New Jersey Steps Up Warnings About Credit Repair Claims

While credit repair companies make lots of promises about restoring your credit rating and removing negative items from your credit report, most are just empty claims.

In New Jersey, consumer officials have launched a multi-media outreach campaign that educates consumers about how to avoid credit repair scams that may actually worsen their situation.

“Your credit history is critically important when financing a major purchase, obtaining a loan and even when applying for a job,” said Thomas R. Calcagni, Acting Director of the New Jersey Division of Consumer Affairs. “Through this outreach campaign, we want consumers to learn that everything that a credit repair company will claim to do for you legally, you can do for yourself at little or no cost. We’ve seen these so-called credit repair companies scam consumers out of hundreds of dollars while essentially doing nothing and we want consumers to be alert to these frauds.”

The outreach campaign is primarily funded by a grant from the Sears Consumer Protection and Education Fund.

Multi-media approach

The campaign includes radio ads that began airing this week and newspaper ads that will appear this Sunday. Both the radio and print ads refer consumers to the division's Website, where detailed information has been posted.

The posted information includes how to obtain a free annual credit report and how to notify the credit reporting companies of incorrect or missing information on your credit report.

“Consumers can report incorrect or missing information themselves, without the cost of hiring a company that promises to repair your credit,” Calcagni said. “Be dubious of any company that claims it can erase bad credit information from your history.”

Cracking down

The Division of Consumer Affairs filed suit against a Lakewood-based credit repair and credit counseling firm, United Credit Adjusters in October 2008, alleging that it failed to provide the promised services after clients made required payments in advance. The division also claimed that contrary to the company’s representations and advertisements, consumers’ credit scores were not raised nor was negative information eliminated from credit reports.

The two officers of United Credit Adjusters were permanently barred from doing credit counseling, credit repair, debt adjuster and bankruptcy work in New Jersey, under the terms of the Final Consent Judgment entered in 2009.

“We will investigate any and all complaints about alleged fraud committed by companies that promise to repair consumers’ credit ratings,” Calcagni said.