BBB study on credit repair, debt consolidation companies

12:22 PM, Apr 10, 2012   |    comments
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St. Louis (KSDK) - A recent study by the Better Business Bureau shows consumers deep in debt are paying thousands to scammers to fix their credit or settle their debts.

NEWSCHANNEL 5 CREDIT RESOURCES AND HOTLINE

Credit repair companies offer to erase negative credit information from your credit report.  Debt settlement businesses say they will reduce consumer debts or monthly payments by negotiating with creditors.

The BBB study found complaints about the credit repair industry rose significantly in the past five years, from 133 complaints in 2006 to 711 in 2011.

BBB STUDY: ARE THEY CREDITABLE? A STUDY OF THE CREDIT REPAIR AND DEBT SETTLEMENT INDUSTRIES, COMPLAINTS, LAWS & ENFORCEMENT

According to complaints filed with the St. Louis BBB, 85% say they received no services from the credit repair companies despite paying an average of $816 each and most received no refunds.

The BBB recommends the following to consumers looking to clean up their credit reports:

Follow the FTC advice.  Do not hire credit repair companies.  Only outdated or inaccurate information can be removed from a credit report.

Consider a trustworthy not-for-profit organization to resolve debt and credit problems.

Scrutinize a debt settlement contract and thoroughly check out a company you are considering doing business with the BBB, FTC or attorney general's office.

On Tuesday, April 10, 2012, NewsChannel 5 is hosting a CREDIT HOTLINE and offering CREDIT RESOURCES.

For more information on the BBB study, visit www.bbb.org, or call 314-645-3300.

KSDK

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