DENVER — Colorado Attorney General John Suthers announced today that it has reached a settlement with a Veracity Credit Consultants LLC, a Denver-based company, that bars the company from charging upfront fees in exchange for credit-repair services as well as misleading consumers about their abilities to cleanse consumers’ credit reports. Under the terms of the agreement, Veracity Credit Consultants must pay the state $400,000 in restitution, costs and fees.
The settlement follows a February 2010 lawsuit the state filed against the company alleging that it charged upfront fees for its services, which is illegal under state and federal law. The company, according to the complaint, required that consumers pay an initial setup fee of up to $99 and monthly fees of up to $79. Under Colorado law, a credit-repair firm can only charge fees once its services are complete.
“Consumers attempting to get out of debt should always carefully examine any promises credit-repair companies make,” Suthers said. “Consumers also should never do business with any company that charges upfront fees for any credit-repair services. Upfront fees are prohibited under Colorado and federal law.”
Suthers said the Colorado Credit Services Organization Act and similar federal laws:
- Prohibit untrue or misleading statements and representations;
- Prohibit advance fees for services;
- Require disclosure of the total amount a consumer will have to pay for credit repair services;
- Require disclosure about when accurate information can be removed from credit reports;
- Require disclosure of a consumer’s right to correct inaccurate information; and,
- Provide consumers a five-day right to cancel a credit repair contract.
For more information on consumer-lending laws, visit www.coloradoattorneygeneral.gov/uccc.