America Debt Consolidation

Credit Card Consolidation Precautions

While there are many reputable and reliable companies that can help you repair your credit problem, unfortunately, some less scrupulous organizations prey on consumers who are anxious to clear up their debts. There are a number of warning signs to look out for should you choose to pursue professional credit repair services.

If a company asks you to pay fees for services before they’re performed, be weary. There is no guarantee that the organization has the reputation or clout to get your creditors to agree to better repayment terms.

Make sure that the credit card consolidation company informs you of your rights and options, including those actions you can take on your own in case you prefer to go that route.

It’s highly suspicious if a credit repair clinic urges you not to make direct contact with a credit bureau. It is evidence that they are not following through on the services they are claiming to provide, particularly in relation to your credit report.

Crooked credit card consolidation agencies cannot only leave you high and dry, but their shady approaches to reducing credit card debt or repairing your credit can put you in legal jeopardy. For instance, an illegitimate service may even try to convince you to develop a new credit identity or create a new credit report under an employer identification number in lieu of using your social security number. A crooked credit card consolidation company may even attempt to talk you into providing false or doctored up information. Following suggestions that involve illegal tactics can lead to fraud charges, prosecution, and ultimately, your imprisonment.

In addition to recognizing the warning signs of a crooked credit card consolidation service, you should know what you have the right to expect of a company, and what you can do if they don’t deliver.

First of all, under the Credit Repair Organizations Act, credit repair organizations are required by law to supply you with a printout of the “Consumer Credit File Rights Under State Law” prior to your signing a legal contract. In addition, they are legally obligated to give you a copy of your written contract, which must illustrate in detail your rights and responsibilities under said contract, including payment terms, a description of services, a timeline for results, guarantees, and company contact information. Make sure you read these documents carefully before agreeing to anything.

Based on the Consumer Credit File Rights Under State Law, a company is not legally entitled to demand fees prior to providing the agreed upon services, nor can they make fraudulent or inaccurate claims about there services. They also may not start providing services without your written consent, and they must give you three days to change your mind and cancel the contract without charge.

If you’ve already fallen prey to credit consolidation fraud, don’t be afraid to report the credit repair company. Many people are hesitant to contact government officials, fearing that this will only exacerbate the situation. In actuality, consumer laws are meant to protect you and provide you some recourse against credit repair scams. So, if you’ve been scammed, get in touch with your local consumer affairs office or your state’s attorney general via her or his toll-free hotline.