Beware of Credit Repair Firms: But Don’t throw the baby out with the bathwater

Most of the credit repair, TILA audit, Loan mod etc firms are incompetent, perhaps dishonest, and definitely misleading. BUT SOME ARE ON THE LEVEL. CHECK IT OUT. GET REFERENCES — REAL REFERENCES.

FTC Sues “Credit Repair” Firms for Misleading Consumers

On October 23, 2008, the Federal Trade Commission (FTC), along with 24 state agencies, announced the commencement of “Operation Clean Sweep,” a coordinated effort aimed at the deceptive practices of so-called “credit repair” firms.  Credit repair firms typically promise to remove bankruptcy filings, foreclosures, late pays, charge-offs, repossessions, collection accounts, and other accurate information from consumers’ credit histories.

Under the Credit Repair Organizations Act, and the Federal Trade Commission Act, credit repair firms are forbidden from promising to remove accurate information from credit reports.  Credit repair firms are also forbidden from collecting a fee in advance of performing services to amend credit reports.  According to the FTC’s press release announcing Operation Clean Sweep, the purpose of the FTC’s action was to prevent credit repair firms from taking money from consumers for services that could not be provided.

The FTC filed its lawsuits in Florida, Illinois, and California, and named as defendants Nationwide Credit Services, Inc.; Clean Credit Report Services, Inc.; Successful Credit Service Corp.; Advantage Credit Repair L.L.C.;  RCA Credit Services L.L.C.; Latrese and Kevin Enterprises, Inc., dba Hargrave and Associates Financial Solutions; and Ace Group, Inc.  According to the FTC lawsuits, the credit repair firms charged consumers up-front fees ranging from $39.95 to $4,000.  Sometimes a monthly service fee was imposed as well.

The FTC’s press release advised that consumers considering credit repair remember the following:

  • Don’t pay for credit repair services in advance.
  • Don’t hire a credit repair firm that fails to inform you of your legal rights, and how you can repair your credit yourself.
  • Don’t hire a credit repair repair firm that discourages you from contacting a credit bureau yourself.
  • Don’t hire a credit repair firm that advises disputing every entry on your credit report.
  • Don’t listen to a credit repair firm that advises creating a new credit identity by applying for an Employer Identification Number, to use in place of your Social Security Number; this is unlawful and may constitute fraud.

The FTC advises consumers to remember that federal law provides the right to have erroneous information corrected by the credit reporting agencies free of charge.  Further information about Operation Clean Sweep can be found on the FTC website, and its October 23, 2008, press release, at

3 Responses

  1. The above mentioned tips shoudl be well taken. In all actuality, if you can read and follow this blog, then you have more than enough capacity to repair your own credit.

    It’s simply a matter of knowing what you can do under the law and how to do it. I suggest looking up your rights to dispute with the Bureaus under section 611 of the FCRA, and to dispute with the creditors under 623.

    The FCRA is codified as 15 USC 1681 et seq.

    If you’re in collections you can use the FDCPA in conjunction with the FCRA for some pretty powerful results in cleaning up that report.
    Credit info Center has some wonderful advice on the 1-2 punch method using both of these statutes in conjunction.

    And if you’re looking for a community just for credit repair, all for free of course, you can join the forums at

    and Credit Info Center

    If you wish, you can contact me personally. I’m not a lawyer, nor do I claim to offer legal advice, I merely pass on what has worked for me in the past.

    lueser2.0 at gmail dot com

  2. There are many scammers out there, and a few really great credit repair firms. Depending on how bad off your credit is, you may be able to fix it yourself. Check out my post on how to tell if you can DIY–-can-you-really-do-it-by-yourself-87

  3. […] WORKSHOPS COMING UP 9.5 CLE Credits Florida Attorneys ← Beware of Credit Repair Firms: But Don’t throw the baby out with the bathwater […]

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