Federal Trade Commission v. Gill

Keith H. Gill and Richard Murkey (defendants) operated a credit-repair clinic, claiming that they could remove negative information from consumer credit reports. During free consultations, Gill and Murkey told consumers that they could remove all negative information, including accurate negative information, from the consumer’s credit report. After the free consultations, Gill and Murkey required their customers to pay up to 50 percent of their fees upfront and continued to bill customers regardless of whether their promised services had been performed. To perform their services, Gill and Murkey sent letters to credit-reporting agencies disputing all negative information on a customer’s credit reports. The letters falsely alleged that certain negative information was inaccurate. The credit-reporting agencies did not remove the disputed information from customer credit reports, but Gill and Murkey continued charging their customers for their services. The Federal Trade Commission (FTC) (plaintiff) filed a lawsuit in federal district court against Gill and Murkey, alleging that Gill and Murkey violated the Credit Repair Organizations Act by making false or misleading statements about their services and by charging customers for services that had not been fully performed. The district court granted summary judgment for the FTC, finding that Gill and Murkey violated the Credit Repair Organizations Act. The district court permanently enjoined Gill and Murkey from participating in the credit-repair industry and ordered Gill and Murkey to return payments made by their customers. Gill and Murkey appealed.