The Scam Fraudulently Induced Over 2.7 Million Unique Visits to Its Websites and Succeeded in Enrolling Approximately 169,000 Customers in Costly Credit Monitoring Services Under False Pretenses, Resulting in At Least $6.8 Million in Consumer Losses
United States Attorney for the Southern District of New York, Jay Clayton, announced the guilty plea of MICHAEL BROWN for his operation of a nationwide online marketing scheme to make money by posting fake advertisements for rental properties across the United States on a classified advertisements website. The purpose of the scheme was to fraudulently induce potential renters to enter their credit card information on credit monitoring websites owned by BROWN and pay for a credit report under false pretenses, including by automatically enrolling the customers in a paid monthly membership for credit monitoring services. BROWN pled guilty on Monday, March 30, to one count of conspiracy to commit wire fraud and one count of wire fraud before U.S. District Judge Katherine Polk Failla.
“Many Americans rely on online websites to safely and securely search for housing,” said U.S. Attorney Jay Clayton. “For years, Michael Brown perpetrated an online scam by tricking ordinary Americans looking for housing, including here in New York, into paying for services they did not need and did not want. The defendant’s company made millions from over 160,000 victims. Mass online fraudsters try to hide by hitting each victim for a small amount. As demonstrated in this case, that will not work.”
According to the charging documents and statements made in public filings and public court proceedings:
BROWN owned and operated Credit Bureau Center, LLC, formerly known as MyScore LLC (“MyScore”), a company that provided credit reports and credit monitoring services via the websites eFreeScore.com, FreeCreditNation.com, and CreditUpdates.com, among other sites (collectively, the “MyScore Websites”). In order to drive potential customers to the MyScore Websites, BROWN employed the use of affiliate marketers. In affiliate marketing, a seller of goods or services such as MyScore uses other firms or individuals known as “affiliates” to market the seller’s goods or services by attracting customers to the seller’s websites.
From at least in or about 2014 through at least on or about January 10, 2017, BROWN and his affiliate marketers engaged in a nationwide online marketing scheme to post fake advertisements for rental properties across the United States on a classified advertisements website (the “Advertising Website”). The purpose of the scheme was to fraudulently induce prospective renters to enter their credit card information on the MyScore Websites and pay for a credit report under false pretenses in order to automatically enroll them in paying for a monthly membership for credit monitoring services.
The advertisements used in the scheme typically contained photos of the supposed rental properties and showcased properties in desirable locations for below-market prices in order to attract interest. The advertisements were posted for rental properties in metropolitan areas across the United States, including, among other locations, New York City, Miami, Atlanta, Houston, Los Angeles, and San Diego. In actuality, the rental properties did not exist as advertised or were not actually available for rent through the posts on the Advertising Website. The advertisements also did not disclose the specific address of the rental properties but instead contained a contact email address inviting prospective renters to contact the property owner if they were interested in the rental property.
When prospective renters inquired about the rental properties posted on the Advertising Website by responding to the advertisements, they received a form email purporting to be from the property owner requiring the prospective renter to obtain a copy of their credit report, and referring the prospective renter to one of the MyScore Websites to obtain a credit report, before scheduling a tour of the property. The form email typically described purported features of the advertised property and falsely informed the prospective renter, in substance and in part, that he or she was the second person to respond to the advertisement, that the first responder no longer needed the property, and that the property owner was ready to lease the property to the prospective renter with flexible terms and had just completed all new renovations.
Once a prospective renter clicked on the hyperlink in the form email from the purported property owner to obtain a copy of their credit report, the prospective renter was directed to the “landing page” of one of the MyScore Websites. The landing page of the MyScore Websites typically featured a large banner that stated, in substance and in part, “Get Your Free Credit Score and Report” with significantly smaller text referencing an unspecified “7-day trial” and a “Monthly membership of $29.94 automatically charged after trial.” In order to get the credit report, prospective renters were required to enter identifying information and credit card information through a series of webpages. Once the prospective renter entered credit card information, the prospective renter was charged $1.00 and was automatically enrolled in a monthly membership for credit monitoring services with recurring charges of typically $29.94 per month until the membership was canceled.
When prospective renters responded to the purported property owner asking to schedule a tour of the advertised property now that they had a copy of their credit report, there was typically no response, as the property was not actually available for rent as advertised and the scheme had succeeded in fraudulently generating a monthly membership subscription for MyScore. Many prospective renters who obtained a credit report from the MyScore Websites as a result of the scheme did not realize that they had been automatically enrolled in MyScore’s membership until they discovered the monthly charges on their credit card statements. Some prospective renters also had difficulties canceling the membership when they contacted MyScore’s customer service department.
BROWN continued to execute the scheme through at least on or about January 10, 2017, despite numerous complaints during the course of the scheme from customers and consumer organizations about the fraudulent nature of the rental advertisements on the Advertising Website, the automatic enrollment of customers in MyScore’s monthly membership with recurring charges without their knowledge, and the difficulties in cancelling the monthly membership.
In total, the scheme caused over approximately 2.7 million unique visits to the MyScore Websites and generated at least $6.8 million in revenue from at least 169,000 customers who were automatically enrolled in MyScore’s monthly membership for credit monitoring services through the scheme.
If you believe you may be a victim of the conduct described in this press release, please call 1-800-CALL-FBI (1-800-225-5324) or use the online tips page: https://tips.fbi.gov.
BROWN, 41, of Indian Trail, North Carolina, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison, for a total maximum sentence of 40 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. BROWN is scheduled to be sentenced by Judge Failla on September 1, 2026.
Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation. Mr. Clayton also thanked the Federal Trade Commission for their assistance with the case.
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