Dangerous ad category: Credit repair


The Federal Trade Commission just busted two purveyors of the credit repair trade, an apparently non-existent service that some unscrupulous companies claim they are qualified to offer. In this case, two such services have been shut down.

These types of operators claim that they can scrub bad or unfavorable information of a client’s credit report, including “…late payments, charge-offs, collections, tax liens, repossessions, bankruptcies, and judgments, even when the information was accurate and not obsolete,” all said to be false claims, and then the two companies charged clients in advance of doing any of these things, in violation of the Credit Repair Organizations Act.

In these two cases the companies used newspaper classifieds (see, at least somebody still advertises there) and the internet to market there services.

From the FTC, here are the six flags – six frequently misrepresented claims:

1) that they can substantially improve consumers’ credit reports by permanently removing negative information, even when it’s accurate and not obsolete;

2) that they can otherwise improve a consumer’s credit report or ability to obtain credit;

3) the full cost of their services and any restrictions;

4) material restrictions or limitations to purchase or receive goods or services;

5) any material aspect of their refund or cancellation policy; and

6) any aspect of how the goods or services will perform.

RBR-TVBR observation: If the FTC is going to start holding the media responsible for running bogus advertisements, this is a category to pay special attention to.