Montgomery credit repair company shut down, accused of deception

Montgomery credit repair company shut down, accused of deception

MONTGOMERY, AL (WSFA) - A Montgomery credit repair company has been permanently closed for deceptive and illegal practices, according to Alabama Attorney General's Office.

Attorney General's Steve Marshall's office reached a settlement with Scott's Credit Repair and its owners that included shutting down the business.

John Scott and Krystal Scott, the owners of Scott's Credit Repair, are also prohibited from engaging in any credit repair or consumer finance industries and from owning or managing a business in Alabama.

The company, which operated in Montgomery and around Alabama, is accused of frequently deceiving and defrauding customers.

"These defendants conducted their business in flagrant disregard of the law and without concern for providing an honest and worthwhile service to their customers," Attorney General Steve Marshall said.

According to an Attorney General's office complaint, the company would pull in consumers with advertisements claiming if they hired the company they would be able to buy expensive homes and cars. One advertisement featured a women pointing at a house and car and saying "look what they've done for me." The supposed customer's story was made up, according to the complaint.

John Scott was reached by phone on Tuesday and denied all the allegations in the complaint and the consent judgment, which has his signature. 

"We weren't doing anything wrong," Scott told WSFA 12 News, saying he felt like his business was forced out of Alabama.

The complaint states the Credit Repair Organizations Act prohibits a credit repair organization from charging or receiving any money before the credit repair service is fully performed, action the AG’s Office alleges Scott’s Credit Repair engaged in. 

Scott denied breaking the law but admitted to receiving payments from clients before the services were rendered, calling it an "industry practice."

"[John Scott and Krystal Scott] also paid a customer to post a positive message about the business on social media. The customer then made a false post claiming the defendants had helped her buy a new car at a good interest rate, and although fully aware that the post was false, the defendants reposted it multiple times," the Attorney General's Office stated.

Evidence from the investigation showed the company also used a practice called "jamming" to create the illusion of better credit.

"They would automatically and indiscriminately dispute most if not all negative items in someone's credit report, without any input from the consumer about what was accurate or not...And in some cases, the defendants would simply fabricate stories that the consumers had been victims of identity theft, without those consumers' knowledge or consent, in order to have negative items removed from their credit reports," the Attorney General's Office stated.

The complaint also alleges the company charged customers higher fees than those advertised, citing examples and clients that fell victim.  Scott also denied this allegation.

Despite signing the agreement to close his business, and agreeing to pay the Attorney General's Office $5,000 in legal expenses, Scott says he plans to fight this court action.

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