Understanding The Credit Repair Organizations Act
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Have you or someone you know been a victim of a credit repair scam? Maybe you have spent thousands of dollars to have your credit repaired and years later there is very little, if any difference. If this sounds familiar you are not alone. Credit repair scams have become so rampant that there has been a law enacted to protect consumers from their fraudulent activities.
In writing
You must receive your contract in writing. You must be given a copy of the “Consumer Credit File Rights Under State and Federal Law” before signing a contract. The written contract must spell out your rights and obligations. The contract must specify:
• Payment terms
• Total cost for services
• Length of time for completion of services
• Detailed description of services
• Promises or guarantees
• Company’s name and address
It is in writing for a reason. Read it. Make sure you understand it before you sign anything.
False advertising
A credit repair organization may not make any false claims. They cannot legally promise what they cannot deliver. They cannot promise you results that require them or you to perform fraudulent activities. Telling you that your accurate negative information will all be removed legally is untrue. If it is accurate then time is the deciding factor. The date of the occurrence is when the 7 or 10 year clock starts ticking. Negative credit card debts or loans that are over 7 years can and should be legally removed.
Paying up front or as you go
The Internet is full of advertisements for credit repair promising that if you will pay $19.99 a month to $59.99 a month they will repair your credit and give you a wonderful score. The truth is that a credit repair agency cannot ask for payment until the services are rendered. They are not allowed to perform any service until you have signed the contract and the three-day waiting period, in which you can change your mind with out being charged, is up. Many companies want a credit card number, that they promise they will not use without permission, to bill you automatically. Others want to do an ACH debit monthly. Stopping these charges can become a time consuming mess.
Victim
If you have been a victim, contact your local consumer affairs office or your state Attorney General’s (AG) office. There are free consumer hotlines to most AGs offices. Don’t be to embarrassed to report what happened. The company that ripped you off was betting that you would feel too stupid to report it, that way they could continue ripping off consumers with impunity. Take a stand; let the scammers know enough is enough. The buck stops at your bank.
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