Credit Repair Scam Exposed in Phoenix, Arizona

Phoenix, Arizona — Are you looking for a reputable organization offering credit repair in Phoenix, Arizona?  If so, then the following details surrounding a recent FTC shutdown of a credit repair organization in your area might interest you. In response to thousands of complaints from consumers throughout Phoenix area, the FTC shut down a local credit repair operation on Monday, September 26th,  for violating the FTC Act and the Credit Repair Organizations Act by making false and misleading statements, such as claiming they can substantially improve consumers’ credit reports by removing accurate, negative information from their credit repairs.

According to the press release published by the FTC, the credit repair organization has been defrauding Phoenix consumers for over a decade and has been the subjected to investigations by the FTC in the past. It wasn’t until complaints began coming in by the hundreds that the FTC launched a thorough investigation into the organization, ultimately finding that it has been engaging in fraudulent business practices since it’s inception.

Unsurprisingly, public opinion on the shutdown spans from relief to outright anger.

With today’s poor economic climate, the number of consumers facing overwhelming debt is rapidly rising. In fact, consumers in Phoenix, Arizona, have been amongst those hardest hit in the United States by the recession. Out of desperation, many have begun turning to credit repair organizations to repair their credit, hoping that they’ll be able to pull them out of the great economic despair they’ve found themselves in. Ultimately, this increases their likelihood of falling for predatory practices enacted by fraudulent credit repair organizations like the one above, who make promises of new beginnings, but never make good on those promises. And, while the fact remains that these predatory credit repair organizations exist, there are still many reputable ones that operate with complete compliance, but become guilty by association whenever the FTC releases information on another credit repair scam.

To Derrick Holgate, owner of Phoenix-based, Better Business Bureau-certified, credit repair organization, Crimson Credit Repair, fraudulent credit repair organizations are deplorable. According to Derrick Holgate, the owners of these organizations should be imprisoned for life. “They come into the lives of consumers when they’re at their most fragile and take complete advantage of them. It’s sickening,” stated Holgate, whose been helping Phoenix consumers fix their credit and turn over a new leaf in their lives free of the worries of debt since the mid-1990’s.

So, how does a consumer protect themselves from these predatory credit repair organizations?

Derrick Holgate has some pointers:

  • If the credit repair organization is promising that they can erase negative information, even if it’s accurate, cross them off your list. Only incorrect information can be removed, and a reputable credit repair organization knows that.
  • If the credit repair organization is asking for payment upfront, again, cross them off your list. Federal law requires credit repair organizations to give you an explanation of your legal rights, a detailed written contract, and three days to cancel. If the credit repair organization you’re looking at doesn’t do this, and instead demands upfront payment, they’re most likely fraudulent, so stay away.
  • If the credit repair organization is telling you that they’ll provide you with different tax identification or social security numbers in order to create a new credit file, and thus allow you to show potential creditors that you don’t have anything wrong with your credit, don’t even touch them with a 10-foot pole. This practice is called “file segregation” and is as illegal a practice as they come.

By sticking with these pointers, Holgate ensures that you will weed out the majority of the fraudulent credit repair organizations who are looking to defraud you. “Don’t let your economic desperation lead to further economic turmoil,” warns Holgate. “Let it be known that there are reputable credit repair organizations who aren’t out to get you! Crimson Credit Repair is an example of such a company. You owe it to yourself to do the research beforehand, so do it!”

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