RALEIGH, NC : January 8th, 2016 - By Attorney General Roy Cooper
With each New Year, new ads pop up promising to reduce debts, lower monthly payments, and fix bad credit. But the fine print often reveals hefty, hidden fees required upfront, and the reality is that these services usually do little to help. If you're one of many North Carolinians resolving to get out of debt and improve your credit in 2016, there are resources and help available--but also scams to avoid.
Under North Carolina law, it's illegal to charge advance fees for debt relief or credit repair. Consumers who pay for this kind of help usually wind up even deeper in debt, as money goes to the scammers instead of to pay bills. In recent years, my Consumer Protection Division has taken action against more than a dozen of debt relief schemes and credit repair scams to stop the fraud and win refunds when possible.
We've also cracked down on the three established credit reporting bureaus, Equifax, Experian, and TransUnion, to get them to do a better job making sure credit reports are accurate, and fixing them when they're not.
To manage your debt and protect your credit wisely, try the following:
o Contact your creditors directly to learn about your repayment options. They may work with you to set up a manageable repayment plan.
o Talk to a non-profit credit counselor. Visit nfcc.org or call 1-800-388-2227 to find a legitimate credit counselor near you.
o Before committing to a payment plan with a credit counselor, remember that under North Carolina law, they can charge no more than $40 in setup fees and no more than 10 percent of your monthly payment in administration fees, up to a maximum of $40 per month.
o Consider going over your options with a bankruptcy attorney if repayment plans won't work for you.
o Protect your credit from future damage by keeping an eye on your credit report. You're entitled to one free credit report per year from each of the three credit reporting bureaus. Look for unusual activity or unfamiliar charges and lines of credit, which are signs of identity theft.
o Dispute errors on your credit report immediately and in writing, and contact our office if you have problems.
As you pay down existing debt, keep your guard up against scams that try to trick consumers into paying fake debts. Age-old frauds like the phony tax collector telemarketing scam have been on the rise in recent months. If you get a phone call from someone claiming to work with the IRS who tries to pressure you into paying back taxes immediately, remember that they're trying to rip you off. Hang up on the caller and report them to my office.
Dispute Your Credit Report
By law, you are entitled to a free credit report each year from each of the three national credit reporting bureaus.
Notice something on your credit report that looks wrong? You can ask to fix mistakes on your credit report for free. Here's how:
o Ask the credit reporting agency for a dispute form or submit your dispute in writing along with copies of any supporting documents. Keep a copy of what you send for your records.
o Clearly identify each item in your report that you think is wrong, explain why you disagree with the information, and request a reinvestigation.
o If the credit bureau investigation changes your credit report, the credit bureau must give you the results in writing and a free copy of your report.
o Ask that a corrected version of the report be sent to anyone who got your report within the past six months. Job applicants can have corrected reports sent to anyone who got a copy for employment reasons in the past two years.
o The credit bureau cannot put the disputed information back in your file unless the creditor verifies the information. If that happens, the credit bureau must write to you and give you the name, address and phone number of the creditor.
o You can dispute the information with the creditor in writing. Many creditors, like credit card companies or banks, have an address where you can send your dispute. If the creditor reports the information to the credit bureau, it must tell them that you dispute it.
o If the reinvestigation doesn't fix the problem, have the credit bureau include your version of the dispute in your file and in future reports.
For more help and tips, or to report a scam to the Consumer Protection Division, visit www.ncdoj.gov or call 1-877-5-NO-SCAM toll-free within North Carolina.