With so many lawsuits being filed by the Federal Trade Commission and the Consumer Financial Protection Bureau against credit repair companies, it truly makes one wonder if, indeed, credit repair companies are legit? The short answer is, yes, but very few of them are.
May 2022 – FTC v Financial Education Services (“FES”)
FES is a large multilevel marketing company that sold credit repair services. It was sued and shut down in May of 2022 by the Federal Trade Commission. The FTC has accused FES of collecting money from the consumer in violation of the Telemarketing Sales Rule which prohibits credit repair companies from collecting any money from consumers before completing the credit repair services if the credit repair company uses the telephone in connection with selling its services.
The FTC has also accused FES of failing to give consumers written agreements in violation of the Credit Repair Organization Act and of lying to consumers and agents about what FES could accomplish for them in their credit repair programs. The FTC has shut FES down and frozen the assets of the company, its related companies, and its owners. That lawsuit continues.
FES was previously sued by the Georgia Attorney General back in 2019 for very similar things. FES was forced to pay a $1.9 million judgment.
March 2022 – USA v Turbo Solutions
This is an interesting case as it was brought by the United States Attorneys’ office directly and not through the CFPB or the FTC. The U. S. Attorney has accused Turbo Solutions and its owner, Alexander Miller of directing consumers to file fraudulent affidavits of identity theft to delete negative items on their credit reports. If true, this is bad. The government has shut down Turbo Solutions and its various entities and frozen their assets.
September 2021 – CFPB v Credit Repair Cloud
Credit Repair Cloud provides DIY software for people who want to get into the credit repair business. The CFPB has accused CRC’s users of violating the Telemarketing Sales Rule and by extension, Credit Repair Cloud.
May 2019 – CFPB v Lexington Law
Lexington Law sounds like a law firm, but it acts as a credit repair company. It charges monthly fees which the CFPB believes violates the Telemarketing Sales Rule. CFPB has also accused Lexington Law of some nefarious sales tactics including having some of its affiliates lie to consumers to get them to sign up for Lexington Law’s credit repair services. That case is poised to go to trial in 2022.
There is just a smattering of the high-profile cases that the government has brought against credit repair companies. There are, unfortunately, many people who hold themselves out as credit repair professionals that fly under the radar of government enforcement, but routinely fleece consumers out of their hard-earned money by making false promises.
If a Credit Repair Company makes any of these promises to you….RUN AWAY!
“We can remove everything negative on your credit report.”
This is simply untrue. Even if you are a victim of identity theft, there is no guarantee that anyone can remove anything from your credit reports. No one can remove legitimately reporting negative information from a credit report. If that were true, then credit reports would be worthless.
You should also note that some credit repair companies dispute everything that is reporting negatively on someone’s credit report. There are two problems with this; 1. It’s illegal for you or your credit repair agent to lie to the credit bureaus. That violates the Credit Repair Organization Act. 2. The credit bureaus know that if someone has more than 1 negative item reporting on their credit report, the chances are very small that all of these items are improperly reported. They ain’t stupid.
“We can improve your credit score to the high 700s within 90 days.”
You should know that no one can honestly tell you what your credit score is going to be in the absence of negative information. First, credit scores are fluid as they can change daily. Secondly, credit scores are influenced by several factors including the amount of available credit you carry, timely made payments, and credit mix. Moreover, not only is not possible to tell someone what will happen to their credit score but it’s not possible to advise as to any time frame. Statements like this are just plain lies.
“We have proprietary dispute letters that force the credit bureaus to remove negative information on your credit reports.”
This is a total lie. There is no magic to removing inaccurately reporting information on a credit report. One simply has to write a letter and identity one’s self and the inaccuracy correctly. Attach supporting documents to prove that the item is inaccurate. That’s all. Some sleazy people who claim to do credit report work will lie about having the silver bullet of credit dispute letters, but they are simply lying.
“We can remove bankruptcies from your credit report.”
Mostly not true. I say mostly because we are working on a lawsuit now where a bad guy pretended to be our client and attempted to file bankruptcy in his name. The bad guy did not have the correct social security number but the bankruptcy still reached our client’s credit report. Short of this scenario, no it’s not possible to remove a bankruptcy reporting on a credit report even if the consumer never completed the bankruptcy plan and even if the bankruptcy was ultimately dismissed. Bankruptcies can stay on a credit report for up to 10 years. It’s a public record.
Legitimate Credit Repair Law Firms (not Lexington Law as it’s not a credit repair law firm) are truly the only legitimate way to fix your credit.
Credit repair law firms are truly the only legitimate way to get your credit report cleaned up from inaccurate or obsolete information for several reasons:
- A reputable credit repair law firm will only dispute items on your credit report for which there is a legal basis. Moreover, because the good credit repair law firms stay on top of the law, they may find things on your credit reports that could be hurting your credit score that credit repair companies may not even know about. This is what comes from staying current on the law and reading the latest case law.
- Reputable credit repair law firms do not charge you any monthly fees. You should know that even though a company may call itself a credit repair law firm, it may be acting as a credit repair company. For example, Lexington Law is the largest credit repair company in the United States. It does not function as a law firm but as a credit repair company. Some people find this duplicitous.
- A credit repair law firm will only send 1 dispute letter to the credit bureaus. If the credit bureaus do not fix the problem, the law firm will sue the credit bureau on your behalf to get the problem fixed. At the end of the case, the law firm should have collected enough money to pay its fees and pay you damages.
- This is the fastest way to remove an inaccurately reporting negative item or items from your credit report without having to write letters, month after month.
- Credit repair is highly regulated in most states and illegal altogether in Georgia. Lawyers are licensed to practice law in the states in which they obtain a law license. They can enforce your rights, as a consumer, wherever the lawyer is licensed to practice.
Conclusion – AZ
If you are trying to legitimately clean up your credit report from inaccurately reporting information, you should see a Credit Repair Law firm. Come visit us at Arizona Credit Lawyers or call us at (480) 771-6001 or email us at [email protected]. We are happy to look at your credit reports for free and give you our opinion as to how we can help.
Join our 3 for Free program and we will send out up to 3 dispute letters for you for free. You can also join our Auto Pilot program and we will pull your credit reports for free every two months to make sure that they stay free of inaccurately reporting information. Call us today.