Credit Repair – Page 2 – Attorney Driven Credit Repair

Credit Repair Scam – Fight Back

April 15, 2013 by Eric Stephenson

Are you a victim of a credit repair scam? Credit repair scams are rampant in the consumer credit industry. Even though credit repair companies are governed by both federal and state law, these companies often disregard their legal obligations. The main statute that governs credit repair companies is the Credit Repair Organizations Act. Also known as CROA, the Act prohibits credit repair companies from making false promises, requiring consumers to pay before work is fully performed, or helping consumers create false identities to repair their credit. Many state laws work with CROA to provide consumers with additional protection. Nonetheless, even with these consumer credit laws many credit repair companies continue scamming consumers.

If you are a victim of a credit repair scam here are some tips you can follow to get your fees refunded:

Keep All Documentation

First, keep everything you have pertaining to your credit repair service. Gather proof of your payments, credit reports, letters, notes, phone calls, text messages, and all other documentation you have regarding your case. Without documentation you will have a difficult time showing the credit repair organization scammed you. Even with documentation it may not be as easy as you think.

Request a Refund

Your next step is to request a refund. Many credit repair companies will freely give a refund to prevent you from taking any further action. If it refuses your first request keep trying. Once you escalate your refund request to a supervisor you stand a good chance of getting a refund. Be persistent and be polite.

BBB Complaints

One way to put pressure on the credit repair company to issue a refund is to file a BBB complaint. This non-governmental agency cannot file a lawsuit for the credit repair scam but filing the BBB complaint may get you a refund. Oddly enough, they actually have a better chance of getting you a refund than complaining to any government agency. It’s about pressure. The BBB puts public pressure on companies which often helps resolve consumer complaints effectively. Filing the BBB complaint also puts other consumers on notice that the company is perpetrating a credit repair scam.

Sue the Credit Repair Company

If the credit repair company continues to refuse to issue a refund you may choose to file a lawsuit against the credit repair company. You can do this on your own in small claims court or you can hire a consumer protection attorney to assist you. If you hire an attorney he will help you develop your claims and most will take your case on a contingency basis so you don’t pay them unless you win. If you go to small claims court on your own you should still consult a consumer rights lawyer who can evaluate your claims and look for possible defenses, tricks, and traps.

FTC Complaints

Another step you can take is to file a complaint with the FTC. The FTC will not take your case or file a lawsuit on your behalf but it is helpful to other consumers if they can track the companies committing credit repair scams. Do not expect them to help you individually. They won’t.

Attorney General Complaints

Filing a complaint with your local attorney general is also useful to other consumers. Unfortunately, however, like the FTC complaint, an attorney general complaint won’t get you individual assistance. The attorney general will not file a lawsuit on your behalf and, in most cases, won’t get you a refund. If you take this step file the complaint with your local attorney general no matter where the credit repair company is located.

Conclusion

If you are a victim of a credit repair scam, take action. Gather your evidence, file your complaints, and pursue a lawsuit if needed. Don’t let a rogue credit repair organization rip you off and get away with it. If you need assistance contact a consumer protection attorney who can help you.

Credit Repair Scams: Part Two

March 15, 2013 by Eric Stephenson

We previously discussed a few common credit repair scams but believe it or not, there are additional deceptive or fraudulent acts in the credit repair world to be cautious about.

Purposely Delaying the Credit Repair Process

Most credit repair companies charge monthly fees which encourages them to work slowly or inefficiently. The simple fact is that the longer you stay enrolled the more money they make. Credit repair does take time but if the company has already disputed every disputable item twice and tells you the third time is a charm, they are probably lying. The truth is that disputing an item three or more times without any additional justification is highly unlikely to result in a deletion. The only certainty in this situation is that sending the additional disputes will cost you additional monthly fees.

Contractual Waivers of Consumer Rights

Though not strictly considered a credit repair scam, almost all credit repair companies put a waiver of your consumer rights clause in your contract. Arbitration clauses or waivers of your right to participate in a class action are the most common waivers used but others occur as well. In certain situations, such waivers are void and considered to be deceptive sales practices under the Credit Repair Organizations Act (CROA) and also under many state unfair practices acts. In some situations these waivers are actually legal, however, so consult a consumer rights attorney to find out whether this is a violation in your state. Frankly, however, even if these waivers were not unlawful or deceptive you should ask yourself if you really want to do business with a company that proclaims to be a champion of consumer rights yet is so willing to trample yours.

Taking Credit for False Deletions

Credit trade lines naturally fall off your reports after a certain amount of time. The period varies but is generally seven years. Some credit report repair organizations take credit for these natural fall-offs even when the company made no contribution whatsoever to that deletion. They will even take credit for items removed as a result of the client’s self-help efforts. Taking credit for the work of others or for the mere passage of time is a shameful practice but is rampant among credit report repair companies.

Misstating or Falsifying Results

Most credit repair organizations brag about their results. Testimonials are most common but numerous websites purporting to be unbiased reviews are also typical. Though it is difficult to detect which ones, many of those website reviews and testimonials are outright fakes. In many circumstances, the company will use commissioned agents or affiliates to enroll clients. Because the paychecks of these salesmen are tied directly to enrolling clients, they have ample incentive to falsify or exaggerate past results. Be cautious of any company who brags about past results that cannot be independently verified.

Conclusion

These and other credit repair rip-offs are shockingly common in the credit repair industry. Your best method of avoiding these scams is to completely ignore mainstream credit repair companies. Instead, do your own credit repair or find a licensed consumer law attorney who takes his oaths of integrity, diligence, and confidentiality seriously. Either way, it is always good practice to use your best judgment and never rely solely on the words of easily faked testimonials or commissioned sales persons.

Credit Repair Scams

March 11, 2013 by Eric Stephenson

You may be surprised to know that there are many common types of scams in the credit repair industry. Under federal law any deceptive or fraudulent act by a credit repair organization is considered a credit repair scam but other acts can also be unlawful. Many states also have similar prohibitions.

Deceptive Representations

The most common credit repair rip-offs occur when the credit repair organization falsely promises or implies that it can achieve specific, improbable, or illegal results or that it has some special authority that other companies lack. Under the Credit Repair Organizations Act (CROA) such implications are prohibited. Numerous credit repair organizations commit this violation; however, it occurs most often with credit repair companies who use commissioned salesman to enroll clients. Because sales are driven by commissions, the truth is often obscured by false promises and outright deceptions.

Failure to Adhere to State Registration Requirements

In most states, credit repair organizations are required to register with the state as a credit repair organization. Many companies ignore this requirement and choose instead to operate unlawfully without the registration. Doing so violates not only many state deceptive sales practices acts but also violates CROA. A lack of the required registration is a credit repair scam because it constitutes an untrue or misleading representation of the credit repair organizations services and also constitutes a fraud or deception that the company is operating lawfully when it is not. This violation is surprisingly common.

Charging Fees before the Work is Fully Performed

Another commonly used tactic is to charge the consumer fees before the credit repair firm has fully completed the promised work. This ordinarily occurs when the firm charges a fee to setup the case without performing any substantive work or charges a monthly fee without performing any work the previous month. Indeed, such billing practices are fairly common in the industry.

Failure to Provide Required Disclosures

A less prevalent though still significant credit repair scam arises when the credit repair company fails to provide the consumer with the federally required disclosures. Under federal law, these companies are required to provide certain disclosures to the consumer to instruct the consumer of their legal rights. Some companies fail to provide the disclosures in any form while others provide only partial disclosures. Either way is unlawful.

Conclusion

There are numerous other scams or rip-offs related to credit repair but the few discussed above are the most common. To avoid these swindles you should only hire a credit repair company who takes its ethical and legal obligations seriously and specifically charges you only for actual work performed rather than charging you junk fees to merely start your case. Use diligence and don’t rely solely on website reviews or a high volume of advertised clients to choose a credit repair partner. In most cases, your best partner in credit repair is going to be a local consumer law attorney who will work with you personally and in strict adherence to CROA and his state bar requirements.