Four different “credit repair” operations have been ordered to pay a total of more than $2 million in penalties for allegedly tricking people into thinking their bad credit could be easily fixed.
The Consumer Financial Protection Bureau announced today that it filed complaints and proposed judgments against Prime Credit, LLC, IMC Capital, LLC, Commercial Credit Consultants, and Park View Law, accusing the companies of misleading consumers and charging illegal fees for so-called credit repair services.
The CFPB alleges that, starting as far back as 2009 for some the companies, these operations made misleading, unsubstantiated claims that they could remove virtually any negative information from credit reports and could boost credit scores by significant amounts.
In order to attract customers, the companies would cold-call debtors, often targeting those seeking to obtain a mortgage, loan, refinancing, or other extension of credit.
The CFPB claims that once customers agreed to the services, the companies illegally charged fees in advance of providing any service.
Under federal law, telemarketers and certain companies are prohibited from requesting or collecting fees for credit repair services until certain conditions are met.
In the case of the four credit repair companies in the CFPB’s complaint, the operations charged consumers an initial consultation fee of about $60 to review a consumer’s credit report and set-up fees totaling hundreds of dollars, as well as monthly fees that often equaled $89.99 per month.
In all, the CFPB claims that the companies charged approximately 71,000 customers at least $31 million in fees from Aug. 2009 to Sept. 2014.
While the operations offered “money-back guarantees,” the CFPB claims that they failed to disclose the limits of these promises. For instance, customers were not properly informed that the guarantees were only available if they paid for six months of service, or that they were limited to the removal of a minimum of one disputed item within 180 days.
Further, the companies’ construed the guarantee as meaning that so long as the credit repair services resulted in the removal of a single disputed item within six months, the customers could not obtain a refund, even if their credit scores did not improve.
Finally, the complaints allege that the credit repair companies misrepresented that they could remove negative entries on consumers’ credit reports and increase their credit scores. In fact, the CFPB notes in the complaints that the companies lacked a reasonable basis to make these claims.
For instance, the complaint alleges the companies not obtain credit reports or credit scores for customers, meaning they couldn’t determine if negative items had been removed from consumers’ credit reports or whether their scores had increased.
Under the proposed judgments, Prime Credit, IMC Capital, and Commercial Credit Consultants must pay a civil penalty of $1.5 million, while Park View Law must pay $500,000 in relinquished funds to the U.S. Treasury.
Additionally, the companies are prohibited from doing business within the credit repair industry for five years and are permanently prohibited from violating the Dodd-Frank Act or the Telemarketing Sales Rule.

Editor's Note: This article originally appeared on Consumerist.