FTC Shuts Down Credit Repair Using Tradelines, Piggybacking, and Identity Theft Reports

Company Illegally Charged Consumers for Credit Advice, Filed False ID Theft Reports and Pitched Them on Fake Business Opportunity

At the request of the Federal Trade Commission, a federal court has temporarily halted a bogus credit repair scheme known as The Credit Game for promoting a series of lies and deceptions. The FTC alleged the scheme’s operators lied to credit reporting agencies regarding information on consumers’ credit reports and pitched consumers a supposed business opportunity that was essentially starting their own bogus credit repair scheme.

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“Credit repair schemes cheat those already in financial trouble, and these defendants even tried to redirect COVID-19 tax benefits into their own pockets,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We’re grateful that the court shut this scheme down and disrupted this web of deception.”

In a complaint filed against The Credit Game and its owners, Michael and Valerie Rando, the FTC alleged that the company has illegally charged consumers hundreds and even thousands of dollars for credit repair services of little to no value and told consumers to “invest” their COVID-19 governmental benefits on their unlawful services. In some cases, the company’s “services” included filing false identity theft reports with the FTC and encouraging consumers to take actions that were unlawful. The FTC asked the court to immediately halt the company’s illegal operations, appoint a receiver, and freeze the defendants’ assets. The court issued a temporary restraining order doing so on May 3, 2022.

In addition to the core credit repair scheme, the defendants have also taken advantage of the ongoing pandemic by telling consumers to “invest” pandemic tax benefits into their credit repair schemes. One advertisement used the headline “Free Credit Repair From The Government.”

The defendants are based in Florida and have operated credit repair schemes since at least 2019, first using the name Wholesale Tradelines before changing to The Credit Game in 2020. According to the FTC’s complaint, the defendants claim to have brought in more than $15 million in business through their operations.

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In its complaint filed against The Credit Game and the Randos, the FTC alleges the defendants’ deceptive tactics violated the FTC Act, the Credit Repair Organizations Act (CROA), the Business Opportunity Rule, the Telemarketing Sales Rule (TSR), and the Covid Consumer Protection Act (CCPA). This includes:

  • Deceptive marketing: The defendants mislead consumers in numerous ways, including lying to consumers about whether their products are legal, whether their products are effective, and whether consumers can get refunds when requested.
  • Credit piggybacking: The complaint alleges that the defendants pitch a practice known as credit piggybacking. In a piggybacking scheme, a consumer seeking to raise their credit scores pays to be added as an “authorized user” to a credit card account belonging to someone with higher credit. However, the consumer is an “authorized user” in name only and does not have actual access to the account or line of credit.
  • Filing false identity theft reports: As part of their efforts to remove accurate but negative information from consumers’ credit reports, the defendants filed thousands of false identity theft reports on behalf of consumers with the FTC. Knowingly filing a false identity theft report with the FTC is unlawful.
  • Bogus business opportunity: In addition to selling the bogus credit repair services, the defendants also pitch consumers on a supposed business opportunity that consists of reselling the defendants’ own unlawful credit repair services. They use outlandish earnings claims as part of the sales pitch, telling one undercover FTC investigator they could make “tens of thousands” of dollars every month.
  • Illegal advance fees: The defendants charge consumers for their credit repair services upfront, often thousands of dollars, using high-pressure sales tactics and failing to give consumers required information before they are pressured to buy. Charging advance fees for credit repair services is illegal.

In addition, the FTC’s investigation found that the defendants had purchased a tradeline database from previous FTC defendants William Airy and BMS, Inc., who were sued by the FTC for operating a bogus credit repair scheme in 2020, and that the Randos were aware of the FTC’s investigation into Airy and BMS when they bought the tradeline database.

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The complaint says “In December of 2019, Defendants purchased a “Cardholder Database” of 220 cardholders, controlling 524 credit accounts, who were willing, for a fee, to add unrelated authorized users to their accounts from William Airy, CEO of BoostMyScore LLC, and BMS, Inc. (Airy and these companies, collectively, “BMS”). The Randos, through First Coast Inc., purchased the Cardholder Database for $152,500.”

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