At Veracity Credit Consultants, we cannot stress enough how important it is to know your rights as a consumer. There are three major laws in place to help protect consumers from companies operating outside of CROA and FCRA laws, such as the company featured in this article from Inside ARM:

http://www.insidearm.com/go/arm-news/credit-repair-operation-settles-with-ftc-company-made-false-claims-and-charged-illegal-up-front-fees

The Credit Repair Organization Act specifically addresses this issue, but we always feel that it bears repeating the important facts.

First and foremost, the law that this company violated was charging money up front before rendering services. It is against the law to do so, and consumers should be wary of any company that charges first and acts later.

When you sign up with Veracity, the first thing we do – prior to charging you a one-time, start-up, lifetime membership fee – is create a Veracity CORE credit profile. Each profile is tailored to each client’s unique credit situation, thus ensuring that we take only the best measures in helping remove erroneous and false information from credit reports in order to optimize credit scores. Furthermore, there is a right of rescission period, which varies from state to state. Regardless, consumers should make sure they are receiving a service before a company begins charging their account.

Another good point that comes out of this story is that not only are guarantees illegal, they are impossible to make. The fact of the matter is that credit repair services can only remove erroneous information from credit reports. Legitimate debt cannot be erased, only paid off.

Protecting the consumer from false claims is just another aspect of the CROA, and another way that federal law protects consumers against fraud and scams.