Credit reair companies

So-called "credit repair" companies place ads in magazines, newspapers and on the Internet claiming that they can remove negative information from credit reports. The ads usually carry a version of this message: "Turned down because of bad credit? We can help!" These companies call themselves "Credit Advisors," "Credit Rating Correction Services" or "Credit Consultants." Many of these companies charge hundreds if not thousands of dollars to "clean up" bad credit reports. But the truth is, these companies can only do what you could do yourself—at no charge.

Nobody can remove negative information that is accurate from your credit report. No company has a "secret" ability to remove negative information.

But this doesn't stop these companies' claims. This deceptive quote is from a credit repair company brochure: "Charged-off accounts, collection accounts, judgments, tax liens, repossessions, and even bankruptcies can be removed from your credit records in less than one year (five to seven month average)."

One tactic is to bombard credit reporting agencies with requests to verify information. If a credit reporting agency cannot verify an entry within 60 days, it will remove the information from the report. But if the information is later verified to be accurate, it will go back in the report.

Before you even consider signing a contract with a company that promises to repair your credit, remember these facts:

* You may obtain a copy of your credit report on your own.
* You have the right to dispute entries in your credit report.

In any case, credit repair companies are prohibited under federal law from collecting any payment from you until after you get an amended copy of your credit report.

Never pay money to get your credit repaired. You can do it yourself for very little cost.

Old Debt or Bogus Debt?

Old Debt or Bogus Debt?

By Greg Abbott
Attorney General of Texas

My office receives numerous complaints and inquiries regarding debt collection. Many consumers have been targeted by debt scams, while others are confused about old debts and whether or not they still have to pay them off.

One of the more prevalent frauds currently in circulation is the bogus debt scam. A number of consumers have turned to our office in confusion because they have received a demand from a collection agency trying to collect a debt that does not seem to exist or that they do not remember incurring.

It appears that some con artists often operate with little more than a post office box, and may hope that an intimidating letter will frighten a consumer into paying a small but totally bogus debt.

Whenever a consumer complains about an unexplained debt or charge, we immediately suggest the possibility that the consumer's identity has been stolen. We also recommend that you demand proof that an unfamiliar debt actually exists.

The best way to ensure a debt's validity is to check your credit file with the three major credit bureaus and demand documented proof from the creditor or collection agency. Legitimate lenders can readily produce a paper trail to show that a credit transaction actually took place. In a bogus debt scam, however, no proof can be produced that a debt even exists. You may also wish to contact the Secretary of State's Office to see if the collection agency is registered in Texas.

We also receive inquiries regarding the obligation to pay old debts. If you never paid off an old debt, that does not mean it is not valid; you are obligated to pay it even if it has been several years since you were contacted by a collection agency or the business you owe the debt to.

Many consumers are under the impression that after a certain number of years, they are no longer responsible for an unpaid debt.

Under Chapter16.004 of the Texas Civil Practice & Remedies Code, Four-Year Limitations Period, the statute of limitations for filing suit to collect a debt is no later than four years after the cause of action accrues. An example of when the cause of action accrues is the date on which the debt is declared to be in default.

Under the case law related to this statute, debt means any outstanding liability payable in cash. In addition to consumer loans or credit card debt, this can mean a tax liability, damages related to land sale fraud, overpayment or underpayment of royalties or wages, money allegedly owed under an insurance policy, and money arising from a breach of contract.

The fact that a creditor is barred from collecting a debt through a lawsuit due to the statute of limitations does not mean the debt is erased - the debt remains in effect, and the creditor can still use other means to try to collect it. And the debt will remain on your credit report

Also, most of the cases cited involve unsecured debt, where the suit would result in a personal judgment against the debtor. There are different rules for debts secured by property, such as mortgages. You may wish to consult with a private attorney if you are unsure which type of debt is involved or what options are available in resolving it.

If you are being harassed by an abusive debt collection agency, you can contact my office and file a complaint. You can also contact the Federal Trade Commission to file a complaint and for additional information.

---

POINTS TO REMEMBER
Old or Bogus Debt

• Ask for documented proof of debt
• Valid debts do not go away after several years
• Check your credit file often

To obtain a copy of your credit report:

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111

Experian
P.O. Box 949
Allen, TX 75002
(888) 397-3742

Trans Union
P.O. Box 390
Springfield, PA 19064
(800) 916-8800

You can contact the FTC at:
Consumer Response Center
Federal Trade Commission
600 Pennsylvania Ave, NW
Washington, DC 20580
877-FTC-HELP (382-4357)
www.ftc.gov

Visit the Consumer Protection Section of our Web site at www.oag.state.tx.us for information on debt collection, ID theft and other scams. Information on this and other topics is available on the Attorney General's Web site at www.oag.state.tx.us.

AGENCY COLLECTORS (Beggars)

Liars, Lawyers, Con-Men & Thieves

---

AGENCY COLLECTORS (Beggars)

Correctly deemed the worst-type of collection agents! They operate from a computer database that contains all of the information regarding you, provided to them by the original creditor. When an outside agency gets your account, it has been 'charged-off' for non-payment. They make more then 200-250 calls a day and the name of their game is also... $$ MONEY $$!

An agency collector receives a commission averaging from 15-25% of what they can collect. Most are paid bonuses if they hit a quota and a good, hard-working collector can make $40-60K per year. However, most collectors are fortunate to make half of that amount. The problem is that the majority of them (70-80%) routinely step over the line to increase the monetary rewards of their actions. The debt collection business is plagued with a huge turnover in employees and by that nature, is a largely transient industry. Unfortunately, far too few consumers complain enough about debt collectors stepping over their bounds, usually because they are intimidated and embarrassed about their dilemma. It has been my experience that the average debt collector is male, has a large ego, bounces around from job to job, have a lot of debt themselves, suffer from low self-esteem and enjoy using the telephone as an instrument of empowerment. Collectors see themselves in a position to take advantage of those they deem weaker, in an effort to overcome their own insecurities. They normally will talk-over any issues you may have, threaten and intimidate you, lie, misrepresent themselves, abuse, annoy and attempt to push you as far as they can if the rewards to them of self-gratification and money are realized. The spectrum of collectors I've encountered over the years, in dealing with literally thousands of them have ranged from the low percentage of honest and hard working (20-30%), to the average of deadbeat scum that is either just out of, or heading back into a jail cell (70-80%). Collecting is male dominated and because of the shortage of skilled workers, agencies are hiring anyone who can walk and chew gum to make their calls. Social skills, education and career orientation are NOT normally the prerequisites for a debt collector – money beggar position.

From standard phrases such as: "what is your intent" to "I'm going to recommend that our client take immediate legal action against you." The innocent unsuspecting consumer feels threatened and even terrorized by the antics of terrorist debt collectors. The really bad ones will call you at work, violate third party disclosure, or worse, in order to intimidate or threaten you with arrest or wage garnishment if they don't have the money today! They persuade you to pay off old debts using your new credit card, via Western Union wire transfers, bank drafting, debit checks and cash. They will tell you your credit report will be clean and your soul will be saved fro hell, (halleluiah!) if you just send them the.... $$ MONEY $$. The National Consumer Law League, (NCLC) and the National Association of Consumer Advocates, (NACA) assist attorneys across the country in pursuing agencies and collectors who violate the law and your rights. Collectors are learning that the phone name they use and the perceived anonymity of hiding behind a telephone can easily be overcome with the modern technology of today and investigative techniques. Some collectors are learning first-hand that they too, can be charged with making threats over the phone and that their employers do not provide bail money, or legal representation as a perk. Creditors are increasingly becoming less tolerant of agencies that allow abuse and will drop those that don't comply. I urge you to complain about collector abuse by contacting the FTC, the American Collectors Association, the original creditor and your state bar association (against attorneys), or myself if you feel your rights are being violated. There is a nationwide group of professional consumer attorneys, skilled in debt collection laws that passionately defend the rights of consumers against these illegal collectors. No consumer should ever suffer abuse from a debt collector, the laws WILL protect you!