Identifying and Avoiding Credit Repair Scams
Many people find themselves in a situation where they have developed bad credit. Those who hope to become financially stable will be in search of the best tactics and resources to repair credit damage.
That is a great idea, but be on the lookout: credit repair scams are popular—and dangerous.
There are people out there who are willing to take advantage of your situation for their own personal gain.
Let’s look at some of the warning signs that will help you identify and avoid credit repair scams.
Removing Reported Information
If a credit repair company claims that they will be able to remove information that has already been reported, it’s probably time to move on.
This is not something these companies have the ability to do. If they make this claim, they are lying at best and scamming at worst. Either way, it’s not worth sticking around to find out.
Another red flag is when a company says they will help you get past your bad credit by creating a new identity for you. Perhaps they’ll say that they will make you a new social security number or federal employer identification number.
Once again, this is not something these companies are able to do (nor should you want them to!). They’re just trying to create false expectations, so they can get their hands on your valuable information.
Waiving Your Rights
In almost any situation, it’s a bad idea to sign a form that waives your rights. Rights are there for a reason: to protect you.
In this case, they will want you to sign a form that waives your rights under the CROA (Credit Repair Organizations Act). Do not sign the form; signing a waiver could me you can’t take action against the company later on if you do unearth a credit repair scam.
As in any situation involving a contract, you should always have the opportunity to thoroughly examine its contents before signing. If that opportunity isn’t given to you, do not sign the contract.
If you are given the time to check out your contract there are a few things you should make sure to look for. The contract should include:
- how much you are expected to pay
- what services will be performed on your behalf
- when the services will be completed
- the name and address of the company
- your right to cancel the contract within 3 days.
If any of this information is missing from your contract, it’s most likely a credit repair scam.
Take Action Immediately
If you suspect a scammer, take the necessary steps to protect yourself and others. Depending on where you came across the fraudster, there are various organizations you can contact.
- Each state has its own credit repair scam protections. Contact your state Attorney General for local assistance.
- The Federal Trade Commission should also be notified. They can’t help fight individual cases, but your information will help identify possible patterns of fraud.
Most credit repair scammers ask for upfront payment or a deposit before they’ll provide any services. Since you probably lost money in the scam, you’ll want to get it back!
- You can sue to regain the money you lost.
- You can “punish” the company for their actions by requesting punitive damages.
- If you know other people who have also been taken in, you can join together for a class action lawsuit.
Lastly, you’ll certainly want to contact eConsumer Services®. If you paid for the credit repair scam with a credit card, eConsumer Services® can help get your money back. Since you’re probably not interested in dealing with those scammers again, we’ll do all the communicating on your behalf.
Fill out the form to the right and we’ll get started right away. This credit repair scammer has put you though enough stress and heartache already; now it’s time to start taking real, effective and honest steps towards financial stability.