Credit Repair Scams and How You Can Avoid Them
Due to the growing problem of credit repair scams, deciding which credit repair company you should hire can be difficult. While there may be a number of legitimate credit repair companies to choose from, there are, of course, some that should definitely be avoided.
Credit Repair Companies That Should Be Avoided
In order for you to understand which companies to avoid and why, you should have a basic understanding of the laws that govern the credit repair industry. Once you know what credit repair companies can and can’t do, it will be easier to spot a service that’s operating illegally.
How does the Credit Repair Organizations Act Reveal Credit Repair Scams?
The Credit Repair Organizations Act (CROA) is a set of statutes that manage the way credit repair companies distribute services. When credit repair companies are operating illegitimately, it’s probably because they haven’t complied with the rules set forth by CROA.
Such companies are what sometimes cause people to associate legitimate credit repair with “credit repair scams.” As a result, non-compliant compnaies are hurting the overall industry by causing wide distrust amongst consumers, making difficult for them to select an effective solution to their credit problems. That’s why it’s so important to educate yourself on the rules that govern credit repair and your rights as a credit repair customer.
As stated by CROA, credit repair organizations:
• Cannot advise you to lie or be dishonest about your credit history
• Must give you a detailed disclosure of your rights in regard to credit repair
• Must not perform services without a written and signed contract
• Must provide a detailed description of any services performed and the charges applied
• Must provide a detailed description of any guarantee that’s offered with services
How the Credit Repair Companies are “Scamming” You
Quite often, people mistakenly assume that a credit repair scam involves some kind of total loss—for example, when a company takes your money and performs no service. This kind of situation is certainly unlawful, but credit repair scams can often be much less-noticeable. When a credit repair company is non-compliant with the rules listed previously, it may be deemed a “risk” to potential credit repair consumers, and therefore, may be considered a “scam.”
That’s why you should understand your rights as a credit repair customer. Knowing what credit repair companies can and can’t do will help you to spot the compnaies that are risky.
3 Common Credit Repair “Tricks” To Avoid
Charging Up-front Fees: THis is illegal. Credit repair companies should not charge you until after the specified services are performed. These services and their asscociated fees should be described clearly in your contract.
Disputing Accurate Information: This is illegal. Credit repair companies should know better than to dispute information that you (or they) know to be accurate. If they do, or they suggest that you do, they are operating illegally and can make your credit problems even worse. Be wary of the compnaies whose services are limited to dispute letters.
Posting Fake Testimonials: This is illegal. The Federal Trade Commission does not authorize any company to lure in potential customers by using fake testimonials. If a company knowingly launches a fake testimonial, they are breaking the law. You have a right to make educated decisions about the services you wish to purchase and should be free of misleading sales information.
If you want to have success with credit repair, you should learn all you can about the laws that apply to the credit repair industry. It will help you to make informed decisions when it comes to purchasing creditrepair services and will help you avoid the most common related scams.
If you want to learn more about credit repair or credit repair scams, contact a certified credit specialist at My Credit Group.
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