Tips for avoiding credit repair scams

Most of us have seen the claims: We can help you repair your credit. What most of these advertisements are out for, is to get your money. In fact, consumers who have credit problems may very likely find themselves shelling out hundreds and even thousands of dollars to unscrupulous frauds who claim to be able to help.  These tips for avoiding credit repair scams can help you stay out of trouble and not spend your hard earned dollars for nothing.

Know your consumer rights

Debtors should be aware of their consumer rights granted under the Consumer Protection laws. Many consumers are not aware that they may request their credit reports free of charge one time annually.  In fact, the Federal Trade Commission (FTC) worked with the three major credit bureaus to allow consumers this right. Do not fall for advertisements that offer free credit reports with the subscription of other services.

Know the statutes of limitations

Collection agencies call consumers on debt that they have often forgotten about. Some of these agencies use “strong-arm” tactics to get debtors to pay something on old debts. The primary reason for this is that the collection agent is only paid if the consumer makes payments, the secondary reason is that a payment restarts the statute of limitations on the debt. Make sure you know the debt statute of limitations in your state.

Understand your rights to dispute

Consumers have the right to dispute any information that they believe is erroneous on their credit reports. This does not have to be done by an attorney or a “credit repair company”, it may be done by the consumer at no charge. Credit reporting agencies are required by law to respond to all disputes.

Know the signs of a scam

The following are some hints that you may be facing a credit repair scam:
  • Upfront payments - the company is asking the consumer to pay an upfront fee before they do any work. The FTC states that these agencies are to be reported as there are prohibitions on fees.
  • Misinformation - the company does not advise you of your rights to remove certain items on your own or tells you to not contact the credit reporting agency. Consumers are always able to contact credit agencies for information regarding their own credit reports.
  • Suggests fraud - any company that suggests the debtor dispute valid debt or apply for a new social security number is likely not legitimate. Any agency that suggests that a consumer dispute legitimate debts should be reported to the Better Business Bureau or to the Federal Trade Commission (FTC).
When a consumer receives a solicitation for a credit repair service, they should be provided with a copy of the Consumer Credit File Rights under State and Federal Law. This document explains the consumers rights and helps protect them against fraud by credit repair scams. Consumers who have any questions about information can contact the FTC for additional information.

According to the Federal Trade Commission, consumers have a right to receive a contract that clearly spells out what the credit repair company intends to do on their behalf. It is important to note that under specific laws, credit repair companies cannot request payment prior to performing the services promised to consumers. These laws provide that credit repair agencies specify in the contract exactly what they intend to do and the fee for each service.

Credit Payoff and Repair Scam

As many of you know, I spend a fair amount of time on LinkedIn groups largely because there are so many diverse people on the network. However, one of the biggest problems with LinkedIn is anyone can post anything they want with little (or no) danger of getting banned. One of the posts I've seen is a group of people promoting a "Government Grants for getting out of debt". I'm here to tell you, it is NEVER going to happen! 

Here's the "overall" gist of their message "When looking to pay off credit card debt, one of the most overlooked options many people have are government grants. Many people do not look into these grants because they simply do not know about them. However, the government sets aside billions each year just for this purpose, to give them away. If you are one of the millions of people who are suffering from credit card debt, you definitely want".

Well, there's a reason that most people don't look into it and don't know about them. It's because THEY DO NOT EXIST. I've written about these government grant scams before, but unfortunately, I see these guys are back in full force. What particularly amuses me about this one is the folks who are claiming they are legit.

Like the LAWYER WHO LIES TO PEOPLE on a regular basis and rips them off for simple things they need for their website like Terms of Service and Privacy Policies. I've written about this con artist in the past too, this guy charges you over $2,000 dollars to "LICENSE" a TOS and PP. Seriously? Get a life pal!

Here are some informational articles about these Government Grant Scams that can help keep you out of trouble!

Free money from stimulus? Are you kidding? Web sites offering grant money from the government are bogus

Advertisements Promising Debt Relief May Be Offering Bankruptcy Directly from the Federal Trade Commission 

The bottom line is there is NO easy way out of debt. You'll get out the same way you got in. One payment at a time.