It’s already bittersweet paying a credit repair company hundreds of dollars to do something you could do for yourself. What’s downright heartbreaking, though, is when you decide to trust them and relieve yourself of the job, and they let you down by breaking the law. The Consumer Financial Protection Bureau (CFPB) says that’s what Prime Marketing Holdings has been doing to consumers who sought their credit repair help. And the CFPB is suing them for it.
What They Allegedly Did Wrong
According to the CFPB, Prime Marketing Holdings:
- Collected upfront fees. Credit repair companies are required to provide the service before charging consumers a dime. These illegal fees included set-up fees and fees for “special” credit reports, as well as monthly fees that consumers often didn’t know they were being charged.
- Didn’t tell consumers that the money-back guarantee only applied if they paid for at least 6 months of service.
- Led consumers to believe it was easy to have negative listings removed from credit reports, regardless of accuracy.
- Led consumers to believe their credit repair services would lead to a “substantial” increase in their credit scores.
For these violations, the CFPB is suing Prime Marketing Holdings so as to refund affected consumers.
What to Watch Out For
If you are considering hiring a credit repair company, be sure you know the red flags to look for first:
- Illegal upfront fees. If they ask for money before they’ve performed the service, don’t do it.
- Unrealistic promises. No matter who tries to repair you credit, there are no guarantees. Listings may or may not be removed. Your credit score may or may not improve. And it doesn’t happen quickly; credit repair takes as long as it takes.
- Improper disclosures. Make sure you receive a written contract and that it is acknowledged you have 3 business days to cancel. Make sure you know exactly what it’s going to cost and when you will be charged for what. And make sure they are open to answering any and all questions you have.
- Creating a new identity. Under no circumstance is this a good idea; huge red flag.
Should you find yourself doing business with a company that violates any of these laws, report them immediately to the CFPB.
What You Can Do Instead
Repair your credit on your own. While there are legitimate credit repair companies out there, there is nothing they can do for you that you cannot do for yourself. And you can do it for nothing more than the cost of postage. Let our credit repair articles walk you through it every step of the way.