The Federal Trade Commission has charged Credit Bureau Center LLC and its alleged affiliates with luring consumers into signing up for a costly credit monitoring service using phony rental property ads and deceptive promises of “free” credit reports.
The FTC says it has reviewed more than 500 consumer complaints and that 150,000 apartment hunters have lost at least $6.1 million. The agency has temporarily shut down the operation, freezing its assets, with hopes of permanently stopping the alleged illegal practices and returning money to consumers.
Last spring, Columbia College student Ben Longson took the bait, when he was desperate to get into an apartment before school started. Like many would-be renters, he started his hunt on Craigslist, and quickly found what looked like the perfect place in Wrigleyville, which touted high-end amenities – for cheap.
"There was a bunch of pictures, there was a really nice living room, bay windows," Longson recalled. "It was like super appealing because the apartment was really nice and it was really cheap for the area and I was like this is cool."
But what happened next? Not so cool: an email from the “landlord” with a request.
"They need me to fill out this credit report to be able to come see the place," Longson said.
All Longson had to do was click on a link in the email to get his “free” credit report, then bring it to the “showing.”
Clicking on that link is a mistake the Federal Trade Commission says has led to more than $6 million lost by consumers across the country, and to charges by the FTC against Delaware-based Credit Bureau Center and three named defendants: Michael Brown, Danny Pierce and Andrew Lloyd. NBC 5 Responds reached out to the attorneys representing the men. Only Danny Pierce’s attorney, Richard Newman, offered comment:
“Mr. Pierce looks forward to establishing that the Commission’s allegations mischaracterize his role, if any, in the subject marketing campaigns,” Newman said in a statement.
"It's a very clever and deceptive scheme," FTC attorney Guy Ward told NBC 5 Responds. “It’s been very lucrative for the defendants.”
The alleged scheme involves a “fake landlord” posting a “fake ad” with critical information missing.
"There's no address typically in the ads involved in this case so they will have to send an email,” according to Ward.
Potential renters then receive an email back from the “fake landlord” who says before viewing the apartment, the consumer must get a credit score and report, and then offers a link to a free report, which they are instructed to bring to the viewing.
"That's when they're taken to the websites,” Ward said. “And it says right upfront in big bold heading ‘free credit score and report.’”
Renters then set up an account and hand over personal information, including credit card and social security numbers.
"But what ends up happening is they are signed up for a subscription -- a service that charges that credit card every month," Ward said.
A $30 monthly fee from a website the FTC calls deceptive at best.
"I think it's outrageous to trick them onto the website that way then charge them monthly fees without their knowledge," Ward said.
Ben Longson caught his mistake in time and canceled his credit card.
"I found out it was a fraud site and I was just like damn, this sucks," Longson said. "I didn't pay attention to all the information I was giving out. I just wanted to get some place so bad that I was willing to give that information out, which now I know not to."