Feds Halt Phony Rental Home Scheme That Raked In Millions In Bogus Credit Check Fees

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For years now we’ve been warning consumers about the apartment rental credit check scam: a scheme where homes (that may not even exist) are listed online with the sole purpose of tricking prospective renters into paying for “credit checks” that will never be done. Today, federal regulators announced they had put a stop to one company accused of using bogus listings and fees to swindle millions out of hopeful tenants.

The Federal Trade Commission on Wednesday announced that a federal court granted an order temporarily halting an alleged scheme run by Credit Bureau Center LLC that targeted consumers looking to rent property.

According to the Commission’s complaint [PDF], since Jan. 2014 Credit Bureau Center — previously known as MyScore LLC, and doing business as eFreeScore.com, CreditUpdates.com, and FreeCreditNation.com — deceptively advertised, marketed, promoted, and sold credit monitoring services to consumers.

When prospective customers responded to the ads, the companies would allegedly impersonate property owners and send emails offering tours if the consumers would first obtain their credit reports and scores.

To do so, the FTC claims, the companies sent the potential renters to websites operated by the defendants. The sites claimed to provide “free” credit reports and scores.

As an extra incentive, the email often states that, if the consumer’s credit score exceeds a certain level, such as 650, the landlord will waive the security deposit.

However, the complaint alleges that the sites deceived consumers into signing up for a negative option seven-day trial of a credit monitoring service.

The FTC claims that nowhere on the webpage is it disclosed that consumers are enrolling in an unrelated credit monitoring program. Once the free trial was over the consumers were charged $29.94 each month for the service.

In many cases, people did not realize they had been enrolled until they noticed unexpected charges on their bank or credit card statements, sometimes after several billing cycles.

The complaint also alleges that consumers who obtained their credit reports and scores never got the promised property tours, and that their emails to the purported property owner to arrange the tours went unanswered.

The FTC’s complaint names Credit Bureau Center LLC, as well as owner, Michael Brown, and associates Danny Pierce and Andrew Lloyd.

The agency alleges that the defendants violated the FTC Act, the Restore Online Shoppers’ Confidence Act, the Fair Credit Reporting Act, and the Free Reports Rule, which requires that consumers be informed of their right to obtain free credit reports. The FTC seeks to permanently stop the allegedly illegal practices and return money to consumers.

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