Lawsuit charges deceptive actions, practices against Boston-based credit repair business

A credit repair company based in Boston faces a joint lawsuit by state and federal authorities charging the firm violated prohibitions against deceptive acts or practices in collecting at least $23 million in fees from consumers, the agencies said Friday.

The lawsuit filed by the Consumer Financial Protection Bureau (CFPB) and the Massachusetts Attorney General alleges that Commonwealth Equity Group, LLC (which does business as Key Credit Repair) and Nikitas Tsoukales (who is also known as Nikitas Tsoukalis and is the firm’s president and owner), in telemarketing of credit-repair services, violated the prohibition against deceptive acts and practices (under the Consumer Financial Protection Act [CFPA]) and the Telemarketing Sales Rule’s (TSR) prohibitions on deceptive and abusive telemarketing acts or practices.

According to the complaint (which lays out nine counts of alleged wrongdoing) the defendants deceptively misrepresented that Key Credit Repair’s actions “will or likely will” result in a substantial increase to consumers’ credit scores and the removal of material negative entries on consumers’ credit reports. The agencies alleged that, in fact, in numerous instances Key Credit Repair did not achieve those results.

According to the release (and as alleged in the complaint), from 2016 through 2019, Key Credit Repair enrolled nearly 40,000 consumers nationwide, and since 2011, it collected at least $23 million in fees from consumers.

“The Bureau alleges that those misrepresentations are deceptive acts or practices in violation of the CFPA and the TSR,” the agencies said in a release. “The Bureau further alleges that Key Credit Repair and Tsoukalis engaged in abusive acts or practices in violation of the TSR by requesting and receiving payment for their credit-repair services before achieving the promised results and before giving consumers a consumer report more than six months after achieving the results to demonstrate the results.”

CFPB said further that the alleged violations of the TSR also constitute violations of the CFPA.

The complaint seeks redress to consumers, an injunction, and the imposition of civil money penalties – but it does not spell out how much the court should award in each of those areas. Instead, the agencies leave that up to the court to decide.

The lawsuit was filed in the federal district court for the District of Massachusetts.

Consumer Financial Protection Bureau and Commonwealth of Massachusetts File Suit Against Credit-Repair Telemarketers