If it's too good to be true, it probably isn't.
Recently, the FTC (Federal Trade Commission) and the Postal Inspection Service went after some of these "services." Here is a quote from a recent FTC press release:
“Credit repair schemes are a big problem for consumers,” said Eileen Harrington, Deputy Director of the FTC’s Bureau of Consumer Protection. “Credit repair promoters generally charge hundreds of dollars, but don’t deliver on their claims. The fact is, they can’t. No one can legally remove accurate and timely information from your credit report.”
Here are some recommendations from the FTC on how to avoid these schemes:
- Avoid any company that wants you to pay for credit repair services before they provide any services. It is against the law.
- Avoid any credit repair company that will not tell you your legal rights and what you can do, yourself, for free.
- Avoid any credit repair company that tells you not to contact a credit reporting company directly.
- Avoid any credit repair company that advises you to dispute all of the information in your credit report.
- Avoid any company that suggests creating a “new” credit identity – and then, a new credit report – by applying for an Employer Identification Number to use instead of your Social Security number. That is against the law. If you follow illegal advice and commit fraud, you also may be subject to prosecution.
To sum up the FTC's intent in the recent efforts to stop this:“We have two goals with this announcement,” Harrington said. “One is very specific. It is to stop Bad Credit B Gone’s deceptive practices, and force them to return their ill-gotten gains to consumers. The other is broad. It is to put other credit repair firms on notice that we are on the beat, and it is to alert consumers that there is absolutely no reason to pay for credit repair – ever. Despite their claims, there is nothing that any credit repair firm can do for you for a fee that you cannot do for yourself at little or no cost.”
If someone was trying to repair their finances "at little, or not cost," the FTC has a page with all the details - including people's legal rights.
If you think someone has - or is trying to scam you - file a complaint, here.