Even though it is against the law for so-called debt relief companies to charge consumers up front before providing any type of service, this is still happening in many areas of the country, including Wisconsin.
In fact, the Federal Trade Commission reported that it reached a settlement with one shady credit repair company that was charging consumers with bad credit $2,000 before any services were rendered, which is in violation of the Credit Repair Organizations Act.
A 20-year consumer advocate and “Good Morning America” correspondent said that falling for scams like this is one of the biggest mistakes people with debt problems make. The problem is that many of these credit repair companies charge large upfront fees and then do nothing to help the consumers.
Similarly, the consumer advocate said that other credit repair companies charge fees for services that the consumer could do by him or herself for free. For example, many credit repair companies promise to get rid of “dings” on a credit report in order to improve a credit score.
In reality, it’s impossible to remove negative but accurate items from a credit report. Instead, what they are actually doing is taking off inaccurate items from the credit report, which can be done by consumers for themselves at any time. That’s another big mistake for people with financial trouble.
Unfortunately, even with the FTC and other consumer watchdogs in place, there are many shady debt relief and credit repair companies preying on Americans who are struggling with debt and bad credit.
When it comes to getting debt relief, it’s important to turn to professionals you can trust. Our firm has been helping Wisconsin residents get out of debt for decades. We take pride in offering a professional and trustworthy debt relief service to clients we genuinely care about.
Source: ABC News, “3 Mistakes Debtors Make That Dig Them In Deeper,” Elizabeth Leamy, June 26, 2014