Credit Repair Scams

Credit repair scams are becoming popular with today’s economy and consumers need to be cautious when looking for help. Federal law regulates the activities of these credit repair organizations. A credit repair organization is any person or company that provides advice, assistance or offers to improve any consumer’s credit record, credit history or credit rating in return for money or other valuable consideration. This does not include non-profit organizations or the creditor of the consumer’s debt who is assisting in restructuring that debt.

If you need to use these services, don’t pay upfront. A credit repair organization can not charge or receive any money or other valuable consideration for the performance of any service, which the credit repair organization has agreed to perform for a consumer, before the service is fully performed. Also, beware of promises to “eliminate” all negative records. Only inaccurate or obsolete records can be removed.

Finally, no services may be provided by any credit repair organization for any consumer unless a written and dated contract has been signed by the consumer and before the end of a 3-business-day waiting period which begins on the date the contract is signed.

The contract must state the terms and conditions of payment, including the total amount of all payments to be made by the consumer to the credit repair organization or to any other person for the services. In addition, it must provide a full and detailed description of the services to be performed by the credit repair organization for the consumer, including all guarantees of performance and an estimate of the date by which the services will be completed or the length of the period necessary to perform the services.

The contract must also include the credit repair organization's name and principal business address and a conspicuous statement in bold face type, the consumer's signature line on the contract, which reads:

"You may cancel this contract without penalty or obligation at any time before midnight of the 3rd business day after the date on which you signed the contract. See the attached notice of cancellation form for an explanation of this right."

If you have been a victim of such a scam, contact the Attorney General’s office to make a report.

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This publication is for general information only and is not intended as formal legal advice. If you have any questions or need assistance, please contact Curtis & Curtis, P.C.

Curtis & Curtis, P.C. is a full service law firm located in Jackson, Michigan providing superior legal services and advice to individuals, families and businesses throughout mid-Michigan since 1901.