A Denver-based “credit-repair” company was sued today by Colorado Attorney General John Suthers, who accused Veracity Credit Consultants of charging upfront fees which Suthers said are illegal under state and federal law.
The civil lawsuit, filed in Denver District Court, alleges the company requires consumers to pay an initial setup fee of up to $99 and monthly fees of up to $79.
The lawsuit alleges that a credit-repair firm can only charge fees once its services are complete.
Company representatives reached by phone said they were not authorized to talk about the allegations.
According to the lawsuit, since 2003 Veracity has advertised, promoted and offered online “credit optimization services” in Colorado and throughout the United States.
On its websites, said the lawsuit, Veracity offers to “fix credit” and correct errors to improve a consumer’s credit score.
To pull in customers, Suthers charged, Veracity claims to be one of the best credit-repair services available because the company gets “results.”
“By offering the best report analyses, fast credit score turnarounds, ongoing updates and the most attentive and professionally-trained credit repair consultants, we outperform our competitors significantly,” the lawsuit quotes Veracity as saying.
However, investigators charge that contrary to Veracity’s representations about “results” and “fast credit score turnarounds,” the company sends consumers a “client services agreement” which specifically says it can’t do the things claimed on the websites.
Buried in the middle of the agreement, the company says it doesn’t “represent or warrant that it will achieve specific results for client,” said the lawsuit.
Suthers alleged that the actual services Veracity provides are quite limited.
“Consumers trying to work their way out of debt and improve their credit should carefully examine the promises any credit-repair company makes,” Suthers said in a news release. “Consumers also should beware of any company that charges upfront fees for any credit-repair services.”
Suthers said the Colorado Credit Services Organization Act and similar federal laws prohibit untrue or misleading statements and representations; prohibit advance fees; require disclosure of the total amount a consumer will have to pay for credit repair services, and provide consumers a five-day right to cancel a credit repair contract.
The lawsuit asks for an injunction enjoining Veracity from providing credit-repair services to Colorado residents in violation of CCSOA and engaging in deceptive trade practices.
The lawsuit also asks the court to impose civil penalties against Veracity and award actual damages to residents of Colorado injured by the actions of Veracity.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com
