Credit repair companies cannot charge you upfront. You only need to pay for credit repair services after they have been performed. Many credit repair companies circumvent this rule by offering subscriptions through which you pay each month for services performed in the previous month. The FTC says BMS promised that people's credit scores would increase from 100 to 120 points in two to six weeks, an outcome they could not reliably guarantee or deliver.
The FTC also says that BMS charged upfront fees for the credit repair services it offered, which is illegal. The Credit Repair Organization Act (CROA) prohibits credit repair companies from lying about what they can do for you and charge you before they provide their services. In other words, you should avoid any credit repair company that asks you to pay “advance” or “advance” fees before they have completed the work you are paying. Since credit repair companies are prohibited from charging upfront fees for work that has not yet been done, the fee charged to you each month will be for work completed the previous month.
Ulalzheimer further explains that “in order to comply with CROA's advance fee payment provision, the credit repair company must first disclose to its customer in writing what it receives for the monthly payment and, secondly, be able to demonstrate that the services were provided in full during that month period. If you sell credit repair services and haven't checked the list lately, now is a good time to make sure you're complying with each item. As the Federal Trade Commission explains, there is nothing a credit repair company can do for you that you can't do on your own. At the end of the day, it's up to you whether or not you want to splurge to hire a credit repair company.
Even though it's illegal for a credit repair company in Iowa to charge you an upfront fee, many of them do and will. If you've been cheated through a credit repair scam or prepayment fraud, contact Brady Preston Gronlund today at (31) 866-9277 and learn how to protect yourself against fraudulent companies. A consumer from Memphis said the owner of a local credit repair company was very responsive and encouraging until the consumer paid her an upfront fee. However, if you hire a credit repair company to help you, you will have to pay fees, which can vary widely.
In addition to charging illegal initial fees, which is prohibited by the Credit Repair Organizations Act (CROA), the company is also accused of violating the FTC Act, the Telemarketing Sales Rule, the Consumer Review Fairness Act, the Truth in Loans Act and the Electronic Transfer Act of Funds. So how much exactly can you expect to disburse once you've hired a credit repair company? It all depends on who you hire. Not only that, but many credit repair companies also offer counseling to help you get your finances back on track.