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Credit Card Debt Can Increase Vulnerability to Scams

On Behalf of | Sep 16, 2010 | Credit Card Debt, Firm News

The current troubles with the economy have made consumers more vulnerable to credit score repair scams. Across the nation and in Florida credit card debt, car payments, mortgages and overdue bills weigh on consumer’s minds. Falling for a scam not only costs money, but can provide a short term false sense of security while matters get worse in the meantime.

Earlier this month the Federal Trade Commission settled a case it brought against Clean Credit Report Services Inc. of North Miami, Florida. The company had run a campaign of radio, television and internet advertisements offering to repair credit scores for consumers. The commercial messages included people identified as clients of the credit repair company offering testimonials on behalf of the firm. The Federal Trade Commission cited a testimonial from a woman that claimed the credit repair service raised her credit score from 480 to 621 in two months.

According to the Federal Trade Commission the company promised to boost credit scores for people even if the information in the files was current and accurate. Under federal law, companies and people offering to repair credit cannot make “untrue statements” about what they are able to accomplish. Current and accurate information cannot merely be deleted from credit files overnight.

The company charged an average of $400 in upfront fees to provide services.  The Federal Trade Commission said the company then did “little, if anything, to fulfill the promises made.” Federal law prohibits charging upfront fees to repair a credit score.

Under the settlement, Clean Credit Report Services and its principals will reportedly forfeit ten properties, a Mercedes and a $165,000 bank balance. The cash and proceeds from the sales of the other property will be deposited into a restitution fund for former clients of Clean Credit.

Source: The Washington Post, “As credit scores fall, more consumers vulnerable to credit-repair scams,” Kenneth R. Harney, 11 Sep 2010

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