More Scam Artists Trying To Take YOUR Money.

By
Real Estate Agent with 1st Action Real Estate
GET IN MY PANTS GAS BILLI don’t know about you, but I’m stretching my pennies these days. I’m squeezing every nickel until Ole’ George hollers. A lot of you are in the same boat. Times are tight right now – people losing their homes, a gallon of gas heading for $4 with a gallon of milk costing even more, auto sales slumping, advertisers cutting their budgets, everybody doing what it takes to get through this little gulley in the financial roadway of life.

But it seems every time I turn around there’s somebody else trying to get their hand into my pocket – like there’s anything of interest in there. We’ve talked about the mortgage fraud scams that have rocked the Valley, and the foreclosure scams and reverse mortgage scams and the identity theft scams – well here’s one that’s been around for awhile but is really starting to take off again due to the problems folks have had keeping up with their budget the past couple years – the credit repair scam.

You see the ads in newspapers, on TV, you hear them on the radio, you get postcards in your mail – everywhere you turn – offers to ‘repair your credit’. Every day thousands of people type ‘credit repair’ into Google, hoping for the promised cure:

  • We can erase your bad credit – 100% guaranteed
  • Remove bankruptcies, liens & bad loans from your credit forever
  • Create a new credit identity - LEGALLY

CANDY FROM STRANGERSFor a fee, these companies offer to clean up your credit report so you can get a car loan, a better mortgage rate or even a job. The problem is, they can’t deliver. After paying them hundreds or thousands of dollars to improve your credit, most simply disappear back under their rock with your hard earned cash.

Having said that, there are legitimate credit counseling services out there, some non-profit and some for-profit, and they work by the book to guide you through your credit nightmare – but it’s a time consuming and intensive process and does not – CAN NOT – happen overnight. So if you decide to respond to one of a credit repair offer, here’s a few things to look out for:

  • Companies that want you to pay for all, or part, of their service up-front. Credit repair services can’t ask for payment until they’ve kept their promises. Federal law also requires credit repair services to give you a explanation of your legal rights, a detailed written contract, and three days to cancel.
  • Companies that recommend you not contact a credit reporting company yourself. Why? You might find you can do many of the things for free that they are offering for a fee and you might also find out some of the things they promise are illegal.
  • <!--[if !supportLists]--><!--[endif]-->Companies that offer you a ‘new’ credit identity, build a clean report from scratch.
  • <!--[if !supportLists]--><!--[endif]-->Companies that advise you they will dispute all derogatory information on your credit report until it’s removed.

These last two constitute most of the scam element because they sound so do-able. Create a new credit identity and your old problems will disappear. The company will provide you a new number that looks like a Social Security Number (for a fee). Now understand that only in the rarest of circumstances will the Social Security Administration issue a new number so what most of these numbers are is called an Employer Identification Number, or EIN. Looks and acts like an SSN, works a lot different.

First off, it’s gonna mess up the IRS. They’re going to see two numbers on you but only one return and they’ll get curious. You don’t want that. Assuming you make it past them, wait until you try to collect your retirement and Social Security Benefits that were collected under the old number. But hey, you’ll be retired by then with plenty time to deal with those fraud charges. Finally, don’t you think a mortgage broker or auto dealer is going to think something’s up when you waltz through their door at 45 years of age with a brand new sparkling credit report and no history? Don’t fall for the new identity scam.

How about disputing all your derog’s? Absolutely – that is something you should do. You can even do it yourself for free. By law you are entitled to a free credit report once a year from the three reporting agencies. Simply go to https://www.annualcreditreport.com/ and sign up. Your reports can be mailed or downloaded on-line and if you see something wrong on the report, inaccurate information, debts you know nothing about, that sort of thing, you can dispute the item to the company. By law they have 30 days to investigate and if they can’t get corroboration for the item, it will be removed. Usually while an item is under investigation it will be removed from the report until it is verified.

HOWEVER, what the scammers will do is file dispute after dispute after dispute which will temporarily remove the item from your report. But if the item is valid, if you made a payment late, if you had a bankruptcy, if it’s legitimate, it will be back. All valid credit items stay on your record for 7 years even if you pay off and close the account. BK’s stay around for 10 years and nothing, nor nobody, can remove negative information if it’s accurate. Honest. And these repeated disputes eventually tick off Experian and Equifax to the point where they won’t even respond to legitimate inquires you might have. It’s not worth it.

Remember – if something sounds too good to be true… well you know the rest. Unfortunately there’s a sucker born every minute and two grifters to take advantage of him. A word to the wise is sufficient – a wink’s as good as a nod to a blind horse.

Gene Wunderlich - Selling Southwest California Homes including Temecula, Murrieta & The Southern California Wine Country
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Mortgage, Foreclosure & Elder Abuse Housing Fraud
Tags:
fraud
credit repair
mortgage fraud
reverse mortgage fraud
scam

Comments 7 New Comment

Show All Comments
Rainer
33,623
Brian Luce
Associate Broker
Weidel Realtors Doylestown
I agree.  The credit repair scam seems to gain momentum a few times per year here as well.  Now the big thing is "Buy Short Sales".  A few stories on the news regarding quite a few new scams regarding short sales, foreclosure "help" etc.
April 15, 2008 06:41 PM
Rainmaker
672,148
Rob Arnold
Metro Orlando Full Service - Investor Friendly & F
Sand Dollar Realty Group, Inc.
Interesting info.  It seems like most credit repair services don't get much done for their customers.  At least from what I have seen.  Of course the customer needs to by motivated too.
April 15, 2008 06:47 PM
Ambassador
2,342,163
Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

It never fails.  I've watched several economic downturns and every time it happens folks start using their credit cards.  Sooner or later, they get behind.  Sooner or later, they need to repair their credit. 

The scam credit repair artists make them an offer they think they can't refuse.

There is nothing these snakes can do for you that you can't do for yourself. 

Except of course for CCC. 

April 15, 2008 07:00 PM
Rainmaker
384,436
John Walters
Licensed in Louisiana
Frank Rubi Real Estate
Gene your blog is awesome.  Can you share some of your secrets?
April 15, 2008 10:16 PM
Rainmaker
225,023
Gene Wunderlich
Realtor & Legislative Liaison
1st Action Real Estate

Brian - anytime you see an article or do a post on one of these scams, please post it to our mortgage & foreclosure fraud group. We need to share this information so we can recognize it when it rears it's ugly head in our market.

Lenn - People are always looking for the easy way. Even if they can do something themselves better, they'll trust a stranger with candy. Sometimes we resemble nothing so much as sheep.

John- Thanks for the props. If you've read much of my stuff you know I have no secrets - I just let it all hang out. Some days I might do 3 or 4 posts ranging from a couple jokes to a rant or two on fraud or politics - then I'll go a week without an original thought. I also do a newspaper column so some of my longer posts are the result of that research.

If you're commenting on the appearance rather than the content, I just redid my blog page background (the grapes) earlier today using the ActiveRain Customizer and for my text I've been trying what Nestor & Katerina were talking about the other day - a little program called NVu. If I'm doing it, it's gotta be easy.

April 15, 2008 10:45 PM
Rainer
28,770
Hayden Gerson
HPM Financial LLC

Gene,

 

You wrote a very good blog and it makes a lot of sense. I own a credit repair company, and I have also been a Realtor for the last five years. That having been said, there are so many credit repair companies that do not deliver. That makes everyone in the credit repair business look bad. Just like there are bad mortgage brokers and bad car dealers, there are bad credit repair companies.

 

We came out with our money back guarantee because we put our money where our mouth is. We are fully compliant with all federal and state laws. I don't mean to use your blog as a means to promote my service, rather I wanted to let you know I share in your frustration. If you go to hpmfinancial.com and click on results, you will find actual documents we have from the credit agencies with results. We are pretty close by, if you do ever have a client in need of credit repair let me know. I will evaluate thier credit report for free and let you know if I can help you. If I can, I will not only give your clients a professional discount, but I can set you up with a tracker so you can keep track of your clients progress.

 

If you have any questions or would like more info, let me know. Just call me at (800) 701-5022 or go to www.hpmfinancial.com. 

 

 


  

April 16, 2008 01:51 AM
Rainmaker
619,961
Randy Prothero
Hawaii REALTOR, (808) 384-5645
Island Style Realty Inc.
The one where they challenge the negative hits has been around a long time.  They actually get some results if they can not reaffirm the negative within the 30 days.  The scam is you can do the same thing yourself and in many cases they just take the money and run.
April 16, 2008 02:05 AM
Show All Comments
Rainmaker
225,023

Gene Wunderlich

Realtor & Legislative Liaison
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