In the Scam of the day for June 9, 2022 I informed you that the FTC sued credit repair scammer, Financial Education Services.  The FTC initiated legal action against Financial Education Services and its owners accusing them of scamming their victims out of more than 213 million dollars.  Now four years later the case has been settled and the FTC is sending refunds to people who were scammed by them between May of 2019 and May of 2022.

According to the FTC, Financial Education Services preyed upon consumers with low credit scores and lured them with misleading and false promises into paying for worthless services that Financial Education Services told them would result in their credit scores being increased by hundreds of points. In its lawsuit the FTC alleged Financial Education Services lied to consumers about credit repair and illegally charged their victims upfront fees for credit repair. In an interesting twist, Financial Education Services also then recruited their victims into a pyramid scheme by which they would help sell the same worthless credit repair services to others.

Your credit report is one of the most important documents in your financial life.  The information in your credit report as maintained by the three major credit reporting agencies, Equifax, TransUnion and Experian is used to calculate your credit score.  This is used by financial institutions to evaluate your creditworthiness and can affect your ability to get a credit card, mortgage loan or a car loan.  It also can affect the rate that you will be charged on such loans.  In addition, your credit score is used in many states by companies in making hiring decisions and landlords consider credit scores when determining whether or not to rent an apartment or home to someone.

For more information about the FTC refunds to victims of this scam go to the middle of the first page of the http://www.scamicide.com website and click on the icon for FTC Scam Refunds.

TIPS

Don’t fall prey to scammers operating phony credit repair companies and never pay an upfront fee to one of these companies.  Advance fees for credit repair companies that operate for profit are banned by the Credit Repair Organizations Act.

Negative information on your credit report remains on your credit report for seven years and bankruptcies for ten years.  Anyone who tells you otherwise is just trying to scam you.  Many of the scam credit repair companies use illegal tactics such as applying for a federal employer ID to use as your Social Security number when applying for credit.  This is illegal.

If you need real credit counseling you can go to this section of the Department of Justice’s website where it lists agencies approved to assist consumers with debt problems. https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111    You also may consider contacting companies that are affiliated with the National Foundation for Credit Counseling at this link https://www.nfcc.org/

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