Media contact: Fred Howes (336) 632-4980
One type of business is profiting from the downturn in the economy and taking advantage of desperate consumers – credit repair scams. If you are concerned about late payments adversely affecting your credit report, the Better Business Bureau advises you to beware of credit repair services that promise quick fixes.
Credit repair is one of three types of debt adjusting scams – the other two are mortgage foreclosure/modification and advance fee loans. Credit repair services usually charge a flat fee for their service or a cost per negative item to be removed from your credit report.
The North Carolina Debt Adjusting Act of 2005 made it illegal for businesses to charge North Carolina residents an advance fee before completing any type of debt adjusting service.
Link to NC Debt Adjusting Act: http://www.ncga.state.nc.us/enactedlegislation/sessionlaws/pdf/2005-2006/sl2005-408.pdf
“Credit repair scams do not deliver promised results and can leave consumers in a worse financial position,” said Pauline Morrison, President & CEO of The Better Business Bureau of Central North Carolina.
Credit repair services frequently operate over the internet where they can contact thousands of consumers quickly and inexpensively. Emails, websites and roadside signs promise quick results for a variety of credit problems. However, consumers should beware of these red flags:
- Payment of an advance fee.
- Payment of the fee in cash or by wire transfer only so as not to leave a paper trail.
- Confidentiality clauses that forbid consumers from disclosing their agreement with the credit repair company.
- The “rescue” promise to solve all of a consumer’s financial problems.
- Phone numbers, fax numbers or wire transfers outside the United States.
Consumers who are at risk of becoming victims of credit repair scams include people who are struggling financially to pay their bills, people with credit problems who do not qualify for conventional financing or who have negative items on their credit reports, such as bankruptcy.
Especially vulnerable consumers include older adults, non-English speaking populations and low-income families. These consumer groups are frequently targeted and easily preyed upon by scammers.
“The truth is that these companies cannot provide you with any service that you cannot do yourself for free,” added Morrison. “No one can guarantee that they can increase your credit score or legally remove negative information from your credit report.”
If you are concerned about your credit report or credit score, you can contact each of the three credit bureaus to obtain a free copy of your credit report. If you find inaccurate or outdated information, you can challenge negative items yourself directly with each credit bureau at no cost to you.
Credit Bureaus:
The BBB has free information you can trust. Consumers can check out a business to get a free Reliability Report online by visiting the BBB website at www.bbb.org.