SeaComm Federal Credit Union OFFICIAL BLOG

How to Spot a Credit Repair Scam

Repairing your credit can be an uphill battle. There are legitimate credit repair companies, but without educating yourself, you might reach a scammer instead. Here are the most common warning signs of a credit repair scam:

1. Demands upfront payment

Know your rights. Under the federal Credit Repair Organizations Act, credit repair companies are forbidden to request or receive payment until they have completed the services promised. If a company is demanding upfront payment, it is surely a scam.

2. Makes big promises

To lure you into their trap, many scammers make wild promises about your credit score. They may assure you that they can remove negative information from your credit report, even if that information is accurate and current. Don’t believe them; no one can do this.

They might also promise to boost your score in just a few weeks or less. This, too, is false. You will never see an improvement on your score until at least 30 days has passed since you have taken action.

3. Tells you not to contact the credit reporting agencies

Every U.S. citizen has the right to a complimentary report from the three major credit reporting agencies every year. If a company advises you not to contact these agencies directly, they will probably charge you for obtaining the report on their own. In other words, you will be paying for a free service.

4. Is evasive about your legal rights and their services

The Credit Repair Organization Act made it illegal for credit repair companies to lie about your legal rights and about their services. This law is enforced by the Federal Trade Commission (FTC). To comply with this law, credit repair companies are required to explain:

  • Your legal rights and clear details in a written contract of the services they will perform
  • Your three-day right to cancel the contract without charge
  • The anticipated amount of time it will take until results are evident
  • The total cost you will need to pay for their services

If you have already hired a credit repair company and they haven’t lived up to their promise, you still have options. To protect others from falling prey to the same scam, it’s best to report it to your local consumer affairs office or to your state Attorney General.

It’s also advisable to file a complaint with the Federal Trade Commission. The FTC cannot resolve individual credit disputes, but it can take action against a company for multiple law violations. You can file your complaint online at ftc.gov/complaint or call 1-877-FTC-HELP.

Make sure to utilize your Benefits Plus® checking account with SeaComm for additional protection! Your Benefits Plus® membership entitles you to identity theft protection services, free annual credit reports, IDT Restoration Rescue® and more. You may even upgrade to Benefits Plus® Premium, which provides you with all the advantages of a Benefits Plus® checking account, plus additional protection from Ultimate ID®, which includes:

  • 3 bureau credit monitoring
  • Internet monitoring
  • Instant inquiry alerts
  • Remediation and lost documentation replacement services.

Visit your local SeaComm branch to upgrade your checking account, today!

For complete information, terms, conditions and exclusions please visit www.benefits-plus.org or call 866-329-7587.

Here at SeaComm, our goal is to help you live a financially prosperous life. Through our partnership with GreenPath Financial Wellness, SeaComm members have access to free one-on-one financial counseling, student loan counseling, debt management services and more. To learn more about how SeaComm’s partnership with GreenPath can help you, click here or call (800) 550-1961.

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