Alabama Attorney General Steve Marshall recently filed a complaint against Scott’s Credit Repair and its owners, John C. Scott and Krystal Scott, in Montgomery, Alabama Circuit Court. The complaint alleged that “from beginning to end, the consumer experience with Scott’s Credit Repair is rooted in deception and illegality.” More specifically, the complaint alleged that the defendants “have engaged in deceptive advertising that perpetuates their empty promises of better lives for their consumers” and that “they have made false statements to both credit bureaus and to consumers, they have defrauded consumers by illegally charging them before services are completed and by charging them different rates than those they advertise, and they have failed to permit at least one consumer to cancel their services within three days in violation of the federal law governing credit repair businesses.” These actions, according Marshall’s office, violated the Alabama Deceptive Practices Act.
Two days after the complaint was filed, the parties entered into a consent judgment, which prohibits the defendants from engaging in any credit reporting activity and bars them from owning or managing any business within the state of Alabama.
This case is a reminder of regulators’ particular interest and involvement in the credit repair industry. Troutman Sanders will continue to monitor and report on developments on this issue.