PORTLAND, Ore. (CN) - Credit Team USA, a "credit repair" organization, scammed an old man for thousands of dollars by charging upfront and claiming it could get him an "Obama mortgage relief plan," the man claims in Federal Court.
Richard Dehen says that after he paid $3,284, believing the defendants' promise that they could reduce his mortgage payments and improve his credit, he discovered that credit repair organizations aren't allowed to charge in advance and that there is no government plan to help him reduce the principal on his mortgage.
Dehen said he decided to cancel the agreement when co-defendant Ronald Bennett, part owner of Credit Team USA, wrote a hardship letter on his behalf that contained "misrepresentations regarding [his] financial condition."
Dehen says he told the company he wanted to cancel his contract, but Credit Team USA never gave him a cancellation form.
The Credit Repair Organizations Act requires companies such as Credit Team USA to give consumers contract cancellation forms along with the initial contract, the lawsuit states.
Dehen also sued American Contractors Indemnity Co. He demands treble damages for financial abuse of an elder, unlawful trade, misrepresentation, and other violations. He is represented by Terrance Slominski of Tigard, Ore.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.