[Federal Register Volume 61, Number 63 (Monday, April 1, 1996)]
[Notices]
[Pages 14315-14318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7862]
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[[Page 14316]]
FEDERAL TRADE COMMISSION
[File No. 962-3016]
Lyle R. Larsen d/b/a Momentum; Consent Agreement With Analysis To
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit the Bellevue, Washington-based respondent from
misrepresenting, in his advertisements for a credit repair kit, any
remedy for credit history problems available under the Fair Credit
Reporting Act, including the ability to remove accurate but adverse
information from credit reports. It would also prohibit the company
from misrepresenting the legality of any credit repair product and
would require it to disclose that consumers who follow the programs may
violate federal criminal laws. The consent agreement settles
allegations stemming from advertisements on the Internet for Larson/
Momentum's CreditPlus purported credit repair product.
DATES: Comments must be received on or before May 31, 1996.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pennsylvania Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
C. Steven Baker, Chicago Regional Office, Federal Trade Commission,
Suite 1860, 55 East Monroe Street, Chicago, IL 60603. 312-353-8156
David Medine, Federal Trade Commission, S-4429, 6th and Pennsylvania
Ave, NW., Washington DC 20580. 202-326-3224
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the
Commission's rules of practice (16 CFR 2.34), notice is hereby given
that the following consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of sixty (60) days. Public comment is invited. Such comments or
views will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
Sec. 4.9(b)(6)(ii) of the Commission's rules of practice (16 CFR
4.9(b)(6)(ii)).
In the Matter of Lyle R. Larson, individually and doing business
as Momentum.
[File No. 962-3016]
Agreement Containing Consent Order To Cease and Desist
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Lyle R. Larson individually and doing
business as Momentum (hereinafter referred to as ``proposed
respondent''), and it now appearing that proposed respondent is willing
to enter into an agreement containing an order to cease and desist from
the acts and practices being investigated,
It is hereby agreed by and between Lyle R. Larson, individually and
doing business as Momentum, and counsel for the Federal Trade
Commission that:
1. Proposed respondent Lyle R. Larson is an individual doing
business as Momentum with his principal office or place of business at
3033 127th Place SE, Suite I-21, Bellevue, Washington 98005.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint.
3. Proposed respondent waives:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusion of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
(d) All claims under the Equal Access to Justice Act.
4. This agreement shall not become a part of the public record of
the proceeding unless and until it is accepted by the Commission. If
this agreement is accepted by the Commission, it, together with the
draft of the complaint contemplated hereby, will be placed on the
public record for a period of sixty (60) days and information in
respect thereto publicly released. The Commission thereafter may either
withdraw its acceptance of this agreement and so notify proposed
respondent, in which event it will take such action a it may consider
appropriate, or issue and serve its complaint (in such form as the
circumstances may require) and decision, in disposition of the
proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the attached draft complaint or that the facts
as alleged in the attached draft complaint, other than the
jurisdictional facts, are true.
6. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
Rules, the Commission may, without further notice to proposed
respondent (1) issue its complaint corresponding in form and substance
with the draft of complaint here attached and its decision containing
the following order to cease and desist in disposition of the
proceeding, and (2) make information public in respect thereto. When so
entered, the order to cease and desist shall have the same force and
effect and may be altered, modified or set aside in the same manner and
within the same time provided by statute for other orders. The order
shall become final upon service. Delivery by the U.S. Postal Service of
the decision containing the agreed-to order to proposed respondent's
address as stated in this agreement shall constitute service. Proposed
respondent waives any right he might have to any other manner of
service. The complaint may be used in construing the terms of the
order, and no agreement, understanding, representation, or
interpretation not contained in the order or in the agreement may be
used to vary or contradict the terms of the order.
7. Proposed respondent has read the complaint and the order
contemplated hereby. He understands that once the order has been
issued, he will be required to file one or more compliance reports
showing he has fully complied with the order. Proposed respondent
further understands that he may be liable for civil penalties in the
amount provided by law for each violation of the order after it becomes
final.
Order
Definitions
1. ``Credit Report'' means any written, oral, or other
communication of information by a consumer reporting agency bearing on
a person's credit worthiness, credit standing, credit capacity,
character, general reputation, personal characteristics, or mode of
living that is used or expected to be used or collected in whole or in
part for the purpose of serving as a factor in establishing the
consumer's eligibility for credit.
2. ``Credit Repair Product'' means any product or service to
improve a person's credit report by removing adverse information
appearing therein, changing the rating of such information from
[[Page 14317]]
negative to positive, or otherwise enhancing the person's credit
report.
I
It is ordered that respondent Lyle R. Larson, his agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
advertising, promotion, offering for sale, sale, or distribution of any
credit repair product, in or affecting commerce, as ``commerce'' is
defined in the Federal Trade Commission Act, do forthwith cease and
desist from misrepresenting, either directly or indirectly, in writing,
via a computer communications network, or by any other means:
A. Any right of remedy available under the Fair Credit Reporting
Act, 15 U.S.C. 1681 et seq., including, but not limited to, the ability
to remove adverse information in any credit report; and
B. The legality of any credit repair product.
II
It is further ordered that respondent Lyle R. Larson, his agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
advertising, promotion, offering for sale, sale, or distribution of any
credit repair product involving the creation of a new credit file or
tax identification number, in or affecting commerce, as ``commerce'' is
defined in the Federal Trade Commission Act, do forthwith cease and
desist from failing to disclose in any advertisement or promotional
material, including any advertisement or promotion via a computer
communications network, that:
A. Making misrepresentations to the Internal Revenue Service may be
a federal crime;
B. Misrepresenting one's social security number for any purpose may
be a federal crime;
C. Making misrepresentations for a loan application may be a
federal crime; and
D. Making misrepresentations to a financial institution may be a
federal crime.
III
It is further ordered that for five (5) years after the last date
of dissemination of any representation covered by this Order,
respondent, or his successors and assigns, shall maintain and upon
request make available to the Federal Trade Commission for inspection
and copying:
A. All materials that were relied upon in disseminating such
representation; and
B. All tests, reports, studies, surveys, demonstrations, or other
evidence in his possession or control that contradict, qualify, or call
into question such representation, or the basis relied upon for such
representation, including complaints from consumers.
IV
It is further ordered that respondent shall:
A. Within thirty (30) days from the effective date of this Order
deliver a copy of this Order to each of his officers, agents,
representatives, and employees who are engaged in the preparation or
placement of advertisements, promotional materials or other such sales
materials covered by this Order.
B. For a period of ten (10) years from the effective date of this
Order deliver a copy of this Order to each of his future officers,
agents, representatives, and employees who are engaged in the
preparation or placement of advertisements, promotional materials or
other such sales materials covered by this Order, within three (3) days
after the person assumes such position.
V
It is further ordered that for a period of five (5) years from the
date this Order becomes final, respondent shall notify the Commission
within thirty (30) days of the discontinuance of his present business
or employment and of each affiliation with a new business or employment
involving the advertising, offering for sale, sale, or distribution of
any credit repair product. Each notice of affiliation with any new
business or employment shall include his new business address and
telephone number, current home address, and a statement describing the
nature of the business or employment and the duties and
responsibilities.
VI
It is further ordered that within sixty (60) days after service of
this Order, and at such other times as the Commission may require,
respondent shall file with the Commission a report, in writing, setting
forth in detail the manner and form in which he has complied with this
Order.
VII
This Order will terminate twenty years from the date of its
issuance, or twenty years from the most recent date that the United
States or the Federal Trade Commission files a complaint (with or
without an accompanying consent decree) in federal court alleging any
violation of the Order, whichever comes later; provided, however, that
the filing of such a complaint will not affect the duration of:
A. Any paragraph in this Order that terminates in less than twenty
years;
B. This Order's application to any respondent that is not named as
a defendant in such complaint; and
C. This Order if such complaint is filed after the Order has
terminated pursuant to this paragraph.
Provided further, that if such complaint is dismissed or a federal
court rules that the respondent did not violate any provision of the
Order, and the dismissal or ruling is either not appealed or upheld on
appeal, then the Order will terminate according to this paragraph as
though the complaint was never filed, except that the Order will not
terminate between the date such complaint is filed and the later of the
deadline for appealing such dismissal or ruling and the date such
dismissal or ruling is upheld on appeal.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted an agreement, subject to
final approval, to a proposed consent order from respondent Lyle R.
Larson, individually and doing business as Momentum.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement and take other appropriate action or make
final the agreement's proposed order.
This matter concerns claims made by the respondent in his
advertising, including advertising through the Internet, for the
CreditPlus credit repair product. The Commission's complaint charges
that the respondent's advertising represents, directly or by
implication, that: (a) Consumers can remove bankruptcies, judgments,
foreclosures, liens, repossessions, late payments, and other adverse
items of information from their credit reports even where such
information is accurate and not obsolete; and (b) respondent's product
whereby consumers create new credit files is legal. The claims are
alleged to be false and misleading, and in violation of section 5 of
the Federal Trade Commission Act, 15 U.S.C. 45, because: (a) Most
consumers cannot remove adverse items of information
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from their credit reports where such information is accurate and not
obsolete; and (b) respondent's product whereby consumers create new
credit files is not legal. The Commission's complaint also charges that
the respondent's failure to disclose that consumers who follow
respondent's product to create new credit files will violate certain
federal criminal laws, is a deceptive practice in violation of section
5 of the Federal Trade Commission Act, 15 U.S.C. 45.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent the respondent from engaging in
similar acts and practices in the future. Part I of the proposed order
prohibits the respondent from misrepresenting, directly or by
implication in his advertising for any credit repair product: (a) Any
right or remedy available under the Fair Credit Reporting Act, 15
U.S.C. 1681 et seq., including, but not limited to, the ability to
remove adverse information in any credit report; and (b) the legality
of any credit repair product. Part II of the proposed order prohibits
the respondent from failing to disclose in any advertisement for any
credit repair product that: (a) Making misrepresentations to the
Internal Revenue Service may be a federal crime; (b) misrepresenting
one's social security number for any purpose may be a federal crime;
(c) making misrepresentations for a loan application may be a federal
crime; and (d) making misrepresentations to a financial institution may
be a federal crime.
Part III of the proposed order requires the respondent to maintain
materials relied upon in disseminating any representation covered by
the order. Part IV of the proposed order requires the respondent to
distribute copies of the order to certain company officials and
employees. Part V of the proposed order requires the respondent to
notify the Commission of any discontinuance of his present business or
employment and of each affiliation with a new business or employment.
Part VI of the proposed order requires the respondent to file one or
more compliance reports. Part VII of the proposed order is a provision
whereby the order, absent certain circumstances, terminates twenty
years from the date of issuance.
The purpose of this analysis is to facilitate public comment on the
proposed consent order. It is not intended to constitute an official
interpretation of the agreement and proposed order or to modify their
terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 96-7862 Filed 3-29-96; 8:45 am]
BILLING CODE 6750-01-M