With the economy in the toilet there has been a sharp rise in people trying to make a quick buck at the expense of other people. This seems to be the case in almost every type of business; those Americans who make the least get taken advantage of the most. I have noticed this trend especially rampant when its comes to transaction that deals with credit and money.
I am seeing warnings issued by the BBB in several states that speak about Loan Audits and Credit Repair companies being scammers, this response from the BBB is in correlation with a rise in complaints against these companies. So, how do you know if you credit repair agency is a scam? Here are the top 5 red flags:
- Promises to remove ALL negative information, regardless of how accurate it is.
- Promises a BRAND NEW credit file (this can be done, but is frowned upon)
- Requires an upfront payment
- Fails to provide you with a contract and a 3-day cancellation window
- Fails to provide the “Consumer Credit File Rights Under State and Federal Law” disclosure as required by federal law
Credit repair is 100% legal and 100% legit, if you do your homework and research the requirements a CRO (credit repair agency) must meet before being able to perform these services for paying clients. A paying client is one who exchanges credit repair services in return for the payment of money or other valuable consideration. The red flags above are what I believe to be the biggest indicators of a scam in progress.
Credit Repair Organizations Act
The federal government has passed the Credit Repair Organizations Act which is a set of rules and regulations that our government has set forth to help protect consumers from scammers. This act was signed by the President on September 30, 1996. Part of this act allows for a consumer to sue the CRO (credit repair agency) for damages and Attorney’s fees. The time limit for suing is 5 years; however it allows for the 5 year period to start once the consumer is aware of the infraction or scam. Example: Sue hired a CRO 6 years ago to repair her credit, they never contacted her again after she paid them the money and they never provided her with a contract. Sue didn’t realize this was against any laws until today. Sue’s 5 years start from today.
How we differ
We do provide credit repair and loan audits as part of our services and we strive to comply with both State and Federal Law. We will never make promises or guarantees we can’t back up and we will present you with a contract to sign as well as 3-days to change your mind before providing credit repair services. If you check with the BBB, we have ZERO complaints against us. Our credit repair services are a flat fee regardless of how many disputes we initiate on your behalf. All letters are sent CMRRR (costs about $5.36 each), this creates a papertrail in the event the consumer must file a FDCPA or FCRA lawsuit against a creditor.
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