Finance Globe

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Credit Repair Agencies Charged with Deceiving Consumers

The Federal Trade Commission reported on Wednesday that it has charged seven related companies with violating federal law by falsely promising to remove negative marks on consumer's credit reports.

The complaint was filed in the U.S. District Court in the District of New Jersey. The FTC seeks to make the companies stop violating the law and pay restitution to consumers.

The companies claimed that they could have even accurate, up-to-date negative information removed from credit reports, such as late payments, charge-offs, delinquencies, judgements, and bankruptcies. They charged consumers up to $2000 for their "service" - including $300 in advance.

The companies' promotions include a website ad stating, "100% Guarantee to raise your credit score!" Transcripts from phone calls with consumers include statements such as, "I can't tell you much because I'd be giving you my trade secrets, but I can definitely guarantee that we’ll take care of anything that’s derogatory on her credit report. It’s all legal.”

In addition to facing deceptive marketing charges under the FTC Act, the defendants are charged with violating the Credit Repair Organizations Act by misrepresenting their services; charging in advance for credit repair services; and failing to provide consumers with written contracts and other materials that contain written disclosures required by law or deviating from the required wording for the disclosures.

The defendants charged by the FTC are United Credit Adjusters, United Counseling Services, Bankruptcy Masters Corp., National Bankruptcy Services Corp., Federal Debt Solutions LTD., United Money Tree Inc., and Ahron E. Henoch, Ezra Rishty, and Gerald Serino.

The FTC files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law.

The FTC is nation's consumer protection agency against fraudulent, deceptive, and unfair business practices. If you'd like to file a complaint about an experience of this nature, report it to the FTC online at Complaint Assistant or call 1-877-FTC-HELP.

If you'd like to repair your credit, keep in mind that it will take time, money (to pay your debts), and discipline. There is no "silver bullet" to remove accurate negative marks.

It is possible to have negative marks made into positive marks, or even altogether removed if the creditor or collection agency is willing to negotiate for payment. It will take money to accomplish this, but the money will better serve you going to towards your debts, rather than to a credit repair agency for their services.

There really is nothing that a credit repair agency can do that you can't do yourself for free. Get your free credit report, made available to you by the Fair Credit Reporting Act, at Dispute all inaccurate marks and negative accounts that are older than seven years (ten years for bankruptcy) with the reporting credit bureau. Make arrangements with your creditors to pay debts that are overdue. Your credit won't improve overnight, but it will improve.

It really is as simple as that. Credit repair agencies - even legitimate ones - make their money when a consumer just doesn't know how to go about tackling their debt and their credit, or they are afraid to talk directly to their creditors because they're worried they'll make things worse. The problem is easily solved - read articles and books on credit repair, and deal with your creditors one at a time until they're all satisfied.

But if you decide to use the services of a credit repair agency, know that any legitimate company will tell you that they can't do anything that you can't do yourself for free. They also won't require an upfront payment before they provide services - it's against the law. If an agency tries to collect money from you before doing anything, consider them a fraud and look somewhere else.

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Monday, 26 July 2021

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