From
ABC News, as a result of a Press Release from the Federal Trade Commission.
This is about the "credit repair" industry. They aren't necessarily the guys in the white hats!
Frankly it "galls" us that as debt collection attorneys, we work hard to collect legitimate debt that individuals and corporations owe. As a matter of internal policy, we are always respectful of the rights and situations of the debtors we contact. Most have simply fallen behind, some were oversold credit, some lost their jobs. Our experience though is that most would take care of their debt if given the right combination of time and motivation. And the debt collection industry has a horrible reputation, and is subject to massive legislation.
Then there is the industry on the other side of the equation. The guys supposedly wearing the white hats, the ones everyone loves.. Credit Repair Companies. These folks are largely (although not entirely) unregulated, and many will take advantage of those who are desperate and can least afford their services.
So from the FTC through ABC News, here are the three worst things you can do with credit repair companies.
1. NEVER pay in advance for credit repair and debt settlement services, its illegal. Countless lawsuits have been filed against companies in this business that simple took the money and did.. absolutely nothing. That's your hard earned money.. that could have really helped you by paying down some debt.
2. Pay Credit Repair companies for what you can easily do your self. A credit repair company that says they can get true, but unflattering infomration off of your credit report is flat out lieing to you. If there is information on your credit report that isn't true, a simple letter from you is all it takes, not a high priced credit repair company.
3. Paying for debt settlement services. Here's the pitch.. are you ready... "Pay a voluntary contribution to our free services" (that's an illegal upfront fee, but is pretending to be something else) Stop all communications with the people you owe money too (that will really motivate them to work with you won't it!) and we will force them to settle for pennies on the dollar (well, we won't settle with them for any less than we will settle for you, and, your credit report will be impacted by the fact that its a settlement).
The truth is, this shady industry that promises to get you out of all your troubles might have a few people that truly believe in what they are doing, but they are mostly extorting a buck out of a segment of the population that can least afford it. If you truly want to help your debt situation, take the money these guys would have taken from you, and offer it to the people trying to collect, explain it's what you have, and how can they work with you.
The guys in the white hats... well.. if it sounds to good to be true, it probably is.
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