Court Order Bars Credit Repair Company from Misleading Credit Bureaus, Charging Consumers Up-Front Fees for Its Services


Court Order Bars Credit Repair Company from Misleading Credit Bureaus, Charging Consumers Up-Front Fees for Its Services



STATEN ISLAND, N.Y.  – A court case involving a company based in Texas could affect the way consumers on Staten Island and across the nation are treated by credit-repair companies, so Victory State Bank wants its friends and neighbors to know about it.

The Texas-based business, RMCN Credit Services Inc, which is owned and operated by a husband and wife team,  has agreed to settle Federal Trade Commission charges that it violated federal law by lying to consumer reporting agencies, often referred to as “credit bureaus,” and charging consumers up-front fees before providing its services.

The court order settling the FTC’s complaint for civil penalties, which was filed by the U.S. Department of Justice, bars the defendants from similar conduct in the future, imposes a $2.35 million civil penalty, and requires them to pay $400,000.

“The Credit Repair Organizations Act (CROA) protects both individual consumers and the integrity of the credit reporting system,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “The FTC will take action against unscrupulous credit repair companies whether they violate CROA by deceiving consumers or by lying to credit bureaus.”

In itscomplaint, filed in October 2011, the FTC charged that RMCN Credit Services, Inc. and its owners, Doug and Julie Parker, violated CROA by charging up-front fees for a six-month program to improve consumers’ credit ratings and by making numerous false statements to credit bureaus disputing the accuracy of negative information in consumers’ credit reports. In letters to credit bureaus designed to appear as if they were from consumers, but which RMCN did not show consumers, the firm typically disputed all negative information in credit reports, regardless of the information’s accuracy.

The FTC alleged RMCN, one of the nation’s largest credit repair companies, continued to send these deceptive dispute letters to credit bureaus even after the company received detailed billing histories or signed contracts from creditors proving the credit reports were accurate. RMCN also falsely told consumers that federal law allowed it to dispute accurate credit report information, and that credit bureaus must “prove it or remove it.” It also charged consumers up to $2,000 before providing any service.

Thecourt order, to which the defendants have agreed, bars RMCN and its ownersfrom violating any provision of CROA, and specifically from making untrue or misleading statements to consumer reporting agencies and charging consumers advance fees for credit repair services. The order prohibits defendants from sending letters to consumer reporting agencies or creditors unless consumers review and attest to the accuracy of the letters. It also requires RMCN to send letters to all existing customers notifying them of the FTC’s suit and offering them a right to cancel their contract with RMCN and owe no money to the company. In addition, the order prohibits defendants from making misrepresentations regarding the sale of any goods or services to consumers, including the sale of financial-related products or services.

The order imposes a $2.35 million civil penalty against the defendants, which will be partially suspended based on an inability to pay, after they tender a total of $400,000, in two installments, within nine months of when the court enters the order. Finally, for 10 years the company must submit reports to the FTC to ensure it is complying with the terms of the order.

Information for Consumers

Additional information for consumers is available regardingcredit repairandrepairing your own crediton the FTC’s website.

The Commission vote approving the proposed court order was 5-0. The Department of Justice filed the proposed consent decree on behalf of the Commission in the U.S. District Court for the Eastern District of Texas, Sherman Division on June 18, 2014, and it is subject to court approval. The order settles all charges against RMCN Credit Services, Inc. and Doug and Julie Parker, individually and as officers of the corporation.

NOTE:Settlement orders have the force of law when approved and signed by the District Court judge.



About Victory State Bank

VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank.  For additional information, Victory State Bank may be reached at 718-979-1100 or visited online

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