From: jfurr@acpub.duke.edu (Joel K. Furr) Subject: The FTC wades in
From: Don.Blumenthal@wpo.ftc.gov
FOR RELEASE: SEPTEMBER 14, 1994
FTC TARGETS ADVERTISING ON "INFORMATION SUPERHIGHWAY": Credit repair co. urged consumers to falsify data, FTC Charged In its first case targeting advertising on the "information superhighway," the Federal Trade Commission has charged a Sacramento, California, man with making false claims in the course of promoting his credit-repair program on an on-line computer service. The FTC alleged that Brian Corzine, doing business as Chase Consulting, promoted his $99 program on America Online. The program allegedly advises consumers to take illegal steps in order to repair their credit records, while representing that it is "100% legal." At the FTC's request, a federal district court has ordered a temporary halt to the alleged deceptive promotion, and frozen Corzine's assets to preserve any funds for consumer redress.
"As these computer networks continue to grow, we will not tolerate the use of deceptive practices here any more than we have tolerated them on other recently-emerged technologies for marketing products and services to consumers," said FTC Chairman Janet D. Steiger in announcing the case.
In its complaint detailing the charges in the case, the FTC alleged that Corzine (also known as Brian Chase) advertised his credit program on America Online, instructing consumers to contact Chase Consulting through the computer service. Corzine allegedly enticed consumers to do so by using statements such as:
-- "FOR JUST $99.00 WE WILL SHOW YOU HOW TO CREATE A BRAND NEW CREDIT FILE AT ALL 3 OF THE MAJOR CREDIT BUREAUS...100% LEGAL AND 200% GUARANTEED."
Consumers who contacted Chase Consulting by computer received a three-page description of the program instructing them to obtain a "taxpayer identification number" from one of a few specific Internal Revenue Service regional centers and then to use this number in place of their Social Security number on credit applications. The complete "file segregation" program included a booklet which further instructed consumers to obtain two new addresses: one for use on their driver's licenses and one for use on credit applications. Corzine allegedly represented that the program is legal. But consumers who falsify statements on certain loan and credit applications or falsify their Social Security number would violate one or more federal criminal statutes, the FTC said.
The FTC has asked the federal district court to issue a permanent injunction against Corzine prohibiting him from engaging in these kinds of practices in the future, and ordering him to pay consumer redress.
The FTC vote to file the complaint was 3-0, with Commissioner Dennis A. Yao not participating. It was filed under seal in U.S. District Court for the Eastern District of California, in Sacramento, on Sept. 12, 1994. The seal was lifted late yesterday.
NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
Copies of the complaint and free FTC brochures for consumers titled "Credit Repair Scams," "A New Credit Identity: A New Credit Repair Scam," and "How to Dispute Credit Report Errors," which offer tips on avoiding these types of schemes and correcting your own credit record, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326-2502.
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