Warnings About Hiring Credit Repair Agencies
You see the advertisements in newspapers, on TV, and on the
Internet. You hear them on the radio. You get fliers in the mail.
You may even get calls from telemarketers offering credit repair
services. They all make the same claims:
- "Credit problems? No problem!"
- "We can erase your bad credit -- 100%
guaranteed."
- "Create a new credit identity -- legally."
- "We can remove bankruptcies, judgments, liens, and
bad loans from your credit file forever!"
Do yourself, and your wallet, a favor. Don't believe
these statements. Only time, a conscious effort, and a personal
debt repayment plan will improve your credit report.
If you decide to respond to a credit repair offer, beware of
companies that:
- Want you to pay for credit repair services before any
services are provided;
- Do not tell you your legal rights and what you can do --
yourself -- for free;
- Recommend that you not contact a credit bureau directly;
or
- Advise you to dispute all information in your credit
report or take any action that seems illegal, such as
creating a new credit identity. If you follow illegal
advice and commit fraud, you may be subject to
prosecution.
You could be charged and prosecuted for mail or wire fraud if
you use the mail or telephone to apply for credit and provide
false information. It's a federal crime to make false statements
on a loan or credit application, to misrepresent your Social
Security Number, and to obtain an Employer Identification Number
from the Internal Revenue Service under false pretenses.
Thanks to the Credit Repair Organizations Act, it's also a crime
for anyone offering credit repair services to require you
to pay until a 3 day right of rescission period after they've delivered the services.
What to do if you've had problems with credit repair agencies:
Many states have laws strictly regulating credit repair
agencies. States may be helpful if you've lost money to credit
repair scams.
If you've had a problem with a credit repair agency, don't be
embarrassed to report the company. Contact your local Consumer
Affairs Office or your State Attorney General (AG). Many AGs have
toll-free consumer hotlines. Check with your local directory
assistance.
You also may wish to contact the FTC. Although the Commission
cannot resolve individual credit problems for consumers, it can
act against a company if it sees a pattern of possible law
violations. If you believe a company has engaged in credit fraud,
send your complaints to: Correspondence Branch, Federal Trade
Commission, Washington, DC 20580.
The National Fraud Information Center (NFIC) also accepts
consumer complaints. You can reach NFIC at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday, or at
http://www.fraud.org on the Internet. NFIC is a private,
nonprofit organization that operates a consumer assistance phone
line to provide services and help in filing complaints. NFIC also
forwards appropriate complaints to the FTC for entry on its
telemarketing and credit repair agencies fraud database.
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