Credit Repair Scams and Internet Fraud
Don't Risk Your Reputation and Money
Credit is a way of life for most Americans, which is why having an accurate credit report is so vital for today’s consumer. And since nearly 80 percent of all credit reports contain inaccuracies, many people seeking help are turning to businesses that offer credit report repair services.
Discovering that your credit report contains errors is frustrating, but being ‘victimized' by an unethical credit repair agency adds insult to injury. Initially, the appealing services offered and promises made by unethical credit repair agencies are very enticing to those struggling to find a way out of their financial difficulties. When one is sinking in the sand, it’s natural not to be real selective when grasping for a nearby branch. But in this case, it pays to survey the situation carefully before deciding on the best solution. First and foremost, take time to investigate and compare credit repair services.
In their quest for your hard-earned money, many credit repair agencies push the ‘marketing’ envelope, making bold claims and elaborate-sounding, yet meaningless guarantees in an attempt to stand out from the competition and win your business.
Some credit repair scams involve agencies that pose as a credible law firm to falsely persuade you that a retained, licensed, legal professional is working on your credit case. These Internet scams and deceptive marketing tactics are not easily recognizable on the Web, so be wary of any credit repair agency that won’t fully disclose their company information and/or verifiable identity, provide a complete address (beyond a Post Office Box). Also stay away from agencies that demand large fees in advance of services rendered.
Beware of any credit repair business that says “we promise to do anything” or “we guarantee to remove your negative items” from your credit report. Some are even brazen enough suggest that they may be able to remove bankruptcies from your credit report. The truth is, bankruptcies cannot legally be removed from credit reports and are typically listed for 7-10 years. The credit repair businesses claiming to be able to do so are making false and misleading statements to you. Call the Federal Trade Commission (FTC) and give them the agency’s information.
The Red Flags of Credit Repair Scams
- Stay away from companies that recommend that you not contact a credit bureau directly.
- Do not pay any up-front fees. Unlike credit repair agencies, law firms require a retainer, but this is standard practice and warrants the greatest results. However, many credit repair agencies ask for several hundred dollars (or more) up-front. Some of these companies will gladly take your money and then disappear.
- Beware of companies that are unwilling to explain your legal rights as well as what you can do yourself – at no cost.
- Legitimate services will clearly outline their procedures for improving your credit.
- Don’t deal with companies that are eager for you to invent a "new" credit report by applying for an Employer Identification Number to use instead of your Social Security Number. It is a Federal Offense to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.
Unlike law firms, credit repair agencies have been heavily regulated because of increasing consumer complaints of credit repair scams. Consumers often place their trust in the agency and are easily swayed by Internet con artists in hopes of cleaning their credit reports but instead find themselves hundreds (or even thousands) of dollars 'lighter' while still suffering from the impact of incorrect information on their credit report.
For More Information
The FTC is an excellent resource and works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace.
To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
For additional information about Internet fraud and unethical credit repair agencies, visit Ovation Law’s Educational Resource Center and download the informative, free online publications.
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