June 25, 2009
By Mike Wayman
Dispute letters are rarely affective in getting legitimate, negative tradelines removed from a consumer credit report. The funny thing about dispute letters is that consumers can send them to the bureaus themselves as a hard copy and as an electronic dispute through the bureaus as well.
It doesn’t surprise me, then, that the FTC would come after people that guarantee simple dispute letters will remove completely accurate tradelines that report a negative credit history. While the FTC recently imposed a 21 million dollar fine against a Florida based credit repair company, American Credit Experts, the FTC was nice enough to reduce the fines against the principals of the company down to $5,000.00 each. This is extraordinarily generous. However, there are strict requirements for the principals: if they breach their agreement with the FTC to cease deceptive practices the fine remains at 21 million; if it is discovered that they lied about their financial distress the fine maintains.
Personally, I think these guys got off easy. However, they’d be pretty stupid to not comply with the FTC guidelines. If I was them, I’d find another industry!
The moral of the story here is that dispute letters really don’t solve every credit related problem. If a company claims that dispute letters alone will result in guaranteed success then the credit repair company is either ignorant of what they are able to really do with dispute letters or the firm is simply operating fraudulently.
Perhaps this FTC fine will serve as a warning to all of the credit repair firms that try and perpetrate the “Dispute letters solve all credit problems” scheme.
{ 2 comments… read them below or add one }
It’s strange that the FTC would be so lenient. Whay were these guys let off the hook?
Cool post, just subscribed.