Credit Repair Scams And What To Look Out For
It is an unfortunate truth that the credit repair industry as a whole has taken a lot of heat because of the actions of several unethical and (sometimes) illegal credit repair organizations. The Federal Trade Commission has worked with various states’ attorneys general to shut-down those credit repair companies that operate outside of legal procedure. When choosing a company to help repair your credit, it is imperative that you look for an established company, which has passed the review of the FTC, Attorneys General, and the Better Business Bureau. In addition, there are other things you can look for to help you make a good decision about your credit repair.
Things to look out for before hiring a credit repair organization:
* Offering to “create a new identity”
* Claims that they can remove debts, liens, and bankruptcies from your credit report
* Claim to remove accurate negative information from your credit report
* Not up front about what you can do legally on your own
* Asking for money up front before services are rendered (which may violate ‘right of rescission’ laws
* Make outrageous guarantees about how quickly or effectively they can remove items on your report
What does a true credit repair firm do that makes them a legitimate company?
* Can only help remove inaccurate information on your credit report
* Provide comprehensive consulting on how to be a better consumer
* Have established relationships with creditors and the big three credit bueaus
* Be up front about the cost, only require a relatively small startup fee, and offer services risk free with a “cancel at any time” policy
* The startup cost follows state mandated “right of rescission” periods in which they do not actually charge your credit card until after the period has ended
* Have successfully served many clients, with a relatively small number of complaints from customers, and proof of their services provided.
* Never trust a guarantee that we can “clean up your credit” and make sure the company is up front about the fact that credit repair is typically a 3-6 month process and can even last 1 full year
* Be transparent about what they do and how you can actually repair your own credit without their services
* Ensure they are not on the FTC watch list or in their database of credit repair scams
Even the most compliant, transparent and industry leading comapanies are sometimes powerless to help certain credit situations facing consumers. There are many credit organizations that make false claims, and because of this some customers may have inaccurate information about what can legally be done to help them repair their credit. If a credit repair company cannot help you, it is their duty to give you advice on how to best handle your situation, and not sign you up for additional services that you don’t need.
The act of credit repair is legal and it is within the rights of the consumer to pursue the removal of inaccurate credit repair information through any legally-acceptable channel available to them. Keep in mind, however, that involvement with any illegal credit repair scheme could result in you receiving punishment for your involvement. Most commonly, credit repair scams are brought up on charges of mail or wire fraud, or the federal crime of falsely reporting information to the IRS or credit organizations. These accusations are not taken lightly, and it is not worth the risk of being involved in a credit repair scam to repair your credit when perfectly legal and acceptable solutions are available.
If you believe you may already have been a victim of a fraudulent credit repair company, do not hesitate to report the case to the Attorney General in your state, to file a claim with the Better Business Bureau, or visit www.fraud.org and report your experience there.
