Grainger Legal Services, L.L.C.

Description

This page is dedicated to scams we see in our law practice. We hope this information is helpful to consumers. If you are in Alabama and become aware of other scams or similar scams and are not represented by an attorney, please email us with your story. Credit Counseling Credit counseling usually steers people into a payment plan that is not much different than the minimum payments they already cannot afford on their credit card debts. In other words, these plans don ’t work if you are “in the hole. ” If you are not “in the hole, ” maybe you should just pay your bills. Because people “in the hole ” cannot afford the payments already, these plans usually fail and result in the lowest credit scores we have seen. Some creditors may not agree to the plan and sue (e.g., Discover Bank) on the theory that the plan won ’t work anyway. Many of these companies have been shut-down for fraud but many are still around particularly on the internet. Our advice is that if you can afford the credit counseling plan, you can afford the minimum payments and whether credit counseling is a good approach depends upon whether the damage to your credit is less important than getting a 8-10% interest rate and consolidating debt. Be careful! Credit Repair Credit repair should assist people with challenging items on their credit report which are untrue. Instead, it is often used to commit fraud by seeking to remove damaging but true items from the credit report followed by quickly qualifying for a loan. The federal Credit Repair Organizations Act establishes that challenging true information is an act of fraud by both the credit repair company and their customer. It is legitimate, though, to use a reputable company (or do-it-yourself) to challenge errors on credit reports which are unfortunately common place. Examples of legitimate challenges include items caused by identity theft, mix-ups between fathers and sons with the same names (Jr.s and Sr.s); debts that have been resolved in bankruptcy and debts which have been paid-off or settled. Debt Settlement Debt Settlement scams are rampant on TV, on radio and on the internet. In our law practice, we average 3 clients per month that have been scammed by debt settlement companies. Their practices vary somewhat but as a rule-of-thumb if they offer to take a monthly payment to save your money for you and later settle with the creditor, it is most likely a scam. Most just keep your money. Some settle a small debt early in the process to hook you and then keep your money. They debit your bank account monthly and, even after you tell them to stop, they keep on until you change banks. Some say they have settled a debt but really haven ’t. None of them can protect you from getting sued by the creditors they are telling you not to pay. Even if operating legitimately, it is unlikely to work because a garnishment from one creditor can go into effect while saving to settle another one. Our firm settles debts all-at-once or none-at-all as part of our law practice.

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