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FTC Goes After Credit Repair and Debt Relief Provider and Files Civil Contempt Charges

The Federal Trade Commission has filed contempt charges against a promoter of credit repair and debt relief services and three of his companies, alleging that they continued their deceptive marketing practices in violation of a federal court order. The FTC charged that the defendants tried to take advantage of financially strapped consumers by falsely telling them that almost anyone can qualify for food stamps, and by encouraging them to mislead the government about their finances to qualify for the food stamp program.

As part of the FTC’s ongoing efforts to protect consumers in financial distress, the agency seeks to ban the defendants from selling credit repair, debt relief, or government-related goods or services, and make them pay compensation to consumers.

The FTC charged that Sam Tarad Sky, Allrepco LLC, Credit Restoration Brokers LLC (CRB), and Debt Negotiations Associates LLC (DNA) violated the terms of a March 2010 court order that resolved charges that the defendants deceptively marketed credit repair and debt relief services, and illegally charged an up-front fee for credit repair services. The court order bars them from deceptively marketing any good or service and from violating the Credit Repair Organizations Act.

In violation of the Stipulated Settlement Order, Contempt Defendants Sam Sky and his companies have launched a scheme to defraud economically distressed consumers who may be interested in receiving food stamps. Specifically, taking cynical advantage of the recent economic downturn, Sky and his companies deceptively market a “Food Stamp Eligibility Tool Kit” (“food stamp guide”) to consumers seeking financial help. Sky and his companies market the product as an “automatic,” “hassle free” method by which “virtually everyone” can receive food stamps “without any risk.” In fact, eligibility for food stamps remains strictly limited and the vast majority of Americans do not qualify. To side-step these longstanding limitations, Sky’s “guide” encourages consumers to provide so-called “ideal” information on their food stamp applications thereby misrepresenting their income and expenses. Following such advice is hardly “without any risk.” Rather, it puts consumers at considerable risk of criminal prosecution for public benefits fraud. Finally, Contempt Defendants also violate the Stipulated Settlement Order by unlawfully requiring payment before performance for credit repair services and refusing to make required disclosures about the timing and risk of debt negotiation. – Source

Despite the court order, the FTC alleges that Sky and his companies used two websites to promote a food stamp application guide that falsely promised it would show how “almost everybody” or “virtually everyone” can “legally apply for food stamps” or “legally get [food stamps] for free.” The defendants sold the guide for either a one-time fee of $99, or as part of “Financial Solution Package” that cost consumers a monthly recurring fee of up to $139.

On, Sky and his companies bundle his food stamp guide with other purported products and services in a “Financial Solution Package” for a monthly recurring charge of between $99 and $139.

Specifically, Sky offers nine products and services in this package: credit repair services; debt relief services; credit and debt games; the food stamp guide; found money searches; secretarial services; advice on foreclosures; Section 8 Housing advice; and college financial aid advice. Id. Consumers may purchase the package online merely by providing contact and payment information. As discussed below, Sky takes immediate payment before performing any credit repair services or fully making required debt relief disclosures.

According to the FTC, under longstanding government restrictions, only low-income households can qualify for the federal food stamp program. In the guide, however, the defendants repeatedly tell consumers to provide the government with misleading information in order to inflate their chances of being deemed eligible – advising them, for example, to have high-income residents briefly move out of their household. The FTC charged that following this advice could leave consumers open to civil or criminal charges by the government.

In addition, the FTC charged that the defendants marketed the food stamp application guide throughout the United States, without telling consumers that the guide contained information about the application process in only one state – Florida.

The FTC also alleged that the defendants charged up-front fees for credit repair services, failed to make required disclosures about their debt relief services, and failed to fully report Sky’s business activities, all in violation of the court order.

This [original] case was against Credit Restoration Brokers, Clear Credit Sam Sky, Sam Sky Credit Guy, Debt Negotiation Associates, Sam Tarad Sky, Kurt A. Streyffeler. – Source

FTC Goes After Credit Repair and Debt Relief Provider and Files Civil Contempt Charges
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Kurt Streyffeler

    In your article, “FTC Goes After Credit Repair and Debt Relief Provider and Files Civil Contempt Charges”, you write:

    “This case was against Credit Restoration Brokers, Clear Credit Sam Sky, Sam Sky Credit Guy, Debt Negotiation Associates, Sam Tarad Sky, Kurt A. Streyffeler. – Source”

    In another article:

    You wrote: “In April of 2011, the FTC filed contempt charges against Sky and his enterprises, including Credit Restoration Brokers, Clear Credit Sam Sky, Sam Sky Credit Guy, Debt Negotiation Associates, Sam Tarad Sky, and Kurt Streyffeler.”

    These are erroneous and defamatory statements since the civil contempt charges were NOT made against Kurt A. Streyffeler.


    Formal demand is hereby made that you immediately retract Kurt A. Streyffeler’s name from both of these articles, and issue a publically written apology for slandering my name.

    In addition, I would like the opportunity to discuss with you in person how I came to be named as a defendant in the underlying FTC civil [email protected].

    For a licensed lawyer who prides himself in unveiling the “truth”, you took very little care in trying to discern how a licensed attorney for 23 years, former president of the local bar association, and 1999 Florida Bar President’s receipient of the Pro Bono Services of the Year award for the Twentieth Judicial Circuit, came to be named in an FTC investigation.

    I have never provided credit repair, debt negotiation, or consumer protection services, unlike some attorneys who have started or are principles of credit repair and/or debt negotiation companies. I am a general practitioner who specializes in family law and civil and commercial litigation.

    I was hired to represent a credit repair company (not as an employee or in any other capacity) and agreed to write follow up demand letters to credit reporting agencies, on behalf of my credit repair company client, NOT on behalf of the individual consumers. Although I drafted and signed all of my follow up demand letters, I was informed by my client that he would provide his client’s/the consumer’s “identification information” by enclosing all of the documents that were enclosed in my client’s prior initial demand letters. At some point in time, unbeknownst to me, my client started adding “identity theft” as grounds for challenging the credit reporting, when my letter only referenced alleged inaccurracies and erroneuos information, that needed to be investigated by the Credit Reporting Agencies, pursuant to federal fair debt collecting laws. If you took the time to discuss this matter with me further, I would hope your “journalistic integrity” would cause you to view and report my situation differently, than my client who conducted his business independent of my law practice, and clearly without my legal advice or guidance. As for my “agreement” to a stipulated order, wherein, I specifically did not admit to the truth of any of the allegations against me, ironically, as it is for many of my clients, my decision came down to a cost-benefit analysis, even though I truly believe I could have successfully defended my position. I would understand if you wrote an article as a warning to attorneys who are representing credit repair and debt negotiation companies, but to portray me in such a distorted matter, is truly reprehensible. Again, I hope you are capable of doing the right thing and set the record straight … for the sake of truth and honesty.

    • Steve Rhode

      I want to make sure the posts reflect the statements issued by the FTC accurately. To make sure there was no confusion between the contempt action and the original case that named you I added [original] in the listing of names in the sentence regarding the original case to avoid any confusion for readers.

      I also updated the second item you mentioned and removed your name from that list. I apologize that you were inadvertently listed in that sentence. The confusion came from the April FTC press release that I sourced and the inclusion of your name on the same page as a defendant in the original action.

      I have published your statement here so people can read your side of the matter and hear from you directly.

      If there are any other issues you feel need clarification, please let me know. It appears that the majority of the articles came directly from the FTC.

      My report did not require me to speak with you since I was reporting on what the FTC issued as a public statement and documents. 

      From your explanation it sounds like you got mixed up with the wrong client.

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