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10 Ways to Spot A Scam

The Creditbar serves up Water Cooler discussion topics for friends and family.

10 Ways To Spot A Scam

1. Beware of credit repair companies that charge fees in advance

Never trust a credit repair company that asks you to pay before they render the service. This is a common scam – the so-called “company” takes your money, never gets back to you, and conveniently vanishes without a trace when people begin to complain. Hundreds and thousands of dollars can be lost to such hoaxes. Truly legitimate credit repair companies will not and in fact cannot charge you for advance fees due to the Credit Repair Organizations Act, which requires all such companies to bill for services only after they have been performed. The Credit Bar adheres strictly to those rules, and charges fees only after the initial setup and work for each month has been performed.


2. Beware of credit repair companies that recommend creating "new" identities

Some credit repair companies will tell you to apply for an Employer Identification Number (EIN) and use its tax ID number to replace your social security number. This creates a clean, “new” identity for you, free of the questionable items on your real credit reports. The “new” identity is then used to apply for credit. Sound good? Well, they’re not telling you something. THIS PROCESS IS ILLEGAL. Creating a double credit identity is a crime known as Segregation and may get you into serious trouble. Do not trust any credit repair companies that advocate this method!


3. Beware of companies that imply FTC endorsement

The Federal Trade Commission does not endorse any business, period. If any credit repair organization claims or hints at FTC endorsement, chances are they are lying and should not be trusted.


4. Beware of companies that Do Not Disclose Your Rights

Do not trust any credit repair companies that jump straight to the contract. Under the Credit Repair Organizations Act, all credit repair organizations are required to give their clients a written disclosure explaining their legal rights before they sign the contract. If a company does not do this, they are breaking the law and you have the right to sue them.


5. Beware of companies that guarantee your credit score will increase

No credit repair company can full-on promise you that your credit score will increase. Not only is it prohibited by certain additional guidelines in the Credit Repair Organizations Act, it is simply impossible, probability-wise. No matter how slim, there is always that niggling, unlikely possibility of failure, and any company that tells you otherwise is lying.


6. Beware of companies that do not allow you to cancel at anytime

Do not trust any credit repair company that does not allow you to cancel service whenever you want. This is prohibited by the Credit Repair Organizations Act, and your company is trying to cheat you.


7. Beware of Repair Agencies that are not accredited by the Better Business Bureau & in Good Standing

Fraudulent companies often do not bother to register with the Better Business Bureau (BBB), because the BBB keeps track of complaints made against companies. If the company is not registered with the BBB, chances are they have something to hide. Always make sure to check the BBB rating of your credit repair company before registration; if the rating is low or there are multiple unresolved complaints, do not trust that company. In addition, keep an eye out for any credit repair company that does not list credit repair services as an offering in their BBB filing.


8. Beware of companies who do not accept credit cards, debit cards and direct bank drafts (ACH)

Here at the Credit Bar, we offer multiple forms of payment including but not limited to credit cards, debit cards, and direct bank drafts (ACH). Not all companies can offer these choices. Cheap scams, fraudulent companies, or companies that are not well established will usually not be able to forego the strict bank requirements needed for them to accept electronic payments in any form (especially online); the Credit Bar is only able to accept direct bank drafts because we believe in and maintain a great relationship with our banks.


9. Beware of companies that do not give you a written contract

Do not trust any company that does not supply you with a written contract. The Credit Repair Organizations Act requires all credit repair companies to supply clients with a written contract detailing the terms and conditions of payment and describing in-depth the services to be provided, including any guarantees of performance and an estimate of the time it will take to perform the task.


10. Beware of companies who guarantee their results

No company can guarantee a specific outcome; it is simply out of the realms of probability. Take a court case. No matter how good the lawyer, he cannot guarantee the jury will find his client innocent. So it is in the credit industry - companies who guarantee certain results are sure signs of fraud in the making.

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While the testimonials and other information on this website may be exciting, The CreditBar promises only to perform the steps we've agreed to in each client's case and to charge each month only for steps already completed. As with any work, no outcome is promised. Your results may vary.