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The first rule of credit repair is that no credit repair company can remove accurate and timely negative information from someone’s credit report. For credit repair companies that would claim otherwise, there’s CROA – the Credit Repair Organizations Act. It makes it illegal for credit repair companies to lie about what they can do to clear up a clouded credit report, or charge upfront fees before they do the job they promised to do.

Congress enacted CROA in 1996 in response to a history of credit repair industry practices that often exploited consumers, many struggling with financial adversity. The FTC’s complaint against Grand Teton Professionals, owners Douglas Filter and Marcio Andrade, and nine other businesses the owners control reads like a primer on the practices that led lawmakers to put CROA’s protections into place.

The complaint alleges the defendants violated a laundry list of CROA provisions and five other laws in the course of bilking consumers out of $6.2 million. Among other things, the FTC says the defendants falsely promised they could improve consumers’ credit scores, extracted thousands of dollars in illegal up-front fees from individual consumers, counseled consumers to make misleading statements to credit bureaus about their credit records, and failed to make required disclosures about their services.

At the FTC’s request, a federal court froze the defendants’ assets and ordered them to cease their operations temporarily, pending further proceedings in the case.

According to the lawsuit, the defendants claimed they could boost credit scores by deleting from consumers’ credit reports all negative items and hard inquiries – the records that show you’ve applied for credit — even if the information was accurate and not obsolete. They also promised they could improve credit scores by adding consumers as “authorized users” to the credit accounts of people with positive payment histories, a practice known as adding “tradelines” or “piggybacking” credit.

Using trade names like Deletion Experts, Inquiry Busters, and Top Tradelines, the defendants pitched their products through their websites, unsolicited text and email messages, and telemarketing calls. Typically, the FTC says, they promised guaranteed results and assured consumers that their tactics were legal. The cost? The defendants charged $1,999 to $2,999 for their purported credit report-clearing brands and varying amounts for tradelines.

But, according to the FTC, in most instances the defendants did not substantially improve consumers’ credit scores. In addition, the complaint alleges, if consumers complained or tried to exercise their rights to dispute the defendants’ illegal advance fees, the defendants threatened to sue them for violating purported anti-disparagement and anti-chargeback contract clauses.

The defendants also allegedly failed to give consumers required written copies of their contracts. And, the contracts themselves allegedly failed to include CROA-required terms, like a detailed description of the services to be performed, an estimate of how long it would take to get results, any guarantees, and a statement of the consumer’s three-day right to cancel the contract.

You’ll want to read the complaint for a full rundown of the defendants’ alleged law violations. In addition to CROA, the complaint alleges violations of the FTC Act, the Telemarketing Sales Rule, the Consumer Review Fairness Act, the Truth in Lending Act, and the Electronic Funds Transfer Act.

What’s the message for marketers? CROA lays out a clear list of dos and don’ts for the credit repair industry. If you sell credit repair services and haven’t checked the list lately, now is a good time to make certain you’re complying with each item.