We previously discussed a few common credit repair scams but believe it or not, there are additional deceptive or fraudulent acts in the credit repair world to be cautious about.
Purposely Delaying the Credit Repair Process
Most credit repair companies charge monthly fees which encourages them to work slowly or inefficiently. The simple fact is that the longer you stay enrolled the more money they make. Credit repair does take time but if the company has already disputed every disputable item twice and tells you the third time is a charm, they are probably lying. The truth is that disputing an item three or more times without any additional justification is highly unlikely to result in a deletion. The only certainty in this situation is that sending the additional disputes will cost you additional monthly fees.
Contractual Waivers of Consumer Rights
Though not strictly considered a credit repair scam, almost all credit repair companies put a waiver of your consumer rights clause in your contract. Arbitration clauses or waivers of your right to participate in a class action are the most common waivers used but others occur as well. In certain situations, such waivers are void and considered to be deceptive sales practices under the Credit Repair Organizations Act (CROA) and also under many state unfair practices acts. In some situations these waivers are actually legal, however, so consult a consumer rights attorney to find out whether this is a violation in your state. Frankly, however, even if these waivers were not unlawful or deceptive you should ask yourself if you really want to do business with a company that proclaims to be a champion of consumer rights yet is so willing to trample yours.
Taking Credit for False Deletions
Credit trade lines naturally fall off your reports after a certain amount of time. The period varies but is generally seven years. Some credit report repair organizations take credit for these natural fall-offs even when the company made no contribution whatsoever to that deletion. They will even take credit for items removed as a result of the client’s self-help efforts. Taking credit for the work of others or for the mere passage of time is a shameful practice but is rampant among credit report repair companies.
Misstating or Falsifying Results
Most credit repair organizations brag about their results. Testimonials are most common but numerous websites purporting to be unbiased reviews are also typical. Though it is difficult to detect which ones, many of those website reviews and testimonials are outright fakes. In many circumstances, the company will use commissioned agents or affiliates to enroll clients. Because the paychecks of these salesmen are tied directly to enrolling clients, they have ample incentive to falsify or exaggerate past results. Be cautious of any company who brags about past results that cannot be independently verified.
These and other credit repair rip-offs are shockingly common in the credit repair industry. Your best method of avoiding these scams is to completely ignore mainstream credit repair companies. Instead, do your own credit repair or find a licensed consumer law attorney who takes his oaths of integrity, diligence, and confidentiality seriously. Either way, it is always good practice to use your best judgment and never rely solely on the words of easily faked testimonials or commissioned sales persons.