The FTC can get money back for duped consumers after all, Chicago federal judge rules

The agency is still trying to recover $5.2 million for apartment-hunters who say they were duped into paying unwanted credit-monitoring fees to Credit Bureau Center.

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The Federal Trade Commission building in Washington. The FTC has been trying to get refund for apartment-hunters who say they were duped into unwanted recurring charges for credit monitoring.

The Federal Trade Commission has been trying to get refunds for apartment-hunters who say they were duped into unwanted — and recurring — charges for credit monitoring.


A federal judge in Chicago has given some power back to a consumer agency laid low by a Supreme Court ruling last spring that weakened its ability to obtain refunds for consumers.

The ruling this past week by U.S. District Judge Matthew F. Kennelly resurrected hopes that the Federal Trade Commission will, after years, finally be able to go after $5.2 million in refunds for consumers who were hit with unexpected credit-monitoring charges by a company called Credit Bureau Center LLC.

In the scheme, which ran from 2014 to 2017, consumers who responded to online ads for bargain-priced apartments in hot neighborhoods, such as Logan Square and downtown Evanston, were duped into clicking a link for a “free credit score” before being able to tour the properties, according to the FTC’s original case.

After clicking the link, they were hit with recurring $29.94-a-month credit-monitoring charges, which were disclosed in fine print not noticed by many of the applicants, the FTC says.

The agency estimates Credit Bureau Center — which did business as MyScore, eFreeScore and also under other names — took in millions of dollars before it was shut down.

A screenshot of eFreeScore’s site. Consumers were unaware they’d be hit with monthly credit monitoring fees after clicking on a link for a “free credit score,” the FTC says.

A screenshot of eFreeScore’s site. Consumers were unaware they’d be hit with monthly credit monitoring fees after clicking on a link for a “free credit score,” the FTC says.

Federal Trade Commission

A lawyer representing Credit Bureau Center says he’ll appeal Kennelly’s ruling, which he says gives a green light to “administrative overreach” by the federal agency.

The scheme was shut down in 2017. The following year, Kennelly ordered the company and website owner Michael Brown to pay $5.2 million in restitution.

It would have been a fairly ordinary FTC case — until the business fought back.

Brown’s attorney argued that a portion of the 1973 law governing the agency — “section 13(b)” — doesn’t explicitly give the FTC the power to get restitution for consumers using court injunctions.

In 2019, a judge in the Seventh Circuit U.S. Court of Appeals, based in Chicago, agreed.

That decision upended three decades of precedent. For years, the FTC had used the law to win injunctions against common scams like illegal robocalls, phony tech support and fake debt collections. In the past five years, the agency has gotten $11.2 billion in refunds for illegal and anti-competitive business practices by getting court injunctions against businesses.

In April, though, the Supreme Court dealt the FTC a blow in a ruling in a similar case. It ruled 9-0 in that case, which involved AMG Capital Management, a high-interest, short-term loan company that had been sued by the FTC for deceptive practices.

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The agency had won $1.27 billion in restitution for consumers, but AMG successfully argued before the Supreme Court that the FTC couldn’t use 13(b) to mandate refunds.

Now, Kennelly’s ruling gives some teeth back to the federal consumer watchdog.

Dismissing Credit Bureau Center’s arguments, Kennelly ruled that the FTC could instead use a 2010 law called the Restore Online Shoppers’ Confidence Act — ROSCA, for short — to get money back for the apartment-hunters who were hit with the unwanted credit-monitoring fees.

That law prohibits post-transaction third-party sellers from charging a person’s account unless all of the terms have been disclosed and the consumer has given express consent to the fee. It’s intended to keep people from accidentally signing up for an unwanted, recurring offer when shopping online.

“It’s really good news, and we’re really grateful for the court’s order,” says Todd Kossow, director of the FTC’s Midwest Region. “It means we can keep the money we’ve collected thus far from the defendants and return it to the victims of their scheme.”

Kossow said the FTC previously collected about $1.1 million from Credit Bureau Center and Brown, and once they get the rest of the money they will return it to consumers. Those duped by the scheme will not need to apply for a refund. But with the planned appeal, it could take a while.

Stephen Cochell, the Houston attorney representing Credit Bureau Center, says it’s unfair for the FTC to change its strategy and try to recoup funds under a different law, after the Supreme Court ruled the agency was using powers it didn’t explicitly have.

“That rule protects a lot of innocent people from administrative overreach,” Cochell says.

Head shot of attorney Stephen Cochell

Attorney Stephen Cochell


The FTC is urging Congress to pass legislation to provide a more permanent fix.

In July, the U.S. House passed a bill that spells out that the FTC can seek monetary relief in federal court “from businesses that engage in unlawful commercial practices such as false advertising, consumer fraud and anticompetitive conduct.”

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