Credit Repair Scams: A Warning For Consumers

(PressMediaWire) - It’s no secret that Americans have a debt problem. Among U.S. households with credit cards, the average outstanding credit card balance was $10,679 at the end of 2008, according to the Nilson Report. And with unemployment in double digits in some states, more and more Americans have credit reports that include delinquencies, bankruptcy or foreclosure.

“Even if you’ve had good credit your whole life—and a job loss or illness puts you behind in your debt repayment—you’re a potential target for ‘credit repair’ scams,” says Ben Hanania. Hanania is Chairman of the Ethical Credit Repair Alliance, a consumer watchdog group that monitors the credit repair industry.

“Good credit has never been more important,” says Hanania. “A bad credit score can cost you a job, or prevent you from getting insurance coverage. And people will poor credit pay higher interest rates on loans and credit cards—if they can get them at all. So if you get an email that promises to ‘erase your bankruptcy’ or ‘eliminate a foreclosure’ from your credit report, it can be very tempting,” says Hanania. "But the truth is, it’s impossible to remove negative information from a credit report if the 'black marks' are accurate and timely."

So how can vulnerable consumers protect themselves from credit repair scams? The Federal Trade Commission says consumers should watch out for these credit repair red flags:

• The company wants you to pay for credit repair services before they provide any services. 
• The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
  
• The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.

“We list these red flags and more in our free newsletter, the ECRA Consumer Watchdog,” notes Hanania. Consumers can download their copy by request on ECRA’s Web site, www.ECRAOnline.org.”

“There are a lot of outstanding professionals in the credit repair industry,” says Hanania. “Since up to 80% of credit reports contain errors or inaccuracies, there’s definitely a need for credit repair services. But it’s so frustrating when a handful of bad actors can victimize so many people and give honest credit repair companies a bad name.”

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About the Ethical Credit Repair Alliance
Frustrated by the many unscrupulous operators in the credit repair industry, Ben Hanania founded the Ethical Credit Repair Alliance to encourage professionalism and self-policing among credit repair companies. All ECRA members must agree to and abide by the "Ethical Credit Repair Alliance Code of Professional Ethics" in addition to Federal Law. Those found to be in violation are subject to expulsion from membership. 

CONTACT:
Benjamin Hanania, Chairman
Ethical Credit Repair Alliance
(513) 771-1726
ben(at)ECRAonline.org

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