The state of Louisiana is cracking down on so-called “credit repair” companies.
Three out-of-state companies recently received cease and desist orders from the state Attorney General’s Office. The state claims that these repair firms lacked the proper registration and licensing to operate. The companies named were Caravan Credit Repair Services of Houston, Texas, and Clean Credit and Kleen Credit of Tulsa, Oklahoma.
The firms were advertising their services in and around Baton Rouge and Lafayette, according to state officials.
Louisiana law mandates that all credit repair businesses register with the state Attorney General’s office and post a $100,000 surety bond.
In general, consumers should exercise caution and due diligence when dealing with credit repair companies. This industry is rife with scams and fraudulent firms. The Federal Trade Commission offers the following tips to help consumers recognize a credit repair scam:
- Companies that want you to pay for credit repair services before they provide any services.
- Companies that do not tell you your legal rights and what you can do for yourself for free.
- Companies that recommend that you not contact a credit reporting company directly.
- Companies that suggest that you try to invent a “new” credit identity, then order a new credit report, by applying for an Employer Identification Number to use instead of your Social Security number.
If you have concerns or questions regarding a credit repair company, contact the Better Business Bureau or your state’s Attorney General’s Office.
Make sure to do your homework and be sure that a company does, indeed, possess the required license and surety bond before you move forward.
Image: Andres Rueda