § 310.2(dd), (ff), and (gg). 

104. The TSR defines “investment opportunity[ies]” to mean “anything, tangible 

or intangible, that is offered, offered for sale, sold, or traded based wholly or 

in part on representations, either express or implied, about past, present, or 

future income, profit, or appreciation. 16 C.F.R. § 310.2(s). 

105. The TSR prohibits sellers and telemarketers from misrepresenting, directly or 

by implication, any material aspect of the performance, efficacy, nature, or 

42 
 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.43 Filed 05/23/22 Page 43 of 

48 

central characteristics of goods or services that are the subject of a sales offer. 

16 C.F.R. § 310.3(a)(2)(iii). 

106. The TSR prohibits sellers and telemarketers from misrepresenting, directly or 

by implication, any material aspect of an investment opportunity, including 

but not limited to, risk, liquidity, earnings potential, or profitability. 16 

C.F.R. § 310.3(a)(2)(vi). 

107. The TSR prohibits sellers and telemarketers from requesting or receiving 

payment of any fee or consideration for goods or services represented to 

remove derogatory information from, or improve, a person’s credit history, 

credit record, or credit rating until: (a) the time frame in which the seller has 

represented all of the goods or services will be provided to that person has 

expired; and (b) the seller has provided the person with documentation in the 

form of a consumer report from a consumer reporting agency demonstrating 

that the promised results have been achieved, such report having been issued 

more than six months after the results were achieved. 16 C.F.R. § 

310.4(a)(2). 

108. The TSR prohibits sellers and telemarketers from creating or causing to be 

created, directly or indirectly, a remotely created payment order as payment 

for goods or services offered or sold through telemarketing. 16 C.F.R. § 

310.4(a)(9). A remotely created payment order includes a remotely created 

check. 16 C.F.R. § 310.2(cc). 

43 
 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.44 Filed 05/23/22 Page 44 of 

48 

109. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. § 6102(c), and 

Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of the 

TSR constitutes an unfair or deceptive act or practice in or affecting 

commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

Section 19(a)(1) of the FTC Act, 15 U.S.C. § 57b(a)(1), provides that the FTC 

may commence a civil action against “any person, partnership, or 

corporation” who “violates any rule . . . respecting unfair or deceptive acts or 

practices.” Section 19(b) of the FTC Act, 15 U.S.C. § 57b(b), provides that in 

any action commenced under Section 19(a)(1), the court “shall have 

jurisdiction to grant such relief as the court finds necessary to redress injury to 

consumers, including but not limited to rescission or reformation of contracts, 

the refund of money or return of property, the payment of damages, and 

public notification.” 

COUNT XII 

Misrepresentations Regarding Credit Repair Services 

110. In numerous instances, in connection with the telemarketing of credit repair 

services, Defendants have misrepresented, directly or by implication, material 

aspects of the performance, efficacy, nature, or central characteristics of their 

credit repair services, including but not limited to, that Defendants will 

significantly improve consumers’ credit scores by, among other things 

removing negative information permanently from consumers’ credit reports 

44 
 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.45 Filed 05/23/22 Page 45 of 

48 

or profiles or adding positive payment history to consumers’ credit reports or 

profiles. 

111. Therefore, Defendants’ acts or practices as set forth in Paragraph 110 violate 

Section 310.3(a)(2)(iii) of the TSR, 16 C.F.R. § 310.3(a)(2)(iii). 

COUNT XIII 

Misrepresentations Regarding Investment Opportunities 

112. In numerous instances, in connection with the telemarketing of investment 

opportunities, Defendants have misrepresented, directly or by implication, 

material aspects of their investment opportunities, including, but not limited 

to, risk, liquidity, earnings potential, or profitability, by, among other things, 

representing that consumers who become agents of Defendants are likely to 

earn substantial income. 

113. Therefore, Defendants’ acts or practices as set forth in Paragraph 112 violate 

Section 310.3(a)(2)(vi) of the TSR, 16 C.F.R. § 310.3(a)(2)(vi). 

COUNT XIV 

Violation of Prohibition against Charging Advanced Fees for Credit Repair 

Services 

114. In numerous instances, in connection with the telemarketing of credit repair 

services, Defendants have requested or received payment of a fee or 

consideration for credit repair services before: (a) the time frame in which 

Defendants have represented all of the credit repair services will be provided 

to consumers has expired; and (b) Defendants have provided consumers with 

45 
 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.46 Filed 05/23/22 Page 46 of 

48 

documentation in the form of a consumer report from a consumer reporting 

agency demonstrating that the promised results have been achieved, such 

report having been issued more than six months after the results were 

achieved. 

115. Therefore, Defendants’ acts or practices as set forth in Paragraph 114 violate 

Section 310.4(a)(2) of the TSR, 16 C.F.R. § 310.4(a)(2). 

COUNT XV 

Use of Remotely Created Checks 

116. In numerous instances, in connection with the telemarketing of credit repair 

services and/or investment opportunities, Defendants have created or caused 

to be created, directly or indirectly, a remotely created payment order as 

payment for credit repair services and/or investment opportunities. 

117. Therefore, Defendants’ acts or practices as set forth in Paragraph 116 violate 

Section 310.4(a)(9) of the TSR, 16 C.F.R. § 310.4(a)(9). 

CONSUMER INJURY 

118. Consumers are suffering, have suffered, and will continue to suffer substantial 

injury as a result of Defendants’ violations of the FTC Act, CROA, and the 

TSR. Absent injunctive relief by this Court, Defendants are likely to continue 

to injure consumers and harm the public interest. 

46 
 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.47 Filed 05/23/22 Page 47 of 

48 

PRAYER FOR RELIEF 

Wherefore, Plaintiff FTC requests that the Court: 

A. Grant preliminary injunctive and ancillary relief as may be necessary 

to avert the likelihood of consumer injury during the pendency of this action and to 

preserve the possibility of effective final relief, including but not limited to, 

temporary and preliminary injunctions, an order freezing assets, immediate access 

to business premises, and appointment of a receiver; 

B. Enter a permanent injunction to prevent future violations of the FTC 

Act, CROA, and the TSR by Defendants; 

C. Award monetary and other relief within the Court’s power to grant; 

and 

D. Award any additional relief as the Court determines to be just and 

proper. 

47 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Case 2:22-cv-11120-BAF-APP *SEALED* ECF No. 1, PageID.48 Filed 05/23/22 Page 48 of 

48 

Dated: May 23, 2022 Respectfully submitted, 

/s/Gregory A. Ashe 

GREGORY A. ASHE 

K. MICHELLE GRAJALES 

JULIA E. HEALD 

Federal Trade Commission 

600 Pennsylvania Avenue NW 

Washington, DC 20580 

Telephone: 202-326-3719 (Ashe) 

Telephone: 202-326-3172 (Grajales) 

Telephone: 202-326-3589 (Heald) 

Facsimile: 202-326-3768 

Email: gashe@ftc.gov, mgrajales@ftc.gov, 

jheald@ftc.gov 

DAWN N. ISON 

United States Attorney 

PETER A. CAPLAN (P30643) 

Assistant United States Attorney 

211 W. Fort Street, Suite 2001 

Detroit, MI 48226 

Telephone: 313-226-9784 

Email: peter.caplan@usdoj.gov 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

48