Protect Yourself From Credit Repair Scams

With an improved economy and real estate prices on the rise, your good name and reputation are more important than ever when applying for new credit cards, an automobile, rental property or home mortgage. Many creditors have tightened their lending guidelines, effectively barring millions of Americans from borrowing money.

Long gone are the days of obtaining credit, goods, benefits, services and/or employment with a 620 FICO score. In most instances, a borrower will be denied if they maintain a credit score lower than 740. Even those with high credit scores have experienced reduced credit lines or closed credit card accounts and equity lines. When an account has not been closed, credit limits have been reduced to the existing balance due.

Mortgage lenders, auto finance companies, credit card issuers, credit unions and traditional banks have all raised the bar. Borrowers with low FICO scores can expect to be denied credit or to pay significantly higher interest rates than those with excellent repayment histories.

With about 52 percent of credit profiles at the Equifax, Experian or TransUnion consumer reporting agencies containing some sort of error or omission materially impacting credit worthiness, some turn to credit repair to remedy low credit scores and issues that prevent them from borrowing money. Absent self-help and the “do-it-yourself” approach, they hire a credit service organization in the restoration of their good name and reputation.

The terms credit repair, credit restoration or credit rehabilitation are somewhat synonymous. Those with bad repayment histories cannot afford to ignore the potential benefits of credit repair. In today’s economy, a strong FICO score is more important than ever.

Beware, though, when hiring a credit repair company.

Most — but not all — credit service organizations specialize in the restoration of consumer credit worthiness as well as issues related to identity. Assuming that the credit repair company is performing within established guidelines, they utilize laws enacted by Congress to dispute negative, erroneous, obsolete and/or fraudulent information contained within your consumer credit profile.

Utilizing the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Fair Credit Billing Act and the Fair and Accurate Credit Transactions Act, a reputable credit service organization will assist in the submission of disputes electronically, verbally and in writing to the Equifax, Experian and TransUnion consumer reporting agencies. Disputes are also submitted to creditors, collection agencies, and third-party record providers, in addition to state, federal, and local regulatory authorities.

Unlike most credit repair clinics that submit the same written complaint letters monthly, a reputable credit repair company will have devised a strategy whereby disputes are submitted electronically, verbally and in writing over a long period of time to the credit reporting agencies, creditors, collection agencies and third-party record providers reporting negative, inaccurate, obsolete and erroneous information.

Keep in mind that anything a credit repair company can do, you can do yourself for little to no cost. With that said, a reputable credit service organization should have an edge over consumer driven disputes as they will possess the education, knowledge and a source proven method that is generally unknown to the average consumer.

A reputable credit service organization should have a provable track record of results in the modification or removal of erroneous and inaccurate judgments, liens, mortgage foreclosures, bankruptcies, short-sales, student loans, credit inquiries, derogatory accounts and collection agency entries, personal identifiers and other transient data from a consumer’s credit report. Although the credit restoration process can take many months, most individuals should see some results within the first 45 to 60 days.

Credit repair, credit restoration and credit rehabilitation is as legal as pleading “not guilty” in a court of law. One must understand, though, that most credit service organizations are not law firms and that their employees may not be licensed to practice law. As such, even a reputable credit repair company cannot provide legal advice, nor may they represent a consumer before any court or in any legal proceeding. In the event that legal representation is required, the credit repair company should provide an appropriate attorney referral for consultation.

When self-help or the “do-it-yourself” approach is not feasible and you decide to hire a credit repair company to restore your credit, be sure to check them out. While the majority of credit repair clinics are scams, a few good ones do exist. Consumers can check out a credit service organization through their state Attorney General, the Federal Trade Commission at http://www.ftc.gov or through the Better Business Bureau at http://www.BBB.org.

26th Annual Jail and Bail to Benefit American Cancer Society

Over a quarter century and almost $5 million raised to benefit the American Cancer Society and cancer research, Hollywood personal injury attorney David Singer has announced the first meeting of the Jail and Bail “Parole Board” later this month.

This year’s Jail and Bail honorary chairperson is former U.S. Rep. Gwen Graham.  Committee members include Broward Sheriff Scott Israel and State Attorney Mike Satz. David Singer continues as event chairman.

Following in the footsteps of former Florida Governor and current U.S. Rep. Charlie Crist, legendary criminal defense attorney Roy Black, NSU Chancellor Ray Ferrero, retired Broward Sheriff Al Lamberti, State Attorney Michael Satz, radio personality Paul Castronovo, U.S. Rep. Debbie Wasserman Schultz, former Florida Marlins coach Jack McKeon, WPLG newscaster Kristi Krueger, former Miami Dolphins players Bernie Kosar, Jason Taylor and Dwight Stephenson, WQAM personality Joe Rose, Graham continues the tradition of influential leaders that have lent their name and support in the effort to fight cancer.

Jail and Bail has become a fast and prominent fundraiser of the American Cancer Society in Broward County.  Having developed its own unique mechanism for raising money, Singer personally picks the “Parole Board.”  Volunteers are taught how to find “jailbirds” who will make calls from a makeshift jail following their ‘arrest’ by the Broward Sheriff’s Office.

Required to ‘post bail’ to secure release, ‘jailbirds’ answer charges ranging from ‘illicit basket-weaving’ to ‘needle dusting.’  Calling friends and family to raise bail, they are released upon reaching their pledge to the American Cancer Society.

“I’m proud of what Jail and Bail has become over the years,” Hollywood personal injury attorney David Singer told South Florida Reporter. “We’ve raised almost $5 million to benefit ACS and cancer research.”

The first meeting of the Jail and Bail “Parole Board” will held at 11:30 a.m. on Thursday, April 20^th at the Sheraton Suites Fort Lauderdale at Cypress Creek, 555 NW 62^nd Street, Fort Lauderdale, 33309. Plenty of parking is available and a complementary lunch will be served.

For more information on the 26^th Annual Broward County Jail and Bail to benefit the American Cancer Society, please contact David Singer at (954) 920-1571.

FTC Cracks Down on Advance Fees to Debt Settlement Companies

The Federal Trade Commission (FTC) adopted strict new rules on Thursday that ban debt settlement companies from charging advance fees for elimination of credit card balances and other consumer debt. Effective October 27th, for-profit companies that sell debt relief services by telephone will no longer be allowed to charge a fee before they successfully settle or reduce a consumer’s outstanding debt obligation.

“This rule will stop companies who offer consumers false promises of reducing credit card debts by half or more in exchange for large, upfront fees,” FTC Chairman Jon Leibowitz,, said Thursday, accompanied by Vice President Joe Biden.  “Too many of these companies pick the last dollar out of consumers’ pockets – and far from leaving them better off, push them deeper into debt, even bankruptcy.”

The rule concerning upfront fees covers for-profit debt relief telemarketers, including credit counseling, debt settlement and debt negotiation services.  It does not cover Internet sales or nonprofit firms, but does cover companies that falsely claim nonprofit status.

Scheduled to take effect on September 27th are three additional Telemarketing Sales Rule (TSR) provisions that will require debt settlement companies to make specific disclosures to consumers; prohibit them from making material misrepresentations; and extending the TSR to cover calls consumers make to these firms in response to debt relief advertising.

Since the start of the recession, consumers from all 50 states have filed complaints with the Federal Trade Commission and the Better Business Bureau (BBB) about debt settlement companies.  In addition to the BBB, angry customers have taken their complaints to their state Attorney General.  The FTC and state enforcers have brought a combined 259 cases in the past decade to stop deceptive and abusive practices by debt relief providers that have targeted consumers in financial distress.

Attorneys General from Florida, Maine, Texas , Idaho, Missouri, New York, Illinois, West Virginia, Vermont and Minnesota have taken action against companies such as Debt Settlement America, Debt Rx USA, Financial Freedom of America, Clear Your Debt, Swift Rock Financial Solutions and Credit Solutions, a company that has received over 1,600 complaints in the past 36 months.

“My office works to protect Floridian’s from misleading debt relief activities by seeking to stop deceptive practices and resolving consumer complaints,” stated Attorney General Bill McCollum.  “In these tough economic times, a consumer’s best defense is to be aware of misleading advertisements and avoid sending money to companies offering such services.”

The rule further specifies that fees for debt settlement services may not be collected until a debt has been successfully renegotiated, settled, reduced or the contract terms have been changed.   Moreover, there must be a written settlement agreement, debt management plan or other agreement between the consumer and the creditor and the consumer must have made at least one payment as a result of the agreement negotiated by the debt relief provider.

If a consumer has enrolled multiple debts in one debt relief program, the rule specifies how debt relief providers can collect their fee for each settled debt.  To ensure providers do not front-load their fees, the fee for a single debt must be in proportion to the total fee that would be charged if all of the debts had been settled.  Alternatively, if the fee is based upon a percentage of what the consumer saves, the percentage charged must be the same for each of the debts.

The rule further specifies that consumer’s may maintain fees and savings for creditor payment in a “dedicated account.”  However, providers may only require a dedicated account under the following five conditions: the dedicated account is maintained at an insured financial institution; the consumer owns the funds (including any interest accrued); the consumer can withdraw the funds at any time without penalty; the provider does not own or control or have any affiliation with the company administering the account; and the provider does not exchange any referral fees with the company administering the account.

If you have been victimized by a debt relief program, file a complaint with the Attorney General’s Office by calling (866) 9-NO-SCAM (866-966-7226) or visiting their website at http://www.myfloridalegal.com.  The Federal Trade Commission also offers a variety of resources detailing consumer rights at http://www.ftc.gov.

Countdown to Credit Card Reform

In an ideal world, one would not worry about the recession, high unemployment rates, the foreclosure epidemic and the never ending debt load carried by the average American. In what has been referred to as the “Year of the Consumer,” 2010 has a lot to offer in federally mandated “changes” in the credit card industry.

With only eight days until enactment of The Credit Card Accountability, Responsibility and Disclosure Act of 2009, commonly known as The Credit Card Act of 2009, several changes are occurring that will have an impact on how Americans utilize their credit cards, debit cards, and gift cards. Are you aware of your rights and protections under the new law?

Consumer protection

Interest rate increases will be banned except when a cardholder is more than 60 days delinquent in paying a credit card bill.

The credit card issuer must review a cardholder’s account six months after increasing an interest rate and return the annual percentage rate to the prior lower level if all payments have been made on time.

An interest rate cannot be increased within the first 12 months of account existence and promotional rates must have a minimum of six months duration.

Advance notice of 45 days must be provided to a cardholder prior to changes in credit card terms and conditions. This includes any reward or benefit structure of a credit card.

The practice commonly known as universal default and double-cycle billing are no longer allowed.

Statements must be mailed at least 21 days before the payment due date.

Payments must be credited as on-time if received by 5 p.m. on the due date. All due dates that occur on a weekend or holiday are extended until the next business day.

Over-limit fees are now prohibited unless a cardholder specifically opts to allow processing of a transaction rather than being denied at a point of sale.

Enhanced consumer disclosures

A clear disclosure on how long it would take to pay off a credit card balance if cardholder makes only the minimum payment each month must be provided.

A clear disclosure on the total cost of interest and principal payments if a cardholder makes only the minimum payment each month must be provided.

Late payment deadline or postmark due dates are required to be clearly shown and provided to cardholders.

Protection of young consumers

Credit cards can no longer be issued to individuals under 21 unless they have an adult co-signer or prove payment ability through a reasonable income.

All college students must obtain permission from the adult co-signer to increase a credit limit on joint accounts they hold with those individuals.

Individuals under the age of 21 will now be protected from pre-screened credit card offers unless they specifically opt-in for said offers.

Gift cards

Gift cards are now required to remain active for at least five years from the day of their initial activation.

Dormancy or inactivity fees may no longer be imposed on gift cards unless there has been no activity in a 12-month period.

Dormancy or inactivity fees must be clearly disclosed to gift card buyers upon purchase.

Should a gift card expire after 5 years, the terms of expiration must be clearly disclosed to gift card buyers upon purchase.

To learn more about The Credit Card Act of 2009 and your rights and protections under the new law, visit www.tinyurl.com/thecreditreport

William E. Lewis Jr. is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

http://www2.highlandstoday.com/content/2010/feb/14/countdown-credit-card-reform/columns-welewisjr/

Loan Modification Licensure in Florida – an Industry no Longer Without Regulation

The days of simply opening up shop and starting a loan modification business have come to an end in Florida. Individuals or businesses providing loan modification services must now be licensed as a mortgage broker by the Florida Office of Financial Regulation (OFR) in order to conduct business.

The Florida Legislature recently passed Senate Bill SB 2226. This law makes significant changes to Florida’s mortgage brokerage law — Chapter 494, Florida Statutes — effective Jan. 1, 2010. In particular, the new law specifically covers negotiation of existing loans as being part of the duties of a mortgage broker. Any individual or business attempting to negotiate a loan mortgage modification will now be required to obtain a license through OFR. Additionally, there are new disclosures required in order to perform a loan modification — large type print on contracts and a three day rescission period are among a few of the changes.

The new law also requires “loan originators” to obtain a license. Prior to the amended law, there was a large loophole that allowed salaried employees of a mortgage broker to act as loan originators and still receive compensation for bringing a borrower and lender together. Although this section of the law phases in on October 1, 2010, hundreds of individuals have submitted applications to the OFR to become compliant.

The new law was sparked by hundreds of complaints filed with the state attorney general’s office in Tallahassee. While only 59 complaints were filed in 2008, the number skyrocketed to approximately 3,750 in 2009, according to Florida Attorney General Bill McCollum, who recently appeared on the Credit Report with Bill Lewis on AM 1470 WWNN.

In an effort to combat the rampant increase in foreclosure rescue scams within an industry previously unregulated, General McCollum sued three foreclosure rescue firms — and the attorneys who worked for them — alleging that they charged advance “qualifying payments” as high as $1,299 to perform loan modifications in violation of state law. Filed in Miami-Dade County Circuit Court on December 17, 2009, the suit also claims the company required clients to establish escrow accounts for additional fees and deceived them by implying the money was for legal representation.

After receiving numerous complaints — the majority originating from consumers outside Florida — the attorney general began investigating Kirkland Young LLC in July, 2009. State regulators soon realized that the business was affiliated with ABK Consultants Inc. and Attorney Aid LLC, which were also named in the suit. Although located in Miami-Dade, the businesses solicited customers nationwide. The legal action seeks to shut down the three companies, a $10,000 fine for each violation of state law, as well as restitution for consumers scammed in the process. Although in receivership, Kirkland Young has also been sued by the Federal Trade Commission.

Through Jan. 31, 2010 South Florida ranks fourth in the nation for home loan modifications, with 37,451 under President Barack Obama’s Making Home Affordable Program. Nationwide, 24 percent of the 3.3 million homes with distressed loans have been modified, according to a U.S. Department of the Treasury report. While the new law is not going to eliminate loan modification scams completely, it should make them more difficult. In 2009, the Mortgage Fraud Task Force was handling more than 200 cases of loan modification fraud. In 2008, the South Florida field office of the FBI had the second-highest number of mortgage fraud reports in the country with 5,155 reported instances.

For more information or to file a complaint, visit Attorney General Bill McCollum’s Web site at www.myfloridalegal.com.

William E. Lewis Jr., is a credit repair expert and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

http://www2.highlandstoday.com/content/2010/feb/07/loan-modification-licensure-florida-industry-no-lo/columns-welewisjr/

Protect Your Child From Identity Theft

Child identity theft occurs when a child’s identity is used by another person for the imposter’s personal gain. The perpetrator may be a family member or someone known by the family. It could also be a stranger who purposely targets children because of the lengthy time between the theft of the information and the discovery of the crime.  The Federal Trade Commission says child identity theft has doubled since 2006 with 21,344 cases reported in 2008.  In this tough economic time, it has been predicted that child identity theft will again double in 2010.

Children are often easy targets because thieves get an eight to ten year head start on them. In fact, most children who have had their identities stolen are not aware of it until they apply for credit, college, or employment.  Some of these child identity theft cases involve split families where one of the parents is the perpetrator with the crime being exposed by the other, unoffending parent. Discovery often comes:

• When attempting to open a savings/checking account or college fund. In this scenario, the unoffending parent discovers that there is already an account under the child’s social security number or that the account is denied as a result of worthless checks on file at ChexSystems;
• When numerous pre-approved credit offers come in the mail bearing the name of the child;
• When credit cards, checks, invoices or bank statements not opened by an unoffending parent as a joint holder are received bearing the name of the child;
• When collection agencies call and/or send letters about accounts not opened by the child;
• When a child is denied a driver’s license because another individual has a license with their social security number. The imposter may even have accumulated traffic citations in the child’s name;
• While going through papers during a divorce proceeding or while straightening up the house (Parental identity theft);
• When a law enforcement officer knocks at your door with a warrant for the arrest of your child.

There are instances that may appear to be identity theft but are not. Receiving a pre-approved credit card offer might upset you as a parent but may only be the pitch of a potential creditor because you opened an account or college fund in your child’s name. A quick check of credit reports will help sort out the truth. Currently, all three credit reporting agencies have automated systems. You should contact them semi-annually to request a credit report on your children. If you are advised that no credit report exists, your child is safe for the time being.  Call Equifax at (800) 685-1111; Experian at (888) 397-3742; and Trans Union at (800) 916-8800.

A common misconception is that creditors and credit reporting agencies have a method of verification when it comes to the age and identity of an applicant.  Since most creditors rely strictly upon a written application when rendering a credit granting decision and the age of an individual becomes “official” with a credit reporting agency upon the first application for credit, said reliance can be fatal in relation to identity theft.

If your child becomes a victim of identity theft, you must immediately file a police report.  Federal law mandates that credit reporting agencies investigate and correct all identity theft issues.  Nevertheless, it all starts with a properly filed police report.  Without one, creditors, collection agencies, and/or credit reporting agencies are not required to act upon your complaint.

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

http://www2.highlandstoday.com/content/2010/feb/21/lc-protect-your-child-from-identity-theft/columns-welewisjr/