Texas Credit Repair Company Charged with Violating Credit Repair Organizations Act

It is important to be aware of what is in your credit report and make sure the information is accurate.  This is your right under the Fair Credit Reporting Act (FCRA).   It is another thing to try to remove negative information that you know is correct – that is illegal.

The Federal Trade Commission (FTC) charged the operators of a credit repair company in Texas, RMCN Credit Services, of violating the Credit Repair Organizations Act.  The FTC complaint, which can be seen here, alleges the company made false statements to the credit reporting agencies and charged retainer fees of $2,000 to the consumers for services. RMCN advertised a six-month program to improve consumer’s credit reports and, according to the FTC, did not show the consumers the letters sent to the credit reporting agencies disputing all the negative information on the consumers’ credit reports.   Even after the investigation was completed by the credit reporting agencies and information was verified with detailed payment data, RMCN continued to send the dispute letters.

According to the Federal Trade Commission, “the complaint alleges that RMCN misrepresented to consumers that federal law allows the company to dispute accurate credit report information, and that credit bureaus must remove information from credit reports unless they can prove it is accurate. In the company’s words, credit bureaus must “prove it or remove it.”

Dispute process

Under the Fair Credit Reporting Act (FCRA), the consumer reporting agencies and the information providers (the person, company, or organization that provides information about you to the consumer reporting agencies) must correct inaccurate or incomplete information in your report. There is a dispute process to handle this and the credit reporting agencies have 30 days to respond.  You can submit your dispute in writing or online.  The credit reporting agencies contact the information provider and the results of the investigation are provided back to you.  If the investigation is still not resolved you can put a statement on your credit report.

The best way to increase your credit score is to pay your bills on time, keep your balances low and don’t apply for new credit unless you really need it.  If you have negative information, it takes longer to recover and improve your score.  There is no quick fix.  Be aware of credit repair companies that ask for money up front and make sure you check out their business credentials.

Credit Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

 

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