Consumer Action Law Centre Warns Against ‘credit Repair’ Companies Promising Quick-fix Solutions

Consumer groups are warning about so-called credit repair services, which claim to be able to remove black marks on your credit history. The Consumer Action Law Centre (CALC) in Melbourne says it has received numerous complaints about such services, with allegations of excessive or hidden fees, and even unauthorised direct debits from customers’ accounts. Mildura couple Susan Enwright, 53, and Laurie Mangan, 56, approached a credit repair company after seeing an ad on TV. “They promised they could wash Laurie’s credit history completely.

They used all the typical scammer tactics like befriending you, keeping you on the phone for hours, wanting to know everything about your life,” she said. After she refused to pay the bill, Ms Enwright says the company became “very belligerent”. The couple sought the advice of the Consumer Action Law Centre, who drafted a letter on their behalf to the company, which subsequently backed down.

Ms Boyd said it was easy for people to feel disempowered about managing their financial affairs, particularly if they found themselves in need of quick credit, which made it easy for credit repair services to charge exorbitant fees. 2000 for an initial fee, and you can be hit with an excessive termination penalty in the hundreds of dollars,” she said.

She also raised concerns about credit repair services using “heavy tactics” against companies to force them to remove negative marks on customers. Ms Boyd said often companies would be threatened with being taken to the Financial Ombudsman Service (FOS) or Credit Ombudsman Service (COSL) should they refuse to remove a negative report. “The credit provider may decide it’s not worth the expense of having the case heard at FOS or COSL and opt to remove the listing. That’s starting to stray into dangerous territory because the consumer’s credit report may actually be an accurate reflection of their situation.

With credit restoration, an individual can permanently repair their financial scores. The goal to credit restoration is to mend mishaps with an individual’s financial standing for long-term stability. Having good credit will allow you to borrow a larger amount of money on loans along with reasonable interest rates. Credit restoration can only start if a person decides to seek financial aid.

The top financial repair services advise their clients to immediately pay off account balances because their credit scores are extremely significant to card balances. By receiving the best credit restoration tips, people will be able to understand how the financial industry functions. If you are in need of credit restoration services, there are many sources online that are able to help you. Once you discover a reliable credit restoration company, they will work with you to setup a plan to help you fix your financial standing.

There are many companies out there that claim they can repair your credit report and get you a high credit score quickly. Unfortunately, many of these companies are scam artists trying to steal your money. Find out how to spot the credit repair scam so you can protect your money and your identity. It promises to remove negative information from your credit report. FACT: No one can legally remove negative information from a credit report that is accurate. Most negative information generally stays on your report for seven years while bankruptcy information can remain on the report for ten years.

The copy of your credit report will include information about how to dispute inaccurate or incomplete information. It requires an upfront fee before any type of credit repair is performed. FACT: Under federal law, credit repair companies can’t require you to pay until they’ve completed the services they’ve promised. It offers to create a new 'credit identity' for you with different identification (such as another Social Security number or business tax ID number).

FACT: It is illegal to commit identity fraud or misrepresent Social Security or business tax ID numbers under false pretenses. It asks you to sign blank forms and provide personal information so the company can act on your behalf to help with credit problems. FACT: Signing blank paperwork and giving out personal identity information can lead to identity theft.

TIP: Never sign blank paperwork and don't give out personal information without knowing the reason and with whom you are dealing. There are no overnight solutions to fix your credit history. Consider speaking with a Financial Empowerment Center counselor to find ways to repair your credit and manage your debt safely and for free.