VENTURA : Credit Correction Firm Fined $2,500

The owners of a Ventura credit rating correction service agreed Monday to pay $2,500 in fines to settle a Superior Court lawsuit charging that they withheld information from customers about their credit reporting rights.

John Payne and Karen Dunwoody, who operate Financial Alternatives at 3585 Telegraph Road, did not tell customers that they could obtain credit reports directly from a credit reporting agency for no more than $8 or free of charge within 30 days of denial of credit, according to a civil lawsuit filed in February, 1990, Deputy Dist. Atty. Michael Schwartz said.

The two also did not inform customers of their right to dispute credit reports directly with a credit reporting agency, failed to provide written contracts explaining what services would be provided, requested payment before services were completed and failed to protect customers by filing a bond with the state, the lawsuit alleged.

Financial Alternatives charged from $35 to $100 for various services, including obtaining credit reports, to help clients who were trying to fix incorrect or outdated information on a credit report, he said.

In a settlement reached by prosecutors and the defendants, Payne and Dunwoody agreed to pay the fines but did not admit any wrongdoing. Superior Court Judge Bruce A. Thompson also issued a permanent injunction prohibiting future violations of credit service requirements and stipulating that the defendants notify past customers of their right to cancel contracts and receive refunds, Schwartz said.

A preliminary injunction has barred the two from any illegal practices since March, 1990, Schwartz said.