Every time I turn on the radio or watch TV, I am confronted by an ad for some credit relief service. Now being human and having a mystery shopper wife (see # 8 scam of the decade) I have a larger debt load than I really want. Who doesn't right? So I called one of these companies After all it was advertised on the radio so it must be valid. The conversation was something like this:
Credit relief scammer (CRS): Thank you for calling credit relief. How can we help you lower you bills?
ScamsXposed. (SX) : I would like to find out how your program can lower my credit card debt by more than %50.
CRS: Certainly sir, I can help you with that but first I will need some information from you.
SX: What do you need to know?
CRS: Please provide me a list of your credit card accounts and their current balance.
SX: I am not going to give you that yet. Before I commit to using your service I want to know how it works.
CRS: We work with your credit card companies to lower your account balance.
SX: How is that done?
CRS: Which credit card companies do you have accounts with?
SX: I am still not convinced I want to sign up. Please tell me how you can get my credit card company to lower my balance in half.
CRS: Are you currently paying the minimum payment on the cards?
SX: I am paying more than minimum. Why do you ask?
CRS: For the program to work you should stop paying your payments.
SX: What? Wont that hurt my credit card rating?
CRS: Instead of making payment to your credit card company you will pay us. Then we will pay your credit card company after we negotiate a settlement.
SX: How long does it take to negotiate a settlement?
CRS: That depends on which companies you have cards with. Which companies did you say?
SX: I didn't say. So while you are negotiating I do not make any payments?
CRS: No you pay us.
SX: But won't the credit card companies report that I am late making payments to the credit reporting bureaus?
CRS: Some do some don't. It doesn't really matter because your credit score is already low. Which cards do you cary again?
SX: I didn't tell you. How do you know my credit score? I told you I make all my payments on time. So how does your company make money then? Do I pay a fee for your services?
CRS: Yes you will pay a fee and the credit card companies pay us too.
SX: What? How much would I have to pay?
CRS: Once you provide the account numbers and balances I can estimate the fee for you.
SX: I am not interested.
CRS: I will call you next month to check on how you are doing.
SX: No thanks, goodbye.
So What did I learn? These credit repair companies work just like bill collectors. You stop paying the credit card companies and they offer to collect on the debt for the credit card. Since the credit card thinks you can not pay anything they are glad to settle for what they can get. The the credit repair company makes you a new loan at a higher interest and charges you a fee. Oh and the credit card company reports to the credit bureau that you failed to pay and that the account went to collections, trashing your score.
This is what a real credit relief company does. I didn't even mention the fake companies who do nothing for you except make sure you can't pay your bill, they max it right out for you.
Here is an example http://www.consumeraffairs.com/news04/2006/03/il_mortgage_rescue.html
If you are in need of help with your credit cards there are good resources available to you. Services such as http://www.consumercredit.com/ are non profit and do not tell you to stop making payments.
Remember, if it sounds to good to be true it probably is.
If you are in need of help with your credit cards there are good resources available to you. Services such as http://www.consumercredit.com/ are non profit and do not tell you to stop making payments.
Remember, if it sounds to good to be true it probably is.
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