More News on Spreading Credit Repair and Assistance Scams
Credit repair scams and mortgage assistance scams is growing problem for individual and the federal regulatory authorities. The best way for individuals to tackle credit repair scams is to report misconduct including any promises or demands that are not legal credit repair practices to the appropriate authorities.
The FTC enforces credit report and credit repair regulations but it does not investigate individual claims against a company, however they will investigate a company for legal violations. The Federal Trade Commission ( FTC ) files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the FTC that a proceeding is in the public interest.
If any company charges for free credit evaluations or consultations, or charges for credit repair services that were never received, they should be reported so appropriate action can be taken to put an end to fraudulent and deceptive credit businesses.
In a recent press release by the FTC action was taken to stop the practices of a credit counseling business. Crossland Credit Consulting Corp. and its co-defendants allegedly operated deceptive mortgage refinancing, credit repair, and loan modification schemes.
According to the FTC complaint, the company and defendants falsely promised to use proceeds from mortgage refinances to promptly pay off consumers’ original loans, but often pocketed the money instead. They misrepresented that they would repair consumers’ credit records by removing truthful negative items from their credit reports so they could obtain mortgage loans, and charged advance fees for those services in violation of both the Credit Repair Organizations Act and the Telemarketing Sales Rule. They also falsely claimed that they would modify consumers’ mortgages to obtain substantially lower interest rates and monthly payments. The court immediately barred the practices and froze the defendants’ assets pending a hearing.
Consumers should be careful when any company wants money up front for their services. Credit repair scams have become recognized for their abusive practices in taking money up front from consumers with promises of credit report and credit score assistance and disappearing with the funds without improving the consumers credit history or credit score. This problem now applies to mortgage assistance and foreclosure assistance services.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. In each case of wrongdoing, the FTC is asking the court to stop the defendants’ deceptive claims and make them forfeit their ill-gotten gains.