Credit Guides And Credit Services

• Allowing consumers with a good faith suspicion they are fraud victims to place an initial fraud alert for (90 days). credit pacific service union

• Permitting consumers who provide an official identity theft report (either the FTC report or local police) to place an extended fraud alert (up to 7 years). credit first service union

• Requiring the CRA that received the alert to pass it on to the other CRAs. card credit mobile service

• Permitting those on active military duty to place active duty alerts. card credit discover service

• When a report contains an alert, requiring CRAs to notify users of discrepancies in addresses. credit public service union

• Prohibit sale or collection of debts resulting from identity theft. card credit processing service

• Preventing fraud-related data from re-polluting a victim s credit report. center credit service union

• Requiring the U.S. banking regulatory agencies to develop Red Flag guidelines, so financial institutions can spot patterns and practices related to identity theft. card credit service wireless

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California Civil Code Sections 1785.16(k) ¹⁷² California Civil Code Sections 1785.15.3 In addition, the 2003 Amendments required rule-making and studies in a host of areas related to credit report accuracy, credit scoring and identity theft by the FTC and the U.S. banking regulatory agencies. credit security service union

These are all welcome and constructive additions to the FCRA. But upon their enactment, consumer advocates and privacy experts were quick to point out that they still did not go far enough. Worse, the federal law preempted state activity in too many areas. credit report service

More work lies ahead. Consequently, the history of the FCRA, or credit report inaccuracy, or identity theft, is far from over. Continue to Next Chapter 2005 Evan Hendricks and Privacy Times, Inc. All rights reserved. Enroll in Credit Repair About Veracity Credit Consultants Contact Veracity Full Refund Policy Veracity Site Map Privacy Statement Terms of Use blogspot com christian

Veracity - History and Overview of Credit Repair

solution that is simple, neat, and wrong. - H. L. Mencken If you want to find an industry with a horrible reputation, you need not look much further than credit repair. And for good reason. In this chapter, we will recount major enforcement actions against credit repair clinics. We will also touch on problems in the credit counseling and debt consolidation fields. But we will also hear from two small companies that say they ethically help consumers correct errors or otherwise improve their credit reports. christian counseling credit

Over the years a steady drumbeat of warnings about credit repair scams have come from the Federal Trade Commission, state Attorneys General, AARP, and Call For Action. Despite these warnings, tens of thousands of consumers over the years, probably desperate to improve their credit reports, have turned to credit repair clinics. Consequently: credit federal service union

• Credit repair clinics collectively are making millions of dollar annually, typically charging consumers about $300-$400 dollars per year. credit monitoring service

• Investigations of and enforcement actions and lawsuits continue against credit repair operators for ripping off consumers. credit division service

• Credit repair clinics continue advertising that they can help remove negative information from your credit report (regardless of its accuracy). card credit online service

Steve Baker, Director of the Federal Trade Commission in Chicago and a leading enforcer of the credit repair law, said a prevailing myth about credit repair is that there are loopholes in the federal law that allow poor credit to be erased. It doesn t exist. consumer counseling credit inc

The Credit Repair Organizations Act

Let s start with the law. Under the Credit Repair Organizations Act (CROA)¹⁷³, and similar state laws, credit repair organizations must give you a copy of the Consumer Credit File Rights Under State and Federal Law before you sign a contract. A credit repair company cannot: card credit fleet service

• Make false claims about their services card consolidation credit

• Charge you until they have completed the promised services credit free online report

• 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.¹⁷⁴ credit federal first service

• How long it will take to achieve the results consumer credit service

• Any guarantees they offer, and center credit family service

• The company s name and business address credit reporting service

Your contract must specify:

• The payment terms for services, including their total cost cca credit division service

• A detailed description of the services to be performed credit free report service

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15 U.S.C. Sect. 1679(h)(b) ¹⁷⁴ These restrictions do not apply to a (1) non-profit organization; (2) creditor restructuring a consumer s debt or (3) depository institution. card credit customer discover

Bombardment Technicalities

A typical technique used by credit repair outfits (CROs) is to flood consumer reporting agencies with letters disputing negative items in the credit report. CROs emphasize that when derogatory information is disputed, credit bureaus must remove it if they are unable to verify it within 30 days. They argue that with enough dispute letters, repeated over time, the credit bureaus will give up. However, the Big Three credit bureaus have ramped up their systems for countering this approach. Not only do their automated systems dispose of disputes with a few keystrokes, but also the bureaus often disregard repetitive disputes as frivolous. Some CROs are known to try and mask their involvement by mailing in dispute letters from different locations around the country. credit repair report service

Some CROs proclaim that they exploit technicalities to remove negative data. For example, if the consumer owes $1, 000.09 debt, and the credit bureau reports it as a $1, 000.90 debt, some CROs argue that all references to the debt must be deleted when disputed. The FTC views such claims as false. credit legal repair service

One case that illustrated the techniques and reach of credit repair was that of National Credit Repair. On August 11, 2003, the FTC announced that National Credit Repair, one of the country s largest credit-repair operations, agreed to pay more than $1.15 million in consumer redress to settle charges that it violated the federal credit repair law. The FTC charged that the six Michigan-based defendants falsely claimed that they could remove derogatory information from consumers credit reports, even if that information was accurate and not obsolete. cic credit monitoring service

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The defendants were ICR Services, Inc.; a Livonia, Michigan-based company; and its three officers and directors, Bernadino J. Pavone, Jr., his mother Gloria Tactac, and Abood Samaan. The remaining defendants were National Credit Education and Review (NCER), based in Canton, Michigan, and its president Todd Renzi. ccs credit division service

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. credit service union worker

Since 1996, the defendants have sold their credit-repair service to more than 183, 000 consumers, taking in more than $53 million on those sales (about $290 per consumer).¹⁷⁶ The company sold its services through a network of 50, 000 sales representatives, who were paid commissions for each sale, the FTC said. 1st credit service union

Get A New Number

Another approach that has drawn enforcement action is known as File Segregation, in which the credit repair outfit shows the consumer how to obtain a new taxpayer identification number (TIN) or employer identification number (EIN) from the U.S. Internal Revenue Service. The consumer is then taught to create a new identity under the number on the theory that it will create a whole new file at the credit bureau and separate the individual from the negative credit history under his true Social Security number. The first problem with this approach is that it is a felony to put false data on a credit application. Second, the credit bureaus algorithms are designed to accommodate discrepancies in identifiers, so that if the individual was still applying under the same or similar name or address, the information could end up in the same file anyway. card chase credit customer

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FTC v ICR Services, Inc., et al.: U.S. Dist. Ct. - Northern Dist. Of Illinois (Eastern Div.) - No 03C-5532; complaint at http://www.ftc.gov/os/2003/08/icrcmp.pdf In October 1999, sixteen defendants agreed to settle FTC charges that their file segregation schemes violated the CROA. The settlements were the result of an FTC s sweep entitled, New ID, Bad IDea. ¹⁷⁷ Thirteen of the sixteen defendants had to refund money to consumers. Three of the defendants showed they lacked enough money to pay refunds. card chase credit service

On May 9, 2001, Clifton W. Cross was sentenced to 49 months in federal prison and ordered to pay nearly $171, 000 in restitution as part of a guilty plea resolving criminal charges stemming from a file segregation ¹⁷⁸ scam. Cross and his company, Build-It-Fast, promised consumers perfect credit... instantly. It showed consumers how to get new Employment Identification Numbers and then substitute them for SSNs when applying for credit. Under a settlement with the FTC, Cross agreed to get out of the file segregation business.¹⁷⁹ citi credit monitoring service

On February 17, 2004, a federal grand jury in Los Angeles returned a nine-count, criminal-contempt-of-court indictment against Richard Murkey Sr., 57, for returning to the credit repair business despite a previous court order that he stay out of it.¹⁸⁰ credit plus service union

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The settlements of the Operation New ID - Bad IDea sweep are with Mehmet Akca (FTC File No. X990018); Frank Muniz (FTC File No. X990020); LSQ International (FTC File No. X990024), Standard Business Services (FTC File No. X990021); Pro Se Publications (FTC File No. X990023); Ross Sanford Leiss (FTC File No. X990026); Michael Lyons (X990027); Edward Lane (FTC File No. X990032); All About Communications (FTC File No. X990030); Express Financial Planning (FTC File No. X990034); Financial Publishers of America (FTC File No X990033); New Start (FTC File No. X990028); Frederick P. Ray (FTC File No. X990066); Internet Publications (FTC File No. X990064); P.M.. Enterprises (FTC File No. X990047); Fresh Start (FTC File No. X990044). credit farm service

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FTC v. Clifton W. Cross, et al.: U.S. Dist. Ct. - Western Dist. of Texas (Midland); No. M099-CA-018 ¹⁷⁹ FTC News Release, June 21, 2001; ww.ftc.gov/opa/2001/06/cross.htm ¹⁸⁰ News Release (No. 04-020), Debra W. Yang, U.S. Attorney for Central Dist. of California, www.usdoj.gov/usao/cac/pr2004/020.html The FTC brought a civil case against Murkey in 1998 for misleading consumers in connection with credit repair. In November 1999, a federal court in Los Angeles found that Murkey systematically violated the credit repair law and banned him from the business. The 2004 indictment charged that immediately following the court s order, Murkey continued to offer credit repair services through businesses such as Credit Restoration Corporation of America, Inc. In 2001, the L.A. court held Murkey in civil contempt, but he again returned to credit repair, the indictment charged. 1st credit federal service

There is only so much that civil enforcement can do against scams like credit repair, said Howard Beales, then Director of the FTC s Bureau of Consumer Protection. We appreciate the Justice Department s willingness to pursue the criminal sanctions that con artists so richly deserve. credit paychex service tax

To Boldly Go...

An even more exciting scheme allegedly was operated by the husband-wife team that co-owned Second Chance Financial, a credit repair outfit based in Riverside, Calif¹⁸¹. According to an August 2004 federal grand jury indictment, Mickey Lynn Manning and her husband, Ross Smith allegedly recruited employees from the major credit bureaus Equifax, Experian and TransUnion who would enter false and misleading information into their databases with the purpose of improving the credit scores of Second Chance credit repair customers, stated a press release from Los Angeles U.S. Attorney Debra W. Yang. credit service tax

Also indicted was Marcus Brandon Betts, of Ontario, Calif, a former team leader of Trans Union s Dispute Dept. in Fullerton, Calif., for falsifying credit report data on behalf of paying customers who wanted to improve their credit scores. aeon credit service

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Remember, all those mentioned were only charged and had not been convicted of anything. People are presumed innocent until proven guilty. But the information is in the public domain and the story is quite compelling. credit one service union

The 16-count indictment named Dolores Guerrero, a Customer Service Representative on Experian s Dispute Team in the Dallas facility, as an unindicted co-conspirator. Guerrero pleaded guilty to fraud in May 2004 and is serving a prison term of more than three years, officials said, adding that she was paid $300-$500 a week in bribes. bad cell credit phone service

No Equifax employees were named in the press release or the indictment, but a source said the husband-wife team had recruited operatives at Equifax s dispute facility in Jamaica. It was the first known case of credit bureau employees being accused of illegally working on behalf of outsiders. counseling credit debt service

How They Did It

This investigation started in 2002 when, according to sources, Experian noticed a pattern of suspicious activity, specifically entries on credit histories that were made by one employee. That employee was terminated. A joint review by the credit bureaus prompted them to refer the matter to law enforcement authorities. Second Chance Financial helped their credit repair customers in two ways. According to the indictment, in 2001, they would send to their accomplices at the credit bureaus fictitious dispute letters to justify deletion of negative data from their customers credit histories. The credit bureau employees would then delete negative items from client credit reports and place the fictitious dispute letters in their credit bureau s files. card credit payment service

Second, they worked with at least three other conspirators who allegedly were employed at companies like J J Financial Services, of Fort Lee, N.J. (Jose L. Crespo); Diamond Star Financial, of Teaneck, N.J. (Jamila Takiyah Davis); and Superior Financial of Valencia, Calif. These firms allegedly became subscribers of the major credit bureaus and then fraudulently reported positive loan histories on the credit repair clients. This, combined with the removal of negative data, had the effect of raising clients credit scores. The indictment estimated $6 million in losses to more than 50 businesses. At the time, lawyers representing those who were indicted told reporters either that their clients would plead not guilty or that they had no comment. card credit merchant

¹⁸² Privacy Times

, Vol. 24 No. 16, Aug. 31, 2004 Where To Draw The Line The Credit Repair Organization Act (CROA) is very broad in prohibiting for-profit companies from accepting advance payment for help in improving one s credit record, or providing advice or assistance to that effect¹⁸³. But several consumers have alleged in separate federal lawsuits that credit monitoring services are doing just that in violation of CROA. One suit charged that ConsumerInfo.com, a Web site where consumers paid a $79.95 annual subscription for unlimited access to their Experian credit reports¹⁸⁴. The suit said that the company acted like a credit repair outfit because it took money up front, provided consumers with a Blueprint for Rebuilding Your Credit, and offered a service that helped generate dispute letters. Moreover, a Yahoo search using the term credit repair consumerinfo turned up the phrase, How Can I Repair My Credit Rating and a link to the www.consumerinfo.com. The company strongly denied it engaged in credit repair and defended itself in the lawsuit, which was pending when this book went to print. counseling credit family

Similar suits are pending against Trilegiant Corp. s PrivacyGuard. ¹⁸³ While some legal experts wonder whether such a broad prohibition on commercial speech could withstand Constitutional scrutiny, no successful challenge has yet been brought. ¹⁸⁴ Ronald W. Helms v. ConsumerInfo.com, Inc.: U.S. Dist. Ct. N. Dist of Alabama (Middle Div.) - No. CV-03-RRA-1439-M The Modern Landscape annual credit report request

As of January 2005, it appeared that a handful of companies dominated the credit repair industry. One market leader was Lexington Law Firm, based in Salt Lake City, Utah. According to its Web site, Lexington began operating in 1991 and has served over 100, 000 consumers. It claimed to have challenged and deleted 350, 174 negative items on credit reports in 2003. (Lexington cannot delete items; presumably, it meant that its disputes prompted the CRAs to delete the negative items.) area bay credit service

Lexington required a $79 payment covering what it called a case setup. New clients were required to sign a retainer agreement. In accordance with federal regulation, Lexington charges retroactively for the service it performs, billing $39 for the dispute work performed in the previous month, the firm stated on its Web site. (Remember, the Credit Repair Act prohibits for-profit companies from collecting fees in advance for disputing credit report errors.) atlanta consumer counseling

Lexington s Web site said its system works in cycles. Clients begin by sending in their three credit reports. The firm enters the information in a database, and presents the client with a list of disputable items. The client chooses which items to dispute, and Lexington then sends dispute letters to the CRAs. (Lexington considers these dispute letters to be trade secrets and will not share them with anybody, including the client.) account card credit merchant

When you receive a response from a bureau, make a copy of the updated report for your records then send the original to Lexington to move your case forward. Thus the cycle begins anew, this time hopefully with fewer negative items on your credit report, the Lexington Web site states, describing the fourth step in the cycle. aspire card credit customer

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www.lexingtonlaw.com The annual cost is $508 ($79.00 initial + 11 months $39.00/ea). After 12 months, clients are entitled to a refund if Lexington does not effectuate deletion of at least 11 negative items. It calculates that each deleted item has a $50 value. So, if only two items are deleted, the client is entitled to a $408 refund, according to the Web site. The Lexington Web site sports both the Better Business Bureau seal (BBB) and separate seal for BBB s Online Reliability Program. Clicking on the first seal takes you to a BBB Web page stating: card counseling credit service

Based on BBB files, this company has a satisfactory record with the Bureau. Any complaints processed by the Bureau in its three-year reporting period have been resolved. The number and type of complaints are not unusual for a company in this industry. card credit online processing

To have a Satisfactory Record with the Bureau, a company must be in business for at least 12 months, properly and promptly address matters referred to it by the Bureau, and be free from an unusual volume or pattern of complaints and law enforcement action involving its marketplace conduct. In addition, the Bureau must have a clear understanding of the company s business and no concerns about its industry. consolidated counseling credit

Other credit repair companies that take approaches similar to Lexington at similar prices, and which feature a BBB seal, include CreditAttorney, ¹⁸⁶ Ovation Law, and Legacy Legal Services. ¹⁸⁷ A Google search, and the accompanying ads, turned up a host of credit repair clinics. check credit service

Not every consumer has been satisfied with Lexington Law s services. In 2000, the Tennessee Office of Attorney General investigated the firm for possible violations of the telemarketing sales law. ¹⁸⁶ www.creditattorney.com, Dana Facemyer, Provo, Utah ¹⁸⁷ www.legacylegalservices.com, Brian Rollins, Tempe, Arizona The result was a consent agreement in which Lexington, while not admitting any wrongdoing, agreed not to request payment... to remove derogatory information from, or improve, a person s credit history, credit record, or credit rating before the expiration of the time frame in which [Lexington] has represented all of the goods or services will be provided to that person. ¹⁸⁸ card credit online payment

A Different Approach

Stephen Gardner knows a lot about the credit reporting system, and about credit repair outfits. As the Texas Assistant Attorney General in the late 1980s and early 1990s, he led investigations that resulted in landmark settlement agreements with the Big Three consumer reporting agencies (CRAs). Under those agreements, the CRAs vowed to take steps to prevent mixed files, reinsertion of previously deleted data, and to conduct adequate investigations upon receiving consumer disputes (see Chapter 10). Those agreements served as the foundation for the 1996 FCRA amendments. civil credit ontario service

Gardner, now an attorney in Dallas, Texas, said the only organization he knows that ethically helps consumers is First Stone Credit Counseling (FSCC), ¹⁸⁹ and its affiliate company, the People s Credit Bureau (PCB).¹⁹⁰ Based in Dallas, the two companies are run by Bruce J. Danielson, a former pilot and military veteran. Danielson said First Stone is the only Consumer Advocate Credit Counseling organization in the country because it helps the consumers organize their matters and clean up their credit reports. antonio credit san security

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State of Tennessee v. Lexington Law Firm: U.S. Dist. Ct. - Middle Dist. Of Tennessee; Civil No. 3-96-0344; Agreed Final Order, 9/29/00. ¹⁸⁹ http://www.firststone.com/ ¹⁹⁰ http://www.peoplescreditbureau.com/; The Peoples Credit Bureau sells annual memberships ($150 for singles, $200 for couples), offering fast-track credit restoration, a newsletter, and other consumer education material. card cardmember chase credit

On behalf of an estimated 300 clients each year, Danielson engages in what he called accountability combat, in which the average client s credit report is cleaned up in four-to-seven months, and no one takes longer than two years. Danielson pointed out that the FCRA not only requires that credit reports be accurate, but that they are relevant, confidential, and properly utilized as well. clean credit repair service

Danielson said he leverages the consumer s willingness to repay a loan so that the creditor reports information to the credit bureau in a manner most beneficial to the consumer. As an example, he cited the negative hit a credit report takes when a consumer pays an old charge-off or collection because it can re-freshen the date-of-last-activity (DLA), making the negative account more recent, and consequently, cause greater damage to the credit score. credit management service

FSCC believes people need to pay their bills and timely. Therefore, we fairly settle many situations. However, we also get the proper paperwork in hand before payment is delivered which protects our consumer clients from further abuse and victimization, the company stated in a fact sheet. colorado credit public service

Danielson, who hosts a weekly radio show called The Consumer Fight Back Show, said that many of the people in the credit counseling industry are collection agencies in disguise. He said the most famous organizations, the non-profit National Foundation For Consumer Credit (NFCC) and Consumer Credit Counseling Services (CCCS), are actually a set of non-profit franchises that earn billions of dollars each year, primarily serving creditors interests. consolidation counseling

The CCCS Web sites state that their average client takes five years to complete their program, and worse yet, there is no credit file clean-up. The bottom line is that you may end up having seven to fifteen more years of credit hell, he said. Danielson also warned of private companies that offer credit counseling, referring to them as NFCC clones. bureau card credit service

NFCC has a different view. On its Web site, it described how its member organizations help millions of debt-laden consumers at a low or reasonable price. It claimed to help some consumers by giving them a Debt Management Plan (DMP). card credit customer service

Fair Isaac and Company (FICO), has publicly stated that since 1999 FICO has completely ignored any credit report mention of a Debt Management Plan arrangement with any counseling agencies. This is great news for consumers and credit counselors both. Therefore, credit counseling and DMP services do not negatively affect credit scores. As to consumers ability to obtain credit, it is the discretion of individual creditors as to how they interpret a consumer s credit report history and their decision to extend credit, NFCC stated on its Web site.¹⁹¹ credit financial service

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