How Do I Know If a Credit Repair Law Firm Is Legit?
Now that the Consumer Financial Protection Bureau (“CFPB”) is going after credit repair companies who do not comply with the Telemarketing Sales Rules (“TSRs”), we fully expect to see more Credit Repair Lawyers to come to the rescue of consumers with troubled credit. No, we don’t mean Lexington Law as the CFPB has already filed a lawsuit against that company in 2019 for not following the TSRs. We mean lawyers that hold themselves out as credit repair lawyers. Those lawyers should not charge you any money out of pocket to fix your credit. If they are charging you fees, you should get your money back.
It Is Illegal, In Most Cases, To Charge a Consumer Money To Repair Their Credit Reports Until 6 Months After The Work Is Completed
The CFPB and the Federal Trade Commission (“FTC”) don’t trust credit repair companies. These governmental agencies have seen a pile of abuse in the credit repair industry, much of it perpetrated by people who claim to be experts in fixing credit. Many of these folks are just plain scam artists. In response, the FTC came up with something called the Telemarketing Sales Rules. These rules regulate anyone that sells goods or services over the telephone. In addition to prohibiting telemarketers from lying, cheating or otherwise stealing from consumers, it requires them to make certain disclosures and to avoid making others. But…when it comes to credit repair companies or people who offer to help you fix your credit, the FTC has very special rules under the TSRs just for them. The TSRs prohibit anyone that sells credit repair via telephone (just about everyone uses the telephone), from charging fees to a consumer until all of the promised work has been provided and proving that it has been provided by producing a credit report that is dated at least 6 months after the work has been completed. In short, the TSRs are designed to drive credit repair companies out of business. Are attorneys subject to the TSRs? They most certainly are.
Here is a list of ways to tell if you are dealing with a real Arizona credit repair lawyer or a wannabe credit repair lawyer.
1. A Real Credit Repair Lawyer Does Not Charge You Out Of Pocket Fees For Fixing Your Credit Report On a Monthly Basis
Lexington Law is supposed to be a credit repair law firm, but it charges fees on a monthly basis which is a violation of the TSRs. (As lawyers, you would think that they would know that). Still, charging monthly fees for credit repair is illegal unless you are a 501(c)(3) organization. I don’t see anyone giving charity to Lexington Law.
2. A Real Credit Repair Lawyer Does Not Charge You Out Of Pocket Fees For Fixing Your Credit Report When Items Are Deleted
Another way credit repair companies charge is by the items that they get deleted. Be careful because this can be particularly scammy. For example, suppose you agree to pay $500 for each item that is removed from your credit report, if a creditor that reports to all 3 credit bureaus removes its tradeline from your credit reports, you just got charged $1,500. What’s worse is if that item reappears on your credit report several months later, as many items do, you are now out $1,500 and your credit report is no better for it.
3. A Real Credit Repair Lawyer Will Not Make Up Bogus Claims Just To Get Your Business
There is a law called the Credit Repair Organization Act (“CROA). It’s a federal law that governs credit repair people and companies. CROA makes it illegal for anyone, including you as the consumer, to lie to a credit bureau. Some favorite disputes used by credit repair companies are telling a credit bureau that a collection item or negative tradeline does not belong to you, when in fact, it does. This is complete violation of CROA and can get you, the consumer, into deep trouble with the FTC and or the CFPB. Let me tell you that they guys have no sense of humor and do not play around. The CFPB hands out fines like candy on Halloween and just as plentiful too. The CFPB is notorious for assessing fines in the millions of dollars. I would be very careful about lying to the credit bureaus because their patience for these kinds of shenanigans has run out a long time ago.
4. A Real Credit Repair Lawyer Makes Her Money When She Sues Debt Collectors, Credit Reporting Agencies Or Lenders When They Report Inaccurate Information About You
Its not hard to find a credit repair lawyer that will send out good dispute letters on your behalf without charging you a dime. They make their money when the credit bureaus confirm negative items that are not reporting accurately or improperly. Under the law called the Fair Credit Reporting Act (“FCRA”), the defendants must pay your costs and attorneys fees in any successful action. By and large, most of these lawsuits settle and they pay a good portion of your attorneys’ fees and costs. A real Credit Repair Lawyer should only look to the settlements that she obtains on your behalf to get paid. Nothing should come from your pocket.
5. A Real Credit Repair Lawyer Will Send Dispute Letters To The Credit Bureau At No Charge To You
Dispute letters to the credit bureaus are how you start the ball rolling with your rights under the law. Credit repair companies charge you for these letters. A real Credit Repair lawyer does not and should not. After all, it is also with these letters that any litigation can occur on your behalf against a credit bureau.
Check Out Our 3 For Free Program At Credit Repair Lawyers Of America
Credit Repair Lawyers of America has a 3 for Free program. We will draft up to 3 dispute letters for you in exchange for your credit report. There is absolutely no charge to the consumer for this as we make our money by suing the credit bureaus and the lenders who screw up your credit report. Our litigation program has no out of pocket charge to you. Call us today at (248) 353-2882 or visit us at Credit Repair Lawyers of America. You can also email us for more information at Carl@crlam.com. Carl Schwartz is an attorney with Credit Repair Lawyers of America. He is licensed in Michigan and New York.