1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

DONALD PLATTNER, )

)

Plaintiff ) 

) Case No. 03 C 2646

v. ) 

) Judge Joan B. Gottschall

EDGE SOLUTIONS, INC., )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

Donald Plattner (“Plattner”) sued Edge Solutions Inc. (“Edge”) for violations of the

Credit Repair Organizations Act (“CROA”), 15 U.S.C. § 1679, et seq. (Counts I-IV) and for

breach of fiduciary duty (Count V). The parties have filed cross-motions for summary judgment. 

Edge’s motion for summary judgment is granted, and Plattner’s motion for summary judgment is

denied. 

I. Background

Plattner began experiencing financial difficulties following a divorce, and so in

September 2000, he spoke with an Edge “financial counselor” to learn about the Debt Melt

Down Program. On December 19, 2000, Edge sent Plattner a Debt Melt Down Program

Agreement Letter (“Agreement Letter”), along with documentation explaining the Debt Melt

Down Program. On December 22, 2000, Plattner signed the Agreement Letter to participate in

the Debt Melt Down Program. 

The Agreement Letter states: “The program is structured in a way to eliminate your debt

over a period of time through settlement arrangements with your creditors.” Under the heading
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“Creditor Action and Credit Rating Disclosure,” the Agreement Letter states: “It is understood

that no representation about any aspect of your credit rating can be made. Depending upon

circumstances, credit can be enhanced, damaged, or not be altered, but in any case, it is beyond

the control or scope of this program.” Under the heading “Post Debt Meltdown Procedures,” the

Agreement Letter states: 

If the fee paid to Edge is $600.00 or greater, you are entitled to participate in The

Post Closing Credit Restoration Program. The purpose of this program is to

assure that your credit reports properly reflect the settlement and paid accounts

that involved this program. This program is voluntary for you and its success is

dependent upon your proper participation and follow through as directed. Edge

Solutions, Inc. cannot guarantee any specific results with regards to this program.

 

Under the heading “Debt Free Life Membership and Coaching Program,” the Agreement Letter

states that, for a monthly fee, Edge provides coaching about “combating debt problems and

building future wealth.” Richard Mauro, Chief Operations Officer for Edge, testified that this

coaching does not include information on how to repair previously damaged credit, but may

include information on how to reestablish credit, such as obtaining a “passbook loan” or a

“secured credit card.” Mauro Dep., 205:9-21.

Plattner also received a letter titled “How the Debt Melt Down Program Works,” which

he signed on December 22, 2000. This letter states: 

This program cannot make any assurances as to the state of your credit while on

this program. It is likely that your credit score and rating will deteriorate while

on the program. Upon completion of the program, Edge will work with you for

12 months in a best effort rehabilitation of your credit rating.

 

Edge sent another letter (“Dear Customer Letter”), which Plattner signed on December

22, 2000. This letter states: “We will make every attempt to minimize any damage to your credit

while you are on the program, though it is probable for some deterioration to occur. This is not
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unusual and we will help modify it upon completion of the program.”

Plattner also received a document titled “Frequently Asked Questions.” Under the

heading “How Does the Program Effect Credit?” the document states: 

While on the program, the credit, will in all likelihood, [sic] suffer damage that

occurs when accounts are not being paid. Of course, if you are late or delinquent

at present, the difference may be minimal. However, once you are debt free, the

accounts will indicate a paid or settled status. Within 6 to 12 months, you will be

well on your way to total recovery.

Plattner paid Edge $7,000 (in $1,000 monthly installments) until he ceased participating

in August 2001. The monthly installments were deducted directly from Plattner’s bank account.

Edge collected an initial retainer from Plattner of two times the monthly installment, or $2,000. 

Edge also collected fees equal to forty percent of the difference between the amount of the debt

and the settlement amount when each debt was settled, and Edge collected a $50 monthly fee for

the Coaching Program. 

While Plattner was participating in the Debt Melt Down Program, Citibank refused to

settle Plattner’s debt and filed a lawsuit against him. Edge disclaimed representation of Plattner

and recommended that he consider bankruptcy. It is disputed whether Edge told Plattner it

would stop providing him services and Plattner then stopped payment on the monthly

withdrawals from his account, or whether Plattner simply stopped payment without prompting

from Edge. Edge refunded $221.61, the balance in Plattner’s account.

During Plattner’s participation in the program, Edge reached a settlement with

Household, one of Plattner’s creditors. Under the terms of this settlement, Edge was to make six

payments of $676 to Household from Plattner’s account. At the time Plattner ceased

participating in the program, Plattner’s account with Edge reflected that three of the payments
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were made, but Household had only received two. Thus, after Plattner ceased participating in

the program, he made four payments to fulfill his remaining obligation to Household (the three

remaining as well as the one that Edge deducted from his account but that Household never

received). Edge offered to refund the missing payment to Plattner in exchange for Plattner’s

release of any claims against Edge. 

II. Discussion

Summary judgment is granted “if the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any, show that there is no genuine issue as

to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(c). A party opposing summary judgment must “set forth specific facts showing that

there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

There is no genuine issue for trial unless there is “sufficient evidence favoring the non-moving

party for a jury to return a verdict for that party.” Id. The party moving for summary judgment

bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex

Corp. v. Catrett, 477 U.S. 317, 321 (1986).

A. Credit Repair Organization Act (“CROA”)

In the complaint, Plattner alleged four violations of the CROA: (1) that Edge received

compensation before it fully performed the promised services in violation of 15 U.S.C.

§ 1679b(b) (Count I); (2) that Edge did not provide Plattner with the required disclosures under

15 U.S.C. § 1679c prior to entering into the contract for services (Count II); (3) that the contract

between Plattner and Edge did not contain terms required by 15 U.S.C. § 1679d(1) and (4)

(Count III); and (4) that Edge did not provide Plattner with the cancellation form and disclosures
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15 U.S.C. § 1679a(3)(A) states: “The term ‘credit repair organization’ means any person

who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or

represent that such person 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 (i)

improving any consumer’s credit record, credit history, or credit rating; or (ii) providing advice

or assistance to any consumer with regard to any activity or service described in clause (i).”

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required under 15 U.S.C. § 1679e (Count IV).

Edge does not dispute that it failed to comply with the asserted provisions of the CROA;

rather, Edge argues that its compliance was not required because it is not a credit repair

organization within the meaning of the CROA. Plattner argues that Edge meets the definition of

a credit repair organization and is thus liable for its failure to comply with the asserted

provisions of the CROA. 

15 U.S.C. § 1679a(3)(A) states that a “credit repair organization” is an organization that

(1) used any instrumentality of interstate commerce, or the mails, to (2) sell, provide, or perform

(or represent that it could) (3) in return for valuable consideration (4) services or advice about

services designed to improve a consumer’s credit record, credit history, or credit rating. Costa v.

Mauro Chevrolet, Inc., 390 F. Supp. 2d 720, 727 (N.D. Ill. 2005).1

 It is undisputed that Edge

used instrumentalities of interstate commerce and the mails in communicating with Plattner and

that Edge received consideration for the services that it provided to Plattner. Edge argues,

however, that it did not sell, provide, or perform (or represent that it could) services or advice

about services designed to improve a consumer’s credit record, credit history, or credit rating.

The statutory definition of a credit repair organization is extremely broad. It reaches

“any person” who uses an instrumentality of interstate commerce to perform services with,

among other things, an “implied purpose” of improving a consumer’s credit record. Since any
2

Accordingly, the parties cite almost no case law in their briefs. The court notes that, in

several cases discussing the statutory definition of a credit repair organization, the courts

ultimately held that the defendant could be liable whether or not the defendant was a credit repair

organization. In those cases, however, the plaintiff alleged violations of 15 U.S.C. § 1679b(a),

which states that “[n]o person may” violate the provisions of that section; hence, the courts held

that person is broader than credit repair organization, and that a finding that the defendant was a

credit repair organization was required for liability. See, e.g., Costa v. Mauro Chevrolet, Inc.,

390 F. Supp. 2d 720, 727 (N.D. Ill. 2005) (citing 15 U.S.C. § 1679b(a)) (emphasis added). 

Plattner did not plead any violations of 15 U.S.C. § 1679b(a). 

Here, the provisions Plattner alleged that Edge violated (15 U.S.C. § 1679b(b), § 1679c,

§ 1679d, and § 1679e) expressly limit their prohibitions and requirements to credit repair

organizations. Thus, much of the existing case law does not provide the court with any

assistance in determining whether Edge is a credit repair organization, the determinative issue in

this case. 

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debt management or counseling activity can be seen as having credit improvement as an implied

purpose, some sense of the problem Congress intended to address with this statute is necessary to

understand its appropriate limits. Case law interpreting the definition of a credit repair

organization under the CROA is scarce.2 Hence, the court will first review the legislative history

of the CROA and then evaluate the representations Edge made to Plattner in light of the statutory

language and the purposes of the statute.

1. Congressional Intent

As part of the CROA, Congress codified its findings and its purposes. 15 U.S.C. § 1679.

The findings state: 

(1) Consumers have a vital interest in establishing and maintaining their

credit worthiness and credit standing in order to obtain and use credit. As a

result, consumers who have experienced credit problems may seek assistance

from credit repair organizations which offer to improve the credit standing of

such consumers.

(2) Certain advertising and business practices of some companies engaged

in the business of credit repair services have worked a financial hardship upon

consumers, particularly those of limited economic means and who are

inexperienced in credit matters.
3

The court acknowledges that another court in this district has stated: “In enacting the

[Consumer Credit Protection Act], of which the CROA is part of, Congress intended for courts to

broadly construe its provisions in accordance with its remedial purpose.” Parker v. 1-800 Bar

None, a Financial Corp., Inc., No. 01 C 4488, 2002 WL 215530, at *2 (N.D. Ill. Feb. 12, 2002)

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15 U.S.C. § 1679(a). The purposes of the CROA 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 deceptive advertising and business

practices by credit repair organizations.

15 U.S.C. § 1679(b). 

In addition to the codified findings and purposes contained in 15 U.S.C. § 1679, the

House Report also sheds light on Congress’ purpose and intent in enacting the CROA. That

Report states: 

The credit repair business involves the marketing of credit repair services to

consumers whose consumer reports contain adverse information that interferes

with their ability to obtain credit. According to the FTC, these businesses, through

advertisements and oral representations, lead consumers to believe that adverse

information in their consumer reports can be deleted or modified regardless of its

accuracy. . . . [S]uch representations by credit repair clinics are often misleading,

and consumers, mostly low- and moderate-income individuals, are cheated out of

the money they paid for services. 

H.R. Rep. No. 103-486, at 57 (1994). The Report further states that credit repair companies

often “inundat[e] consumer reporting agencies with so many challenges to consumer reports that

the reinvestigation system breaks down, and the adverse, but accurate, information is deleted.” 

Id. “[The CROA] seeks to regulate the industry to ensure that consumers are provided with

necessary information about credit repair organizations so that they can make informed decisions

regarding the purchase of their services and to protect the public from unfair and deceptive

advertising and business practices by the industry.” Id.3

 
(citing Brothers v. First Leasing, 724 F.2d 789, 793 (9th Cir. 1984)). “Moreover, courts should

construe consumer protection statutes liberally in favor of consumers.” Id. (citing Bizier v.

Globe Fin. Serv., Inc., 654 F.2d 1, 3 (1st Cir. 1981)) (internal quotation omitted). The cases

cited by the court in Parker, however, were decided prior to the enactment of the CROA. Given

that Congress codified its findings and purposes as part of the CROA, it is proper for the court to

interpret the CROA in light of Congress’ expressed intent. 

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2. The Representations Made by Edge

Whether a company is a credit repair organization under the CROA depends on the

representations made. See Polacsek v. Debticated Consumer Counseling, Inc., No. Civ. PJM 04-

631, 2005 WL 3750247, at *6 (D. Md. Nov. 23, 2005) (stating that a credit counseling agency

may be covered by the CROA “[d]epending upon the allegations of the Complaint”). The

representations made by Edge are not in dispute, although the parties interpret the

representations differently. The representations made by Edge can be divided into three

categories: (1) the Debt Melt Down Program, (2) Debt Free Life Membership and Coaching

Program, and (3) the Post Closing Credit Restoration Program. As discussed above, to be a

credit repair organization, Edge must have (1) used any instrumentality of interstate commerce,

or the mails, to (2) sell, provide, or perform (or represent that it could) (3) in return for valuable

consideration (4) services or advice about services designed to improve a consumer’s credit

record, credit history, or credit rating. Costa, 390 F. Supp. 2d at 727 (citing 15 U.S.C.

§ 1679a(3)). 

The allegations of the complaint do not suggest that Edge was a credit repair organization

when it provided the Debt Melt Down Program. The Debt Melt Down Program documents make

clear that participation in this program will likely result in damage to the participant’s credit. 
4

The Agreement Letter stated, under the heading “Creditor Action and Credit Rating

Disclosure”: “It is understood that no representation about any aspect of your credit rating can be

made. Depending upon circumstances, credit can be enhanced, damaged, or not be altered, but

in any case, it is beyond the control or scope of this program.” The letter captioned “How the

Debt Melt Down Program Works” stated: “This program cannot make any assurances as to the

state of your credit while on this program. It is likely that your credit score and rating will

deteriorate while on the program.” The Dear Customer Letter stated: “We will make every

attempt to minimize any damage to your credit while you are on the program, though it is

probable for some deterioration to occur.” The Frequently Asked Questions document stated:

“While on the program, the credit, will in all likelihood, suffer damage that occurs when

accounts are not being paid.” 

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They also make clear that the participant’s credit is outside the scope of the program.4

 Thus, in

offering to provide the Debt Melt Down Program, Edge did not represent or even imply that this

program was designed to improve the participant’s credit as required for Edge to be a credit

repair organization.

 Nor was Edge a credit repair organization when it provided the Debt Free Life

Membership and Coaching Program. The Agreement Letter stated that, for a monthly fee, Edge

provides coaching about “combating debt problems and building future wealth.” Richard

Mauro, Chief Operations Officer for Edge, testified that this coaching does not include

information on how to repair previously damaged credit, but may include information on how to

reestablish credit, such as obtaining a “passbook loan” or a “secured credit card.” Mauro Dep.,

205:9-21.

Plattner argues that the definition of a “credit repair organization” encompasses any

entity that suggests that its services or advice might ultimately result in an improved credit

rating. As indicated above, Plattner’s reading is arguably consistent with the broadest possible

interpretation of the statutory language, but in light of the findings and purposes contained in

§ 1679, as well as the concerns expressed in the legislative history, there is no reason to believe
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that such a broad definition was intended by Congress. At least one court has held that a credit

counseling organization acting purely as a credit counseling organization is not a credit repair

organization because “[l]egitimate credit counseling, which endeavors to gradually improve

clients’ credit by encouraging creditworthy behavior going forward, is distinct from illegitimate

forms of credit repair in which clients are given false hopes of absolution for confessed past

credit sins.” Limpert v. Cambridge Credit Counseling Corp., 328 F. Supp. 2d 360, 364

(E.D.N.Y. 2004). Were Plattner correct, any entity that endeavored to assist consumers in

paying their debts would, because debt payment assistance implicitly improves credit, fall within

the scope of this statute. Since Congress was concerned with “credit repair organizations,” this

court reads the statute to reach such entities whose focus is the improvement or repair of a

consumer’s credit record, credit history or credit rating, expressly or implicitly, not entities

whose activities are aimed at assisting consumers in developing “creditworthy behavior” and

paying their debts, which may result in improved actual credit as a collateral consequence, rather

than as a program objective.

The court thus agrees with Edge that Congress did not intend the CROA to apply so

broadly that providing advice to customers about strategies or decisions for dealing with their

debts that may, incidentally, have the effect of improving credit scores necessarily transforms an

entity into a credit repair organization subject to the requirements and prohibitions of the CROA. 

The court therefore concludes that the Debt Free Life Membership and Coaching Program did

not render Edge a credit repair organization. While that program may have the desired effect of

improving a participant’s credit score, the advice provided on ways to reestablish credit, such as

obtaining a passbook loan or a secured credit card, are simply ways of “encouraging
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creditworthy behavior.”

A closer question is whether the services that Edge represented it would provide upon

completion of the Debt Melt Down Program rendered Edge a credit repair organization. The

Agreement Letter stated: 

If the fee paid to Edge is $600.00 or greater, you are entitled to participate in The

Post Closing Credit Restoration Program. The purpose of this program is to

assure that your credit reports properly reflect the settlement and paid accounts

that involved this program. This program is voluntary for you and its success is

dependent upon your proper participation and follow through as directed. Edge

Solutions, Inc. cannot guarantee any specific results with regards to this program.

 

The letter captioned “How the Debt Melt Down Program Works” stated: “Upon completion of

the program, Edge will work with you for 12 months in a best effort rehabilitation of your credit

rating.” The Dear Customer Letter stated that deterioration of credit was not unusual during

participation in the Debt Melt Down Program and that Edge would “help modify it upon

completion of the program.” The “Frequently Asked Questions” document stated under the

heading “How Does the Program Effect Credit?”: “[O]nce you are debt free, the accounts will

indicate a paid or settled status. Within 6 to 12 months, you will be well on your way to total

recovery.”

These representations are sometimes contradictory. For example, the Agreement Letter

indicates that payment of at least $600 in fees to Edge is required to receive post-program help

with the participant’s credit whereas the letter captioned “How the Debt Melt Down Program

Works” indicates that completion of the program is required. Some of the representations are

also vague. The Dear Customer Letter stated that Edge would “help the participant modify [his

credit]” and the letter captioned “How the Debt Melt Down Program Works” references “a best

effort rehabilitation of [the participant’s] credit rating.”
5

Because it was issued after the present motions were fully briefed, neither party cited the

case most factually similar to the instant case. In Polacsek, the court evaluated whether

representations by a credit counseling agency (“CCA”) rendered the CCA a credit repair

organization under the CROA. Polacsek v. Debticated Consumer Counseling, Inc., No. Civ.

PJM 04-631, 2005 WL 3750247, at *1 (D. Md. Nov. 23, 2005). The representations included

that the program would “IMPROVE CREDIT” by “reaging [sic] accounts” which would

“improve [the consumer’s] credit rating” and that “unlike other debt management companies,

[the CCA would] provide [the consumer] with very important ‘back-end services’ to help keep

your credit protected and clean. [The CCA’s] credit report review will make sure [the consumer

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If the Post Closing Credit Restoration Program were the only service offered by Edge in

these documents, or even a primary aspect of the Edge program, the court would agree with

Plattner that offering this program causes Edge to fall within the definition of a credit repair

organization, subject to the requirements of the CROA. When viewed in context of the services

offered by Edge as a whole, however, it is clear that Edge is not offering services that have the

express or implied purpose of improving a participant’s credit. Edge’s customers participate in

the Post Closing Credit Restoration Program only after completing, or at least participating in,

the Debt Melt Down Program. As discussed above, the Debt Melt Down Program documents

make clear that the purpose of the Program is to assist the consumer in getting his or her debts

managed and paid, and that damage to a participant’s credit is likely to occur during participation

in that program. The express purpose of the Post Closing Credit Restoration Program is merely

to help a participant in the Debt Meltdown Program repair any damage done to his credit as a

result of his participation in the Program. 

Thus, the overall purpose of Edge’s services is not to improve a participant’s credit score

but rather to help a participant settle his debt. Even an unsophisticated debtor reviewing the

program documents could not be left with the impression that Edge was offering to improve his

credit except insofar as paying one’s debts is likely, ultimately, to have that effect.5
is] not being mismarked [sic] with someone else’s debt.” Id. at * 8. The court held that these

representations were sufficient to show that the CCA sold credit repair services. Id.

Polacsek is distinguishable from the instant case because Edge never made any

representations that the Debt Melt Down Program and the Post Closing Credit Restoration

Program would have a positive impact on a participant’s credit. Instead, the program documents

make several disclaimers that the effect on credit was outside the scope of the program, and the

program documents make no promise of overall credit improvement.

Additionally, the court in Polacsek suggested, without deciding, that a company may not

be a credit repair organization if credit repair services are ancillary to the company’s primary

business. Polacsek, 2005 WL 3750247, at *6 (“Arguably an entity’s credit repair activities will

be so ancillary to its [credit] counseling activity as to be de minimus and therefore not subject to

CROA.”). In this case, the court notes that the program documents show that, to the extent that

Edge was offering any “credit repair services,” these services were ancillary to the Debt Melt

Down Program. 

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The court thus concludes that with respect to the representations made to Plattner, Edge

is not a credit repair organization under the CROA. Since the provisions Plattner alleged that

Edge violated (15 U.S.C. § 1679b(b), § 1679c, § 1679d, and § 1679e) limit their prohibitions and

requirements to credit repair organizations, summary judgment is granted in favor of Edge as to

Counts I-IV.

B. Breach of Fiduciary Duty

Since no federal claims remain, the court relinquishes jurisdiction over Plattner’s pendent

state claim for breach of fiduciary duty. Wright v. Associated Ins. Cos., 29 F.3d 1244, 1251 (7th

Cir. 1994) (“The general rule is that once all federal claims are dismissed before trial, the district

court should relinquish jurisdiction over pendent state-law claims rather than resolve them on the

merits.”). Summary judgment is granted in favor of Edge as to Count V.
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III. Conclusion

For the foregoing reasons, Edge’s motion for summary judgment is granted, and

Plattner’s motion for summary judgment is denied. 

ENTER:

____/s/_______________________

Joan B. Gottschall

United States District Judge

Dated: March 22, 2006