Credit fixing: Too good to be true?

Got bad credit?

If so, be cautious about anyone offering to fix it.

At least two Las Vegans and their businesses are being sued by the Bureau of Consumer Protection for allegedly promising to improve consumers' credit histories, records and ratings through methods that could potentially set them up for criminal violations.

Aretta Coffelt, her C & A Adventures company, David Walter Hulet Jr. and Hulet's E-Z Technologies have been accused of violating the federal Credit Repair Organizations Act and the Nevada Deceptive Trade Practices in connection with offers and sales of credit repair services available on the Internet.

The idea at issue, officials say, is suggesting that people use fake Social Security or other identification numbers to make their credit appear good. And, given the thousands of citizens in the U.S. plagued by bad credit, officials say the masterminds behind these scams have plenty of people to prey on.

"It really doesn't work," said Tracey J. Brierly, Nevada deputy attorney general. "What these companies are advising isn't legal, but they don't bother to tell anyone that. What they are suggesting is actually a felony, both on the federal and state levels."

Coffelt, Hulet and their companies are among the first to be stung under "Operation New ID -- Bad IDea" -- a joint effort among the Federal Trade Commission and 21 state attorneys general announced Tuesday in conjunction with National Consumer Awareness Week (Feb. 1-7).

A total of 43 such scams have been uncovered in the U.S. Brierly said investigators surfed the Internet using key works such as "new credit," "bad credit" and "file segregation." Up popped multiple databases, each offering and selling illegal suggestions for fixing bad credit.

Hulet's website offers several "E-Z Credit Kits" ranging in price from $22 to $34.95, as well as his "Inside Book of Credit Repair Secrets," available for $19.95.

The FTC ordered products such as those available from websites such as Hulet's to confirm suspicions, Brierly said.

In separate complaints filed against Coffelt and Hulet, the defendants are accused of claiming to be able to improve consumers' credit by helping them establish new credit profiles with credit bureaus by obtaining employer identification numbers.

EINs, as they are casually known, are numbers through which a company can set up a tax account for their filing purposes with the IRS. The companies named in the suit allegedly suggest that a consumer with bad credit swap in a newly obtained EIN in place of a Social Security number to insure that a credit check comes out clean.

"Consumers cannot legally alter their identifications to conceal adverse credit information with the intent to defraud a prospective creditor," said Frankie Sue Del Papa, Nevada attorney general.

Coffelt also is accused of advising consumers to establish new credit by fabricating a business, registering a "DBA" or "Doing Business As" name for the company, using that DBA to open checking accounts and then contacting commercial credit reporting organizations to track the fraudulent account.

Coffelt could not be reached for comment, but her husband, Lloyd Coffelt, was unaware of the lawsuit when he returned a call to the SUN this morning.

"We paid $10 to get a product off the Internet, and we provided one copy of it to someone for $10 -- that's it," Lloyd Coffelt said. "The only thing we recommended was that people get a new tax code by creating a small business, then establish good credit by getting credit cards. Get a gas card and pay it off, get a credit card and pay it off, get clothing store cards and pay them off. That way it shows you can pay your bills."

Stunned by news of the suit, Lloyd Coffelt said his wife had done nothing illegal.

"We can't even afford an attorney," he said. "We've already been through bankruptcy. We were only in it to make some money. The only people who seem to make any money put thousands into the Internet and then are gone in six months."

Brierly said Hulet, who could not be reached for comment, is additionally being sued for telling consumers that they can legally use an altered or fabricated Social Security number for banking and credit purposes.

"Credit agencies are on to these scams," Brierly said.

The lawsuits against Coffelt, Hulet and their firms were filed Monday in U.S. District Court.

Brierly was unaware of any Las Vegas residents who may have been victimized by Coffelt and Hulet's alleged scams, but officials are hoping that word of the lawsuits will make people come forward.

"This is the kind of scam where people who have been (victimized) don't typically come forward," Brierly said, suggesting that someone may not necessarily want to bring attention to their bad credit or commission of illegal acts to improve their situation.

Anyone victimized by a credit repair scam is asked to call the attorney general's Bureau of Consumer Protection at 486-3420.

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