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Credit Repair Fraud: Protect Yourself from Scams

Learn about credit repair fraud and how to protect yourself from scams. Understand your rights and the relevant credit laws. Find legitimate credit counseling services and resources to help you improve your credit.

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Credit Repair Fraud: Protect Yourself from Scams

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  1. CREDIT REPAIR FRAUD The Florida Bar Consumer Protection Law Committee Speakers Bureau

  2. What is Credit Repair Fraud? "Credit Problems? NO problem ..." "We can erase your bad credit! 100% guaranteed." "We can remove bankruptcies, judgments, liens, and bad loans from your credit file, FOREVER!" "Create a new credit identity - Legally!"

  3. Can’t My Credit Be Cleaned Up? • Accurate negative information CANNOT • be erased! • Accurate information within 7 years of reporting • or 10 years for Bankruptcy. • Only time can heal a Bad Report. • Hiding bad credit may be Illegal! • Do not apply for a New Identity.

  4. Questionable Practices • Pay before services are provided • Fail to tell you legal rights • Suggesting a new Credit Identity • Advising you to dispute everything on your Credit Report

  5. Credit Laws • The Credit Repair Organizations Act Credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. • The Federal Fair Credit Reporting Act (FCRA)Promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. • The Equal Credit Opportunity Act (ECOA)Prohibits credit discrimination on the basis of sex, race, marital status, religion, national origin, age, or receipt of public assistance.

  6. Credit Laws cont’d • The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) Procedures for resolving mistakes on credit billing and electronic fund transfer account statements. • The Fair Debt Collection Practices Act (FDCPA) Personal, family, and household debts. The FDCPA prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts.

  7. Self Help • Contact creditors. • Contact local non-profit credit counseling services. • Employer, credit union, housing authority may have services. • Get FREE copy of your Credit Report. • Send disputes in writing, they must be placed in your report.

  8. Credit Counseling • Services to help debt management, budgeting • Counselors certified in consumer credit, money • and debt management. • Non-profit does not mean LEGITIMATE!

  9. More on Counseling • Counselors discuss your entire financial situation with you • Help you develop a personalized plan to solve your money problems. • Free information about the company Did you see American Idol last night?

  10. How to Evaluate Counselors • What services do you offer? • Are educational materials available for free? • Will you also help me develop a plan for avoiding problems in the future? • What are your fees?

  11. Evaluate Counselors (cont’d) • Can’t Afford to Pay? • Licensed • Qualifications • Compensation No Problem! Yes! Yes! Reasonable!

  12. The Bad Counselor • Guarantee remove unsecured debt. • Using their system will let you avoid bankruptcy. • Require substantial monthly service fees. • “Stop making payments to or communicating with your creditors.” • Pay them

  13. A Few Cases Two companies made claims that they could improve consumers’ credit ratings have violated federal laws, according to the Federal Trade Commission. The FTC asked a federal district court to halt both companies’ illegal business practices. A federal judge has ruled that a credit repair company and its owner made false and misleading claims, and billing in advance for its services, and deceptively claimed they could remove negative information from consumers’ credit reports – even if that information was accurate and timely has ordered them to pay more than $322,000.”

  14. A Few Good People www.Annualcreditreport.com www.FTC.gov Attorney General Fraud Hotline 1-866-966-7226 www.myfloridalegal.com

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