In Perry v. Drivehere.com, Inc., 2011 WL 3204818 (E.D.Pa. 2011), Judge Joyner found that a plaintiff stated a claim in an auto finance transaction under the Credit Repair Organizations Act due to advertisements and a close connection to a CRO.
According to the allegations of the Amended Complaint, Plaintiff, Brittani Perry, entered into a Lease agreement with Peoples Commerce, Inc. to lease a 1999 Buick Regal on November 21, 2009. Plaintiff alleges that Defendants DriveHere.com and Peoples Commerce are in the business of selling and/or leasing older high mileage automobiles to consumers at inflated prices. (Amended Complaint, ¶ 1). As part of the sale/lease transaction, Defendants frequently enroll consumers in their credit repair service, operated under the name FixCreditPlus.com. The purpose of this service is to improve and repair a consumer’s credit record. Defendant DriveHere.com advertises on its website that it “specializes in estab-lishing or reestablishing our client’s credit … We help with any bad credit entry with the credit bureau for you.” (Amended Complaint, ¶ s 2–3). Plaintiff’s lease terms called for 154 weekly payments of $65.00, totaling $10,075.00 and $974.99 due at signing, which included the first weekly pay-ment of $65.00. In addition to the car lease, Plaintiff entered into a separate agreement with FixCredit-Plus.com to help repair her credit. Plaintiff signed a limited Power of Attorney with FixCredit.com to allow the company to complete this service. The lease and delivery of the vehicle, the financing of the lease, and the credit repair were all entered into on the same day, at the same location, and were all part of one transaction. On June 24, 2010, Plaintiff returned the leased vehicle and terminated the lease because the car had mechanical issues. Even though Plaintiff terminated the lease, Defendant reported to the credit bureaus that the car was repossessed. Plaintiff initiated this lawsuit alleging violations of the Federal Credit Repair Organization Act, 15 U.S.C. § 1679, et. seq. (Count I), Pennsylvania’s Credit Services Act, 73 P.S. § 2181 et. seq., (Count II), the Federal Consumer Leasing Act, 15 U.S.C. § 1667 (Count III), and a breach of fiduciary duty (Count IV, mislabeled as second Count III). Plaintiff is seeking to recover actual and punitive damages, attorney’s fees and costs, and such other relief as this Court deems appropriate. Defendants move to dismiss these claims on the grounds that Plaintiff has failed to state a claim upon which relief may be granted pursuant to Fed. R. Civ P. 12(b)(6).
The Court found that the Plaintiff stated a claim under the CROA:
For one, Plaintiff alleges that during the course of and as part of her dealings and transaction with DriveHere.com and Peoples Commerce, to whom she paid money, she was enrolled in a credit repair service operated by Defendants under the name Fix-CreditPlus.com. (Amended Complaint, ¶ 27). Drive-Here.com advertises on its website that it “specializes in establishing or re-establishing our client’s credit … We help with any bad credit entry with the credit bureau for you.” (Amended Complaint, ¶ 28). Drive-Here.com further represents that it has a “Proactive team of experts that helps each and every customer attain the credit score they deserve.” (Amended Complaint, ¶ 29). Plaintiff further alleges that Defendants promised to improve and repair her credit history, record, and/or her credit rating by contacting the credit bureaus to dispute the information contained in Perry’s credit reports. (Amended Complaint, ¶ 32). Plaintiff even signed a power of attorney with Fix-CreditPlus.com to allow them to provide this service. (Amended Complaint, ¶ 33). Plaintiff further avers that the lease and delivery of the vehicle, the financ-ing of the lease, and the credit repair were accom-plished on the same day at the same physical location in Plymouth Meeting, Pennsylvania, and were part of one transaction. (Amended Complaint, ¶ 34). In addi-tion, there are allegations in the amended complaint that all three Defendants received consideration in connection with the lease transaction with Plaintiff, which included the credit repair. (Amended Com-plaint, ¶ 35). Although the contract itself states a total payment of $0 in return for these services, Plaintiff alleges that the Defendants each received valuable consideration in connection with the lease transac-tion, which included the promised credit repair. In view of these averments, we do not find the zero amount on the contract to be dispositive. Indeed, it is possible that it is a false statement regarding the fees received or it could be referring to the amount the Plaintiff was required to pay, but would not exclude the possibility of receipt of “other valuable considera-tion.” In any event, this is an issue that can be ex-plored through discovery. At the motion to dismiss stage of litigation, this Court must take all well-pleaded facts as true and draw inferences in favor of Plaintiff. Flower v. UPMC Shadyside, 578 F.3d at 210–11. Thus, in light of this standard, the Court finds that FixCredit-Plus.com is a credit organization within the meaning of the CROA and thus Plaintiff is allowed to pursue her claim. Furthermore, Plaintiff may allege CROA violations against all defendants. While only FixCredit-Plus.com is actually performing the credit repair services advertised, Plaintiff alleges that all defen-dants are connected to the CROA violations. Plaintiff alleges that during the course of and as part of her dealings and transaction with DriveHere.com and Peoples Commerce, she was enrolled in a credit re-pair service operated by Defendants under the name FixCreditPlus.com and that DriveHere.com adver-tises on its website that it specializes in repairing credit. Again, at this stage of the litigation, we con-fine our inquiry to the pleadings. In so doing, we find that Plaintiff has alleged sufficient facts to claim that each Defendant violated the CROA. See, Hanrahan v. Britt, No. 94–4615, 1995 U.S. Dist LEXIS 9745 at *8 (E.D.Pa. July 12, 1995) (holding that plaintiffs could bring claims against all defendants since plain-tiffs had alleged that the unlawful conduct “was carried out by and through defendants’ business organi-zations, which organizations are comprised of and include defendants individually, the various corpora-tions and entities through which defendants conduct their respective businesses, and the employees, agents and representatives of defendants’ respective business organizations”).