Credit Repair Scams

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A credit repair scam for credit counseling where an alleged financial company offers to repair one’s damaged credit or increase one’s credit score in exchange for a sum of money. Frequently, these entities place ads on the internet or in newspapers claiming to be credit “consultants” or “advisors”. Additionally, these advertisements sometimes state that the company will “clean up” a negative credit report.

Finally, some credit repair scams promise to get one a credit card even though the individual has not been able to obtain a credit card previously. However, the way that the company goes about obtaining the card and what the company obtains on your behalf is not really what the individual is seeking to obtain.

How a Credit Repair Scam Happens

A credit repair scam usually works by a company charging an individual a significant, and sometimes exorbitant, amount of money in exchange for either reducing the individual’s debts or increasing the individual’s credit score. Thereafter, the credit repair company disappears with the money and does not perform any of the services promised. Additionally, some entities promise to provide one with a credit card.

Use of a Secured Credit Card

However, the card obtained is frequently a certain type of a card, known as a secured credit card, where there are application fees, minimum savings account depository fees associated with the card, or limits the usage of the card to a certain retailer. Moreover, other credit repair scams attempt to obtain credit cards for their clients on the basis of other individuals’ financial history, which is a crime.

Example of a Credit Repair Scams in the News

In 2009, two individuals who appeared on television’s “Wife Swap” as husband and wife plead guilty to a Canadian telemarketing scheme and are presently serving jail time as a result of the plea. Mr. and Mrs. Ralph Guastaferro, among a lengthy list of charges, were charged with activity which included telemarketing that requested customers to pay a fee for securing a loan or repairing their credit.

Filing a Claim for a Credit Repair Scam

Pursuant to the Credit Repair Organizations Act, a credit repair organization is not permitted to make false claims regarding the services they purport to provide, nor can they force you to provide any payment until after they have provided the services. In addition, they cannot perform services unless they have obtained a fully executed written contract, which includes a three day waiting period wherein you are entitled to cancel the contract without penalty. In addition, the contract must fulfill specific criteria, including but not limited to payment terms, services to be performed, business contact information and guarantees.

Legal Help

In the event that one has either not entered into such an agreement or has entered into such an agreement but has not received the services promised, one may seek to obtain the services of an experienced credit repair scam attorney. This attorney can not only assist in sorting out the fall out of exactly where your credit currently stands, but also the attorney may be able to assist you in repairing any further damage and in the filing of any appropriate claims and/or criminal charges, if necessary.