Today, scams and fraud are increasing, especially when you deal online. Even the credit repair industry has been struck by scams and fly by night credit repair clinics. This is sad thing because there are a lot of people desperately seeking help to repair their credit but only get caught in these scams.
Consumers of payday installment loans who genuinely want to improve their debt situation seek help. Due to the presence of credit repair scams, it is hard to find a credit repair company that can be trusted. Instead of helping repair their credit status, they fear that they will only fall into deeper financial problems.
Good news for all consumers! The federal government has increased consumer awareness against credit repair scams. Payday installment loan consumers have been given protection through a regulation known as the Credit Repair Organizations Act or CROA.
CROA gives professional credit repair services guidelines for appropriate actions. The act ensures that consumers of credit repair organizations are given the information necessary to make an informed decision and to protect them from unfair or deceptive advertising and business practices by scams and fraudulent organizations.
Here are some of the key points imposed so consumers can easily identify credit repair scams and avoid them:
1. Credit repair organizations do not charge fees before services are rendered.
There are no upfront fees for a credit repair service when you work with a reputable lender. On the contrary, credit repair scams require you to pay a large upfront fee that does little or nothing to help you repair your credit.
CROA mandates all credit repair companies to charge the consumer only after the credit repair service is rendered. The company cannot collect a fee until the task of setting your case has been completed. Remember this in order not to be a victim of a credit repair scam.
2. Credit repair organizations never provide inaccurate or misleading statements.
Many credit repair scams assure consumers that they can improve their credit score by 100 points in 60 days or remove bankruptcies from their credit reports. Although it may be possible, no credit repair company can promise that they will be able to accomplish this. They cannot do this because only the credit bureaus can. Also not all negative points in your credit report can be removed.
Credit repair companies that claim they can increase your credit score or remove negative items from your credit report are violating federal law. According to CROA, these companies can only do what lawyers can do in a court of law; that is, to do whatever they can to help but with no assurance of winning.
3) Credit repair companies must inform consumers their rights.
When you use a credit repair organization, CROA mandates all credit repair companies explain to consumers the disclosure statement entitled “Consumer Credit File Rights under State and Federal Law”. The statement provides information about consumer rights concerning credit reports. Consumers are also given the right to cancel credit repair services within 3 days of signing for no reason and with no penalty.
To be able to avoid scams, the government, by creating CROA, has provided protection for consumers against credit repair scams and fly by night shady credit repair organizations. Today, consumers can be confident that they can get genuine help for their credit repair issues.