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Credit Card Applications » News » Other » FTC busts Two Fraudulent Credit Repair Companies

FTC busts Two Fraudulent Credit Repair Companies

November 02, 2009 | Updated on November 02, 2009
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The content is accurate at the time of publication and is subject to change.

Two companies offering illegitimate credit repair services to consumers were busted by the Federal Trade Commission. These establishments claimed that they were qualified by the Commission to deliver such services. However, the FTC identified that they had no such services.

The busted establishments were found out to repairing their client's credit report from all negative information including "late payments, charge-offs, collections, tax liens, repossessions, bankruptcies, and judgments, even when the information was accurate and not obsolete." These kinds of services are considered to be scams especially as the companies charged the consumers before they did any of these things. The claims clearly meant that the companies violated the Credit Repair Organizations Act.

Both cases used the newspaper and the internet to advertise the said services.

To clarify consumers about the services they offer, FTC continuously remind consumers about the scammers and fraudulent credit repair services. Apart from that, it is important to consider investigating the companies you plant to transact with in relation to your credit repair.

There are plenty of ways you can determine if the company is legitimate or not. Here are some seven signs that would tell if the company is working on a scam:

1. They do not give you a copy of the "Consumer Credit File Rights Under State and Federal Law" which informs you of your rights to obtain a credit report and dispute inaccurate credit report information.
2. They do not give you a copy of the contract to view before you are asked to sign it.
3. If they do give you a copy of the contract, it does not contain the following information:
(a). Amount you are being charged
(b). Details of the services performed on your behalf
(c). The date by which the services will be performed (or the span of time required to perform the services)
(d). The name and business address of the company
(e). A statement that lets you cancel the contract within three days
4. You are asked to pay before the service is implemented
5. They promise to accurately remove the negativities in your credit report.
6. They will create for you or ask you to create a new identity with a new social security number or federal employer identification number;
7. And they ask you to sign a form waiving your rights under the Credit Report Organizations Act.

FTC reminds consumers that stripping off damaging information on your credit report is not the proper way to repair bad credit. The legitimate way of doing this requires effort and patience on your part. In the hopes to lessen the confusion among consumers, FTC released the following information about the six frequently misunderstood claims:

1. They can permanently remove negative accounts on the credit report even when it's accurate and not obsolete;
2. thus, they can improve the a consumer's credit report or ability to obtain credit;
3. the full costs of the services and other restrictions;
4. material restrictions or limitations to purchase or receive goods or services;
5. any material aspect of their refund or cancellation policy; and
6. Any aspect of how the goods or services will perform.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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