Better Business Bureau has received multiple reports from local consumers who were solicited with unwarranted credit-debt repair offers over the phone or through their voicemail messages. Many of the scam solicitations are aimed at those with good and/or nonexistent credit.
Some consumers received calls from a company that goes by "Debt Relief Center," which uses statements like "last courtesy call," then claims to help consolidate debt and lower credit card interest rates as low as 1.5 percent. On voicemail messages, representatives ask for a call back at 1-877-442-8079—a phone number that differs from the one on the caller ID. On the phone call, the company allegedly requests credit card information to conduct a "financial analysis," and for $40, promises to connect consumers with a non-profit credit counseling agency—a process consumers can do themselves for free.
BBB is unable to verify if Debt Relief Center is legitimate; as the company uses a common name, claims it doesn't have a Web site and refuses to disclose its business location.
"Although there are legitimate credit counseling organizations, there are also unscrupulous companies that will mass-bait as many individuals as possible—without consideration of their credit or debt status—just to see how many bites they get." said Robert W.G. Andrew, CEO of BBB serving Alaska, Oregon and Western Washington. "Even BBB's phone system has received calls and voice messages with unfounded debt reduction and credit repair offers."
Credit Repair Services, Credit–Debt Consolidation Services and Credit-Debt Counseling are industries that BBB closely monitors.
According to the Federal Trade Commission's 2009 Consumer Sentinel Network Data Book'slist of top complaint categories nationwide, Advance Fee Loans and Credit Protection/Repair ranked 9th and Debt Management and Credit Counseling ranked 19th. Advance Fee Loans and Credit Protection/Repair also ranked 4th on Oregon's top fraud and consumer complaint list.
Indicators of a Credit Repair Scam:
- The company uses a generic name to make it difficult for consumers to research them; or refuses to provide basic information on its location, length of time in business, affiliated companies, etc.
- The company wants payment or financial information before providing any services or a contract.
- The company advises against contacting creditors, lenders, or the three major credit reporting companies directly.
- The company embellishes its "success rate," without proof; and claims you can dispel all negative credit information from your credit report, regardless of its accuracy.
Credit-Debt Repair Advice:
Know Your Rights, Get the Facts:
- Through the Fair Credit Reporting Act (FCRA), consumers are entitled to a free credit report every 12 months and have the right to dispute inaccuracies on their own. Click here for more information.
- Avoid companies that don't explain your rights. Under the Credit Repair Organizations Act (CROA), credit repair companies should supply a copy of the “Consumer Credit File Rights Under State and Federal Law” before a contract.
- Don't spend money on services not rendered. According to the CROA, credit repair companies cannot require payment until services are completed, as promised.
For more credit or debt repair tips, check with your BBB and the Federal Trade Commission (FTC). Report complaints to your BBB and the state Attorney General's office.