Thursday, September 13, 2001
Ninth Circuit Upholds Order Banning San Fernando Valley Attorney From ‘Credit Repair’ Business
By a MetNews Staff Writer
A district judge’s order barring a San Fernando Valley lawyer and a former lawyer who worked in his office from engaging in the business of “credit repair” was affirmed yesterday by the Ninth U.S. Circuit Court of Appeals.
Keith H. Gill and Richard Murkey violated federal law by falsely representing that they could legally remove adverse information from credit reports “99.9 percent of the time” and by taking money for services that had not yet been fully performed, Judge Richard Paez wrote.
The order by U.S. District Judge Lourdes G. Baird of the Central District of California, which was upheld in its entirety, also requires the pair to pay more than $1.3 million in restitution and/or disgorgement of ill-gotten gains.
Gill, a Woodland Hills sole practitioner, was unavailable for comment. Murkey, who resigned from the State Bar in 1990 rather than face possible disbarment for stealing from clients and for practicing while under suspension, is no longer employed in Gill’s office, a receptionist said.
The Federal Trade Commission sued Gill and Murkey in 1998, claiming they had violated the Credit Repair Organizations Act. The act, adopted in 1996 to clamp down on businesses promising services that they will not or cannot deliver, prohibits the use of misleading statements in advertising credit repair services and requires that services be fully performed before any payment is made by the consumer.
Credit repair services like Gill and Murkey’s, Paez explained, frequently tell consumers that they can remove negative information, without advising them that legally, a credit reporting agency may continue to report accurate, adverse information for seven years or longer.
The services often obtain temporary results by disputing information that is accurate, but has to be removed from credit reports because it cannot be verified within the 30-day period allowed by law. But such “repairs” are usually meaningless, Paez explained, because the agencies can and will restore the information once they verify it.
Murkey, working through Gill’s office, obtained a huge volume of business through advertising, much of it in the form of an “informercial”-type sponsored radio program, the appellate jurist noted.
Paez rejected Gill’s contention that he should not be subject to the injunctions, or required to pay restitution or disgorgement, because he didn’t personally participate in the misconduct of Murkey, whom he described as a “third-party independent contractor” who functioned in a manner “similar to an independent probate paralegal service.”
Paez noted that Gill and Murkey had a written agreement by which Gill retained “the ultimate responsibility for the quality and sufficiency of the services furnished to [his] clients.”
Gill also “acknowledged that he spoke with Murkey regularly and elected to sign on the credit repair clients as law firm clients rather than simply refer them to Murkey,” Paez said, and didn’t back up his claim that all of the fees collected went to Murkey.
Gill and Murkey represented themselves in the Ninth Circuit. Jon Miller Steiger, a Washington-based staff attorney, argued for the FTC.
The case is Federal Trade Commission v. Gill, 00-55122.
Copyright 2001, Metropolitan News Company