Credit “Repair” Promoters Face $1 Million Penalty: “August 11, 2003
One of the country�s largest credit-repair operations has agreed to pay more than $1.15 million in consumer redress to settle Federal Trade Commission charges that it violated federal law.
The settlement resolves charges leveled by the FTC against six Michigan-based defendants in a federal court complaint. The defendants, who sell credit-repair services through a multilevel marketing organization, allegedly falsely claimed that they could remove derogatory information from consumers� credit reports, even if that information was accurate and not obsolete.
The defendants purported to do this through the use of a �one-of-a-kind� computer disk that they claimed could search and identify errors in the process used by the credit reporting agencies to enter negative items onto consumers� credit reports. The Commission�s complaint alleges that the defendants� representations about the computer disk are false and deceptive.
�Consumers who find themselves with less than perfect credit histories should be wary of anyone offering a quick fix to the problem,� said Howard Beales, Director of the FTC�s Bureau of Consumer Protection. ‘Mistakes can be corrected, but there is no substitute for time and self-discipline to improve your credit report if the information is accurate.�”
Credit Repair Promoters Face $1 Million Penalty
FTC Bans Bogus Operator from Credit Repair Business
i-Newswire, 2005-05-25 – In 1999, Florida Attorney Jack Schrold settled charges that he violated the FTC Act and CROA by making deceptive claims about improving consumers’ credit reports and requiring advance payment for credit repair services. The court order settling these accusations prohibited Schrold from saying he could improve substantially consumers’ credit reports by removing accurate, but negative, information that was verifiable and not obsolete, making false claims about the services he sold, charging consumers before credit repair services were finished, and violating CROA.
In 2004, at the FTC’s request, the Department of Justice initiated civil contempt proceedings against Schrold, alleging that he was violating the 1999 order. Schrold agreed to settle the contempt allegations, and as a result of that settlement the court has entered a modified order against him.
The court order announced today requires Schrold to pay $100,000 in civil penalties and permanently bars him from:
advertising, marketing, or selling any credit repair service, or assisting others to do so;
violating the FTC Act by representing directly or by implication that he is able to improve substantially consumers’ credit reports by removing negative information from them where such information is accurate, verifiable, and not obsolete; and
violating CROA.
The modified order also contains standard recordkeeping provisions designed to assist the FTC in monitoring Schrold’s compliance.
Consumers should know that nothing you can do – or pay someone to do – can legally remove negative information that is accurate, verifiable, and not obsolete from your credit report. Only time, a deliberate effort, and a plan to repay your bills will improve your credit record. If your credit reports contain inaccurate or incomplete information, however, you do have the right to have that information corrected. This is something you can do yourself. For information on disputing credit report errors and other information about your consumer credit rights, please visit the FTC’s Web site at http://www.ftc.gov or call the 1-877-FTC-HELP ( 1-877-382-4357 ).
The Commission vote approving the filing of the modified order was 5-0. The modified stipulated judgment and order for permanent injunction and civil penalties was filed by the United States Attorney’s Office for the Southern District of Florida and the Department of Justice’s Office of Consumer Litigation, at the request of the FTC, in the U.S. District Court for the Southern District of Florida. It was entered by the court on April 22, 2005. The matter was handled by the FTC’s Midwest Region.
Copies of the modified stipulated judgment and order are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish ( bilingual counselors are available to take complaints ), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP ( 1-877-382-4357 ), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
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Credit Repair Scam
Scams every where… Be careful. The bes way not to be a victim is to arm yourself with knowledge. Read this Credit Repair Blog
FTC Bans Bogus Operator from Credit Repair Business
By U.S. Federal Trade Commission ( FTC)
Jun 2, 2005, 06:06
An operator who charged consumers for services he did not deliver and misrepresented customers’ credit worthiness to the credit reporting agencies has been banned for life from operating a credit repair business. Settlement of the charges also bars further violation of the Federal Trade Commission Act and the Credit Repair Organizations Act (CROA), and requires the defendant to pay $100,000 in civil penalties.
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Credit Repair: Self Help May Be Best
Credit Repair: Self Help May Be Best
By U.S. Federal Trade Commission ( FTC)
Jun 2, 2005, 06:07
You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims:
“Credit problems? No problem!”
“We can erase your bad credit — 100% guaranteed.”
“Create a new credit identity — legally.”
“We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”
Do yourself a favor and save some money, too. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.
This brochure explains how you can improve your creditworthiness and gives legitimate resources for low or no-cost help.
The Scam
Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money.
The Warning Signs
If you decide to respond to a credit repair offer, look for these tell-tale signs of a scam:
companies that want you to pay for credit repair services before they provide any services.
companies that do not tell you your legal rights and what you can do for yourself for free.
companies that recommend that you not contact a credit reporting company directly.
companies that suggest that you try to invent 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.
companies that advise you to dispute all information in your credit report or take any action that seems illegal, like creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution.
You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.
Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
The Truth
No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):
You’re entitled to a free report if a company takes adverse action against you, like denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
Each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – is required to provide you with a free copy of your credit report, at your request, once every 12 months. The companies are rolling this out across the country during a nine-month period. By September 2005, consumers from coast to coast will have access to a free annual credit report if they ask for it. For details, see Your Access to Free Credit Reports at ftc.gov/credit.
Otherwise, a consumer reporting company may charge you up to $9.50 for another copy of your report within a 12-month period.
You can dispute mistakes or outdated items for free. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the consumer reporting company and the information provider.
STEP ONE
Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the one on page 6. Send your letter by certified mail, “return receipt requested,” so you can document what the consumer reporting company received. Keep copies of your dispute letter and enclosures.
Consumer reporting companies must investigate the items in question – usually within 30 days – unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so they can correct the information in your file.
When the investigation is complete, the consumer reporting company must give you the results in writing and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the consumer reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The consumer reporting company also must send you written notice that includes the name, address, and phone number of the information provider.
If you request, the consumer reporting company must send notices of any correction to anyone who received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.
If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service.
STEP TWO
Tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct – that is, if the information is found to be inaccurate – the information provider may not report it again.
For more information, see How to Dispute Credit Report Errors at ftc.gov/credit.
Reporting Accurate Negative Information
When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting: information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.
For more information, see Building a Better Credit Report at ftc.gov/credit.
The Credit Repair Organizations Act
By law, credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. The law contains specific protections for you. For example, a credit repair company cannot:
make false claims about their services
charge you until they have completed the promised services
perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees
Your contract must specify:
the payment terms for services, including their total cost
a detailed description of the services to be performed
how long it will take to achieve the results
any guarantees they offer
the company’s name and business address
Have You Been Victimized?
Many states have laws regulating credit repair companies. State law enforcement officials may be helpful if you’ve lost money to credit repair scams.
If you’ve had a problem with a credit repair company, don’t be embarrassed to report it. While you may fear that contacting the government will only make your problems worse, remember that laws are in place to protect you. Contact your local consumer affairs office or your state Attorney General (AGs). Many AGs have toll-free consumer hotlines. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.
Need Help? Don’t Despair
Just because you have a poor credit report doesn’t mean you won’t be able to get credit. Creditors set their own credit-granting standards and not all of them look at your credit history the same way. Some may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.
If you’re not disciplined enough to create a workable budget and stick to it, work out a repayment plan with your creditors, or keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But not all are reputable. For example, just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.
Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
For more information, see Knee Deep in Debt and Fiscal Fitness: Choosing a Credit Counselor at ftc.gov/credit.
Do-It-Yourself Check-Up
Even if you don’t have a poor credit history, some financial advisors and consumer advocates suggest you review your credit report periodically
because the information it contains affects whether you can get a loan or insurance – and how much you will have to pay for it.
to make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.
to help guard against identity theft. That’s when someone uses your personal information – like your name, your Social Security number, or your credit card number – to commit fraud. Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.
Sample Dispute Letter
Date
Your Name
Your Address
Your City, State, Zip Code
Complaint Department
Name of Company
Address
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.
This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.
Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.
Sincerely,
Your name
Enclosures: (List what you are enclosing)
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
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60-Second Guide to Managing Your Credit
“Who cares about your credit record? Even if you don’t give a hoot, your mortgage broker, insurer, employer, and even your future bride just might. Take 60 seconds to familiarize yourself with this important measure of your fiscal health.
0:58: Don’t panic.
While people talk of your credit report — and your credit score — as the end-all-be-all gauge of your money acumen, in reality it is just one measure of your overall financial health. It does not take into account how much you have saved for your retirement or how generous you are to the Salvation Army bell ringer during the holidays. It is simply a snapshot of your borrowing habits used by the lending industry as a quick, objective assessment of consumer risk (or ‘credit trustworthiness’).
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Who Has the Keys to Your Credit File
Fool.com: Who Has the Keys to Your Credit File? [Motley Fool Take] January 20, 2005: “Guess who has the keys to your credit file? You already know that banks, credit card companies, mortgage lenders, and car financiers size you up by your credit record. But they aren’t the only ones taking a peek.
The scope of ‘permissible purposes’ and ‘legitimate business needs’ (legal-speak for ‘yeah, you can have access to this sensitive data’) is growing. Absent further legislation to more specifically restrict the uses of your credit report, anyone who can legally make a case for needing to can size up your borrowing ways.
More and more companies are finding a permissible purpose to access your credit file.
Employers can do an investigative report to see whether you have a criminal record or other transgressions that might speak ill of your character. If you have significant responsibilities when it comes to handling corporate funds, an employer can deny you employment based on your credit history.
Landlords and potential landlords are also allowed to check your credit history and can deny you a rental if they aren’t comfortable with you as a credit risk.
Insurers also use your credit report as a determining factor in assessing your risk as a driver and homeowner, which has a direct effect on your insurance premiums.
Utilities, cable companies, and ISPs are getting in on the action, too. Their rationale is that they are fronting you the first month’s worth of service and are therefore extending you credit. This allows them to check your report and score to see whether you’ll be a good risk and possibly deny you service or charge you premiums if your credit scores are too low.
The good news is that you can check the checkers. Your credit file contains a list of ”
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annual credit report
Free Credit Report Program Expands to the South
June 1, 2005
As part of the updated Fair Credit Reporting Act (FACTA) passed in January 2004, U.S. citizens have the right to annual free credit reports from all three major reporting agencies. The program expands to cover people living in the South today. See a map of the rollout below.
This central site, www.annualcreditreport.com, allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. (FAQ).
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FREE Money Ideas – Insurance
Insurance – Credit/Debt Management:
”
Auto Insurance:
Save several hundred dollars by purchasing auto insurance from a licensed, low-price insurer. Call your state insurance department for a publication showing typical prices charged by different companies. Then call at least four of the lowest-priced, licensed insurers to learn what they would charge you for the same coverage.
Talk to your agent or insurer about raising your deductibles on collision and comprehensive coverage to at least $500 or. If you have a car valued at under $3000, consider dropping these coverage altogether. The other vehicle is still covered by insurance if an accident is your fault and if it’s not your fault, your vehicle is covered by the other driver’s insurance.
Drop unnecessary coverage. Do you really use towing and road service? Is medical duplicated on the job? “Rental” usually has too many restrictions to be of value.
Teens can get a good student discount with a gpa of 3.o. Also, notify your carrier when you have 3 years driving experience since often this means a lower cost.
With one ticket you can go to traffic school and get the point(s) taken off your record so that your rates do not increase. The Internet has made it easy to take a traffic course electronically at a fraction of the cost. Check with your local DMV office if this is an approved method for your county.
If you are 55 or over, there is a course you can take called the “mature driver test”. Take it, pass, and your insurance company can lower your rate.
Multiple cars usually provide a discount on the second car. Also, if you have homeowners insurance, you can sometimes get a break if you carry both auto and homeowner.
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FREE Money Ideas – Groceries & Such
FREE Money Ideas – Groceries & Such:
“Food Purchased at Markets:
You can save hundreds of dollars a year by shopping at the lower-priced food stores. Convenience stores often charge the highest prices.
You will spend less on food if you shop with a list and never shop when your hungry.
Shopping when it is slower not only saves time, but means less time standing near ‘compulsive purchase’ merchandise near the checkout.
You can save hundreds of dollars a year by comparing price-per-ounce or other unit prices on shelf labels. Stock up on those items with low per-unit costs.
Preparing meals rather than pre-packaged meals can save hundreds of dollars per month. If you don’t have time to prepare during the week why not prepare on days off (make it a FAMILY project) and make multiple meals.
Put portions in a plastic bag and freeze it. Instant dinner— but pre-prepared to save.
Clip coupons and organize them by food group or in an expandable check file. DO NOT BUY simply because you have a coupon. Best new deal is that a lot of stores (Safeway locally) have come up with a coupon card. You get automatic coupon price w/o clipping.
You are missing a good deal if you do not frequent “Day Old Bread” stores. You’ll save 33-50%. I rarely pay more than $3-4 for a full bag of bread.
Check for Food Co-Ops in your area. Sometimes joining is only a matter of volunteering for a couple hours per week; yet you can save up to 30% sometimes over conventional stores.
Knowlege of grocery store merchandising can help offset being “snared”. Milk is usually at the back to get you to walk by all the other aisles first. Profitable items are usually at eye level. The bakery is usually at the front to entice you with a fresh baked smell. Compulsive items (candy, gum, tabloids, TV Guide, etc) are at the checkout.
Always check your receipt before you leave the store. Honest errors occur— people can input with the wrong or non-sale price to the computerized scanners and cashiers can also make mistakes.
Plan ahead and get everything you need. Try not to shop more than once a week. The more you go, the greater the temptation to pick up something you don’t need. It also wastes time and gas.
Shop by unit prices and have a calculator.
“Loss leaders” are exceptionally low priced items which the retailer will loose money on to lure you in. However, if other items you need cost more, it is not a good deal.
You may prefer one store for its meats and another for its produce. That’s ok as long as you’re not spending the whole day driving all over the city just to get the best prices.
Stock up on items that will keep and that you can use if you can get a bulk discount.
Store brands or generic items are always cheaper.
You can usually save by buying uncut (unskinned) meats. Recognize the price difference between bone and no-bone cuts. Unless the difference is significant, no-bone is usually the far better buy.
Reduce spoilage by planning your grocery-store stop for last. When you reach home put foods away quickly. Frozen and refrigerated foods should be handled first.
Call the Toll Free Directory (1-800-555-1212) and get the numbers of the companies that make your favorite products. Call and ask to be put on their mailing lists. You can get lots of coupons and free samples.
Healthy Savings:
Eat organic foods when possible. Your best bet is your own garden.
Shipped fruits and vegetables usually cost more and usually have chemical preservatives.
Buying lean cuts is better for you and saves waste.
Read the labels of all processed foods. All ingredients are listed in order of quantity. (Cookie fat content— rub it on a napkin. If it leaves a grease spot, it probably has at least 50% fat.
Save leftovers but do not store unused food in its opened can. Use reusable storage containers. More nutrients are retained if you keep your vegetables whole or cut as little as possible when cooking. Try not to overcook.
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From debt to wealth on $10 a day
From debt to wealth on $10 a day
From ‘Pay it Down’ by Jean Chatzky: 6 ways to pay down your credit cards and build up savings.
September 27, 2004: 9:56 AM EDT
By Jean Chatzky, MONEY Magazine
NEW YORK (MONEY Magazine) – How would you like to be free of credit card debt? To have a financial cushion to fall back on?
To know you have the skills to save and invest for any goal — and to guarantee your financial future? You can get there on $10 a day. If that sounds like very little — well, it is. But it could be the key to your future.
Let’s say you’re the average American. You have a decent job, but you also have $8,000 in high-rate credit-card debt and no savings to speak of. You may not believe that $10 a day can dig you out of that hole. But it can– and in less time than you think.
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