The Federal Trade Commission (FTC) has obtained a court order against two men who allegedly used fake rental ads to lure consumers into paying $29.94 a month for an ostensibly “free” credit monitoring service.
The defendants have agreed to pay $762,000 to resolve the claims, the FTC announced.
They were accused of placing ads on Craigslist for rental properties that did not exist or that they had no right to offer for rent.
“When people responded to the ads, the defendants impersonated property owners and offered property tours if consumers would first obtain credit reports and scores from their websites,” the FTC reported. “These sites claimed to provide ‘free’ credit reports and scores, but then enrolled consumers in a credit monitoring service with monthly charges of $29.94. Many people did not realize they were enrolled until they noticed unexpected charges on their bank or credit card statements, sometimes after several billing cycles.”
The order against defendants Danny Pierce and Andrew Lloyd prohibits them from misrepresenting facts about any product or service. They also must monitor affiliate marketers and investigate any complaints about them.
“The order imposes a $6.8 million judgment that will be partially suspended when Pierce has paid $117,000 and Lloyd has paid $645,000,” the FTC said.
Litigation continues against the other defendants, Credit Bureau Center LLC and Michael Brown.