Trying to repair your credit score? Find out if credit sweeps are legal and what the potential risks of utilizing them are by reading this blog post from Credit Fitness Financial Group.
As a busy single mom, you’re likely focused on juggling your day-to-day responsibilities rather than researching financial laws. You may have heard about “credit sweeps” or read about them online, and wondered if this type of activity is legal. Instead of stressing yourself out trying to figure it out alone, Credit Fitness Financial Group is here to provide you with the information and guidance needed to handle any credit sweep inquiries that come your way – no legal encyclopedia required! Keep reading for an overview of what credit sweeps entail and what regulations must be followed in order for such practices to remain lawful.
If you’ve been watching for a while you’ll know that I release new educational content every Tuesday a lot of them are just educational in nature explaining what certain things are or how they work. Then from time to time we will talk about items that we believe are scams and frauds that some individuals or companies attempt to perpetuate on consumers who simply do not have a deep understanding of the consumer credit environment. This article is such a case and today we’re going to discuss the fraudulent and illegal process known as THE CREDIT SWEEP or credit repair sweep.
Now before we begin let’s not confuse the definition of legal and illegal. Credit Repair is not illegal. Credit Repair is completely LEGAL as long as the credit repair company follows both the Federal and State rules and laws that govern this particular industry, and as long as these laws are followed Credit Repair is perfectly legal which includes being a licensed CSO in most states. For example in Oklahoma in order to practice or provide any credit repair advice, you must be licensed by the state. So as long as this is followed in Oklahoma then Credit Repair Services are legal (now as for other states you will need to do your own due diligence as I will be addressing Oklahoma today. As a side note be sure to ask if the credit repair individual you are working with is licensed. Just so you are aware Credit Fitness Financial Group is legally licensed to teach and assist consumers with improving their credit profiles.
Now whether you choose to use a credit repair company it is your choice and your dollar. As you know you can choose to hire any service that you want or you can do it yourself. Just like you can hire a cleaning service to clean your house, you can hire a cosmetologists to make you look pretty from head to toe, you can hire a physician to get you well if you’re feeling sick, as you can see you can hire a company to do almost anything you want period. So a lot of people do in fact enlist the service of a credit repair company to get negative information removed from their credit reports.
Now one of the scams that disreputable credit repair individuals try to play on unknowing consumers is the CREDIT SWEEP. Now let me explain what a credit sweep is and then I will explain why it is ILLEGAL and how and why it can actually get YOU in trouble with the law and not so much them. There are a number of ways to avoid credit repair scams.
We all know what the goal of credit repair company is, it is NO SECRET, the goal is to have the credit reporting agencies (Experian, Equifax, & TransUnion) to remove inaccurate, erroneous, outdated information from your credit reports, prior to the period of time that the credit reporting agencies are required to do so, which is 7 years in most cases. So this means that negative information can remain on your credit report for up to 7 years and the credit repair company works to get this information removed immediately instead of waiting 7 years for it to occur. Normally letters are sent on behalf of the consumer to challenge the validity of information and asking for the Credit Bureaus to validate this information.
Credit Sweeps is not something entirely brand new it has been around, but it is newer on the other side of the spectrum. There is a Federal Statue, called the Fair Credit Reporting Act, that lays out your rights as a consumer via your credit report. One of the rights that you have is the ability and right to dispute information on your credit reports that you feel is incorrect. And if you decide to challenge the information on your credit report, the credit bureaus are required to perform an investigation to look into the claim and make a determination if the claim is valid or if the information is in fact accurate. Now section 605 (b) of the Fair Credit Reporting Act is a section that is titled Block of Information Resulting From Identity Theft.
If you have been a legitimate victim of Identity Theft and some fraudster has opened an account in your name, then you have the right as it is outlined in the Fair Credit Reporting Act to have the information removed from your credit reports. In section 605(b) of the Fair Credit Reporting Act it also obligates the credit bureaus to do 2 additional things that they do not normally have to do when they are removing inaccurate information. (1) They have to remove the item within 4 business days, normally they have 30-45 days to complete their investigation. But once they have received all the valid information regarding an alleged identity theft case they have to remove it within 4 business days. So obviously you can see the timeframe has been expedited. And (2) they have to block the information from ever showing up on your credit reports ever again. So they have to use additional man power and resources to prevent a lender from accidentally re-reporting the information.
Now these fraudsters have basically abused this section of the Fair Credit Reporting Act and they have decided that they will market and sell this type of product of service to consumers in order to take advantage of this obligation of the credit bureaus to block information that has been caused by identity theft.
So here is there scam. Their scam is that they are going to ask YOU the consumer to PRETEND that you have been a victim of identity theft and that all this negative information reporting on your credit report which is entirely valid, keep that in mind is caused by identity theft. That’s the first thing they will do. Then the second thing is that they will have you go visit a local law enforcement agency or local police station and file an affidavit police report, that is taking the verbal claim and making it a written swore statement. This is ILLEGAL, filing a FALSE POLICE REPORT is ILLEGAL you are committing Perjury. So basically these fraudsters are not only asking you to lie to the credit bureaus, but they are also asking that you lie to your local law enforcement and file a false police report. Their game plan is that once have completed this you can then send in a dispute to the credit bureaus along with a false police report, and claim that all these things are the cause of identity theft, and include a copy of affidavit report called Identity Theft Report. And they are banking on that the credit bureaus will then within 4 business days remove all the information from your credit report and blocking the information from never reporting again. Thus SWEEPING all the information that is negative from your credit report.
So clearly, as you have probably figured out by now, have been able to tell as I have been explaining it is clearly fraudulent, it is clearly illegal. Hopefully you didn’t need me to tell you that filing a false police report is against the law, and that lying to the credit bureaus is not only unethical, but down right wrong. There are legal and ethical ways to get negative items removed without committing yourself to perjury on the state and federal level, where I have seen cases where individuals have gone to jail or prison for trying to defraud the credit system. So this is something you have to decide by weighing to the pros and cons, do you want a clean credit report with the possibility of a criminal inditement, or do you want a clean credit report without the possibility of facing a criminal inditement? Personally I think the later option is the better option. I hope you learned something from this and I hope that I have helped you to recognize how to avoid these fraudulent and illegal scams known as Credit Sweeps from these fraudsters and scams credit repair individuals. I appreciate your time and if you have any questions feel free to reach out to me or leave a comment below.
To arrange a call with one of our Credit Expert Specialist, please visit our website at www.creditfitnessgroup.com or email us at info@creditfitnessgroup.com and one of our representatives will be in touch to discuss your options further. We look forward to helping you get back on the path towards financial freedom! Thank you for choosing Credit Fitness Financial Group. We are here for you!
