Credit Repair Company Made False Promises

January 14, 2011 20:17 by Consumer Ed

Dear Consumer Ed:

I saw a sign on a telephone pole that promised to erase my bad credit.  I contacted the company and paid them $100.00. The only thing they are doing is writing letters for me to the credit reporting agencies.None of my debt has been erased or reduced, and my credit score has not improved. Can I get my money back?

Consumer Ed says:

Under the Federal Credit Repair Organizations Act, before a credit repair company is allowed to accept any money from you, it has to do several things:

  1. Explain your rights and tell you what you can accomplish for yourself for free;
  2. Provide you with a written contract that spells out your rights and obligations, including your right to cancel in the first three days without any obligation;
  3. Complete the services it has promised to perform.

Because this company did not comply with these requirements, you are entitled to your money back.

Before you think about hiring another credit repair company, keep in mind that no one can legally remove accurate and timely information from your credit report. It can only be removed by the passage of time. Companies that promise to “erase” your “bad credit” are probably perpetrating a scam.

Watch out for these “red flags” when choosing a credit repair company:

  • Promising to remove negative but accurate information from your credit report;
  • Encouraging you to establish a new credit identity by applying for an Employer Identification Number to use instead of your Social Security Number.
  • Telling you to stop making payments to your creditors;
  • Suggesting that you dispute all the information in your credit report, even if it is accurate.
  • Telling you to ignore the IRS, collection letters or other legal documents.
  • Encouraging you to make false statements on a loan or credit application.

You should also be aware that only certain regulated professionals or entities are allowed to make credit repair promises in the state of Georgia. These include banks, savings and loan associations, attorneys, real estate brokers and certain nonprofit organizations. If the company in question does not fit that description, it is not an authorized credit repair service organization and is therefore in violation of Georgia state law.

You can report credit repair violators to the Federal Trade Commission and to the Governor’s Office of Consumer Protection by calling 404-651-8600 or 1-800-869-1123 (toll-free in Georgia, outside of the metro Atlanta calling area).

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Door-to-door magazine sales

November 4, 2010 08:38 by Consumer Ed

Dear Consumer Ed:

A teenage girl came to my door selling magazine subscriptions. She said she lived in the neighborhood and was trying to raise money for college tuition. I wrote the magazine company a check for $83 for three subscriptions. Eight weeks later, I still have not received any magazines, although my check was cashed. When I called the company, I got a recording saying, “This number is not available for incoming calls.” How can I report this company and get my money back?

Consumer Ed says:

Magazine subscription scams involving scenarios exactly like yours are very common, and have been used for years.  Usually, the salesperson claims to be a student selling magazine subscriptions, using the appeal that your sale will help send her team to a sports competition (or some other good cause), or help her get a college scholarship or other such rewards. While these solicitations can be legitimate, often they are scams simply designed to take your money.

It’s unfortunate, because there are real students out there selling door-to-door for legitimate school causes, but unless you actually know the person pitching the magazines, you should always be cautious of someone selling anything door-to-door. A door-to-door salesperson who is not selling on behalf of a school or charitable organization is usually required by the local municipality to have a permit, so ask to see the sales permit. You should always ask to see the seller’s ID, and if he claims to attend a particular college, he should be able to produce a photo ID issued by that institution; if he cannot, or if he cannot give a neighborhood address that you can easily identify as genuine, don’t place an order. 

You should also be aware that the FTC's Cooling-Off Rule protects consumers who buy from a door-to-door salesperson if the purchase is more than $25.  The Rule gives you three days to cancel your order and receive a full refund.  The seller must tell you that you have a right to cancel, and give you a summary of your cancellation rights and two copies of the cancellation form.  Always ask to see the required cancellation notice before you agree to buy.  If the salesperson doesn't have it, don't place an order – the company is breaking the law, and should be reported to the proper authorities immediately. 

If the salesperson failed to give you the cancellation form or if the company failed to send the magazines or issue you a refund, you can report the incident to your local police department.  You should also report it to the Governor’s Office of Consumer Protection by calling 404-651-8600 or 1-800-869-1123 or by going to

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Guaranteed government grants

November 4, 2010 08:05 by Consumer Ed

Dear Consumer Ed

I received a call from a company that said it could guarantee me a government grant within 3 months. They asked for an up-front fee of $2500 for writing the grant applications.  I paid the money and now I am worried that I might have been scammed. What do you think?

Consumer Ed says:

This is most likely a scam, since no one can “guarantee” that an applicant will receive a grant. Government grants are usually aimed at the needy, educational institutions, or specialists who can provide assistance to the government. A list of information about government grants and how to apply can be found at, a service of the U.S. Department of Health and Human Services.

Whenever paying anyone for information or services relating to grant assistance, always research the company.  You can check out a company’s reputation through the Better Business Bureau at In addition, ask the company in question for a copy of its business license, a list of its grant writers, a list of past successful grant applications, the names of the agencies that awarded grants, and a list of references. Keep in mind that legitimate grant-writing companies almost never telemarket, send unsolicited fax advertisements, or advertise by bulk mail to the general public.

Never give out personal information to people you don’t know, especially unsolicited telemarketers. And never pay money to get money. 

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