Illinois joined 13 other states and the US Federal Trade Commission in a nationwide crackdown on credit-repair fraud.
Illinois Attorney General Jim Ryan on Tuesday announced the lawsuits, filed Friday, against three defendants, who allegedly hawked their credit-repair scam over the Internet.
The Illinois defendants -- John Wilczynski of Lake in the Hills, Illinois; Scott Markowitz from Jenson Beach, Florida; and Jamie Andrews of Panama City Beach, Florida. People with bad credit histories were told how to establish new credit identities by using false identification numbers, names, and addresses.
The defendants sold credit-repair information on the Internet for US$22 to $40, Ryan said in a news release. Consumers were allegedly told how to obtain and use employer-identification numbers or taxpayer-identification numbers, rather than Social Security numbers, for banking and credit purposes.
According to Cleo Manuel, a spokesman for Internet Fraud Watch, credit-repair fraud is the ninth most prevalent kind of fraud on the Internet today. Online auctions are the No. 1 scheme, he said.
"The Internet is naturally attractive to con artists because of the anonymity factor," Manuel said. "And when it comes to credit-repair fraud, there are already so many transactions involving credit cards that take place on the Internet, that people often get fooled into believing that a credit-repair site must be legitimate.
"Another reason why credit-repair fraud is so successful is that people have a false sense of knowledge about how credit works," he continued. "People use credit cards all the time but don't really understand how it works, especially when they make a mistake or get into trouble."
Manuel said that her organization, which is a subsidiary of the National Consumers League, has observed increasing regulatory activity by the FTC and other government agencies. She said it was not surprising, since Internet fraud had increased threefold since 1997.
"Con artists are always looking for a new arena, and the Internet is still pretty new," Manuel said. "Even people who are used to being online are having a hard time understanding that their community has been altered somewhat. It's like when you live in a neighborhood you feel comfortable in, and you don’t lock your doors -- until somebody robs you."
