Scams Involving Credit Repair
Nicholas Boler asked:
It is a sad reflection of the world that we live in today that so many different people are not only able but actually willing to profiteer at the expense of other people, and seek to make a quick buck from other people’s misfortunes. The so called credit crunch has really caused a massive global recession meaning that more and more people are finding it difficult to obtain credit and loans and worse yet, are finding that poor or even less than perfect credit ratings are coming back to haunt them. Such people will either find their applications rejected outright, or if they are extremely lucky will be granted a loan with rather excessive interest rates attached to them.
A person’s credit rating/score is used as by financial institutions to determine the level of risk that the applicant poses, and whereas previously money lending was a boom industry with rather lax criteria, now the financial organizations are seriously tightening the net so to speak. With loans with affordable repayment schedules becoming ever increasingly hard to come by many people are going to rather extreme lengths to try and salvage their rather poor credit score.
A rather sad effect of all this is that whilst the legitimate finance sector has declined, the illegitimate one has expanded rapidly and among all of the scams that crooks will subject victims to, one of the most increasingly common and popular is the credit rating repair scam. This scam involves a company purporting to help repair a poor credit rating and in some cases (if their own overblown, bombastic hyperbole is to believed) actually resurrected from the dead.
Consumers, please note that there is an entire wealth of information provided for credit agencies, the federal government and through citizen advice bureaus. This information is readily available in the public domain and is totally free and so if a credit rating repair company should ever demand a fee for their services then walk away very quickly.
If they happen to require a fee to be paid upfront before any sort of advice or counseling is provided then be prepared to never see your cash again. Such companies that engage in such practices tend to have a rather nasty habit of mysteriously disappearing never to be found usually within an extremely short time frame.
These fraudulent companies prey on human weakness and peoples desperation and so they often make offers that are incredibly tempting. One such example is where credit repair companies will offer their clients an opportunity to create an entirely new credit account which will allow for the client to quash all their outstanding debts, and start afresh to deal with creditors as they so wish. Think about this logically for a second. If every consumer were able to do that, then how on earth would the finance sector have any guarantee that people would be able to afford the repayment schedules? How could banks determine beyond reasonable doubt that a prospective client is who they purport to be? Exactly.
While this offer sounds tempting, there is a very simple word for it: fraud. The government takes a very dim view on this particular form of credit repair, and the law makes no real distinction between the credit company that instigated the idea and presented as a valid and legal option and the unsuspecting consumer who was an unwitting part of this criminal conspiracy.
Ignorance of the law is not a legitimate legal defense, and so you may find it a hard sell trying to convince the judge that you did nothing wrong.
Poor credit ratings is a major concern and because of the significant potential for abuse and criminal conduct, the government has founded a number of different initiatives each of which are intended to help educate consumers as to their rights. Being creditworthy, paying bills on time and being a responsible consumer is a big requirement but a necessary evil. The government has no wish to see consumers struggle with debt and poor credit ratings and so will be more than happy to advise consumers as to the best possible course of action to take for any given situation.
It is a sad reflection of the world that we live in today that so many different people are not only able but actually willing to profiteer at the expense of other people, and seek to make a quick buck from other people’s misfortunes. The so called credit crunch has really caused a massive global recession meaning that more and more people are finding it difficult to obtain credit and loans and worse yet, are finding that poor or even less than perfect credit ratings are coming back to haunt them. Such people will either find their applications rejected outright, or if they are extremely lucky will be granted a loan with rather excessive interest rates attached to them.
A person’s credit rating/score is used as by financial institutions to determine the level of risk that the applicant poses, and whereas previously money lending was a boom industry with rather lax criteria, now the financial organizations are seriously tightening the net so to speak. With loans with affordable repayment schedules becoming ever increasingly hard to come by many people are going to rather extreme lengths to try and salvage their rather poor credit score.
A rather sad effect of all this is that whilst the legitimate finance sector has declined, the illegitimate one has expanded rapidly and among all of the scams that crooks will subject victims to, one of the most increasingly common and popular is the credit rating repair scam. This scam involves a company purporting to help repair a poor credit rating and in some cases (if their own overblown, bombastic hyperbole is to believed) actually resurrected from the dead.
Consumers, please note that there is an entire wealth of information provided for credit agencies, the federal government and through citizen advice bureaus. This information is readily available in the public domain and is totally free and so if a credit rating repair company should ever demand a fee for their services then walk away very quickly.
If they happen to require a fee to be paid upfront before any sort of advice or counseling is provided then be prepared to never see your cash again. Such companies that engage in such practices tend to have a rather nasty habit of mysteriously disappearing never to be found usually within an extremely short time frame.
These fraudulent companies prey on human weakness and peoples desperation and so they often make offers that are incredibly tempting. One such example is where credit repair companies will offer their clients an opportunity to create an entirely new credit account which will allow for the client to quash all their outstanding debts, and start afresh to deal with creditors as they so wish. Think about this logically for a second. If every consumer were able to do that, then how on earth would the finance sector have any guarantee that people would be able to afford the repayment schedules? How could banks determine beyond reasonable doubt that a prospective client is who they purport to be? Exactly.
While this offer sounds tempting, there is a very simple word for it: fraud. The government takes a very dim view on this particular form of credit repair, and the law makes no real distinction between the credit company that instigated the idea and presented as a valid and legal option and the unsuspecting consumer who was an unwitting part of this criminal conspiracy.
Ignorance of the law is not a legitimate legal defense, and so you may find it a hard sell trying to convince the judge that you did nothing wrong.
Poor credit ratings is a major concern and because of the significant potential for abuse and criminal conduct, the government has founded a number of different initiatives each of which are intended to help educate consumers as to their rights. Being creditworthy, paying bills on time and being a responsible consumer is a big requirement but a necessary evil. The government has no wish to see consumers struggle with debt and poor credit ratings and so will be more than happy to advise consumers as to the best possible course of action to take for any given situation.
