Better Business Bureau Joins Crackdown On Internet Credit Repair Scams

WALLINGFORD — The Connecticut Better Business Bureau (BBB) has joined the Federal Trade Commission, the Department of Justice, and 47 other federal, state, and local law enforcement and consumer protection agencies that have surfed the Web looking for illegal scams that promise consumers that they can restore their credit worthiness for a fee. Over 180 Web sites are being put on notice that their credit repair claims may violate state and federal laws.

Ten state attorneys general’s offices, 29 Better Business Bureaus, the National Foundation for Credit Counseling, and six of their Neighborhood Financial Care Centers participated in the Internet “Surf Day” looking for credit repair ads that appeared to be making deceptive claims or promoting illegal schemes.

According to Paulette Hotton, president of the Connecticut Better Business Bureau, many credit repair operations “guarantee” that they can remove negative information from consumers’ credit reports, even if the negative information is accurate and timely. They can’t.

More than 60 credit repair operations identified in the “Surf Day” sell instructions about how consumers can substitute a false Social Security number for their current number and “start fresh” with a new credit identity. They claim the scheme is perfectly legal. It isn’t. In fact, it’s a felony.

Any credit repair operation that claims it can improve a consumer’s credit report and charges for that services in advance is violating the Credit Repair Organization Act (CROA), a new federal law designed to help consumers combat fraudulent credit repair scams.

“Credit repair companies challenge everything in a credit report. If the credit reporting agency cannot verify the information within a reasonable time period, the information is removed, but only temporarily. As soon as the information is verified, it is put back in the report,” said Ms Hotton.

“I’d like consumers to remember three things about credit repair,” said Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection. “First, accurate and timely negative information cannot be removed from a credit report in an effort to repair it. Second, it’s not only a bad idea to try to create a new credit identity by using a false Society Security number, it’s also illegal. And third, when it comes to credit repair, only time and a personal dept repayment plan will improve your credit.”

Consumers with inquiries or complaints against a Connecticut company offering credit repair are encouraged to contact the CT BBB by phone, 24 hours a day, 7 days a week, at 203/269-2700, ext 2, or via the Internet at www.connecticut.bbb.org.

The FTC has developed four brochures for consumers that address credit repair schemes: Consumer Finance Scams; Credit Repair, Self-Help May Be Best; File Segregation, New ID is a Bad Idea; and Credit Repair, Help Yourself First. Copies of the consumer brochures about credit issues are available from FTC’s Web site at www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Ave., NW, Washington, DC 20580; toll-free at 877/FTC-HELP – 877/382-4357; TDD for the hearing impaired 202/326-2502.