Watch Out for Credit Repair Scams

Having a bad credit score can negatively impact your life in a big way. It can prevent you from getting loans for things you need – everything from buying a car to getting repairs done on your home can become difficult, if not impossible when you have a low credit score. When you are able to obtain a loan, a low credit score can mean you have to pay a much higher interest rate than you would get if you had a higher credit score. People struggling to pay back debt often have low credit scores, but having a low credit score imposes another financial burden on them, making it even more difficult for them to dig themselves out of debt. When you take all that into consideration, it’s no wonder people are desperate to have their credit scores improved by any means necessary. Unfortunately, this makes them vulnerable to predators claiming to be credit repair companies.

While there are legitimate companies that can help you improve your credit score by removing debt and “hard” credit checks from your credit score, there are also companies out there that claim they can do these things, charge a hefty fee, and then never deliver.

The Federal Trade Commission (FTC) and the office of the Illinois attorney general have each filed lawsuits against companies offering credit repair services while allegedly engaging in deceptive business practices and defrauding consumers.

One lawsuit filed by the Illinois attorney general alleged one company has been advertising credit repair services since at least 2014 but never bothered to register as a credit services organization. The company allegedly demanded to be paid upfront for their services, lied about the cost of the services they were allegedly providing, and then failed to deliver on their promise to consumers. Consumers allegedly paid between $1,000 and $2,200, either upfront or in installments, before the company would do any work. But even after consumers paid, the company allegedly pulled their credit reports but did not bother to perform any of the credit repair services for which they had been paid.

Another lawsuit filed by the Illinois attorney general against a different company alleged the company advertised itself as a credit repair company, but not only did it allegedly fail to deliver on the promises made in its advertisements but it also allegedly operated as a debt collection agency. According to the lawsuit, the company would harass consumers by calling them multiple times a week, claiming they owed money and threatening to garnish their wages or freeze their bank accounts or credit cards.

Both lawsuits are pursuing full restitution to be paid to all customers who have been affected by these allegedly deceptive and fraudulent practices, as well as a court order voiding all contracts between the company and its customers, a permanent injunction preventing the company from ever again engaging in these or similar illegal practices, plus payment of penalties equal to $50,000 per violation, as allowed by Illinois state law.

For its part, the FTC recently resolved a complaint against seven different entities and two individuals claiming to provide services related to credit repair. They allegedly violated the FTC Act and the Telemarketing Sales Rule (TSR), lied about their ability to repair their customers’ credit scores, illegally charged customers upfront for their services, instructed them to lie to or mislead credit bureaus and lenders, and threatened to sue them when they tried to dispute the charges or complained about them.

Illinois Attorney General and FTC Consumer Fraud Defense Lawyers

If you’re looking for highly experienced consumer fraud defense attorneys, talk to us at Lubin Austermuehle. In both attorney general and FTC offenses, clients have relied on our innovative and powerful defense strategies involving hundreds of millions of dollars in claims. We’ve handled well over 50 class action cases, including representation of national banks and one of the largest marketing companies in the U.S. With our dedication to relationships and results, we can offer a strong case for calling one of our three offices in Chicago, Elmhurst or Wilmette. Let’s discuss your needs during a FREE consultation. Call us at 630-333-0333 or via our website by clicking here. We look forward to speaking with you.

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