For many individuals facing financial difficulty, the logical way to address the situation is to seek assistance from a credit repair agency. These agencies are not always reputable however and in some circumstances could result in even greater expense to individuals seeking to get out of debt. The federal government does not look kindly upon businesses that engage in these practices. One based in Florida recently faced consequences for doing this.
The credit repair operation consisting of three companies– BFS Empowerment Financial Services Inc., Help My Credit Now Credit Services Inc. and Kevtrese Enterprises Inc.– had previously been ordered by a court to stop advertising credit repairs products deemed to be “bogus.” The businesses claimed to be able to get rid of accurate information negatively impacting the credit reports of clients. In addition they were charging an advance fee of $250 referred to as an enrollment fee.
The Federal Trade Commission alleged that by continuing to engage in these activities the operation was violating the court order and a U.S. district court in Florida agreed. The owners of those businesses must now pay a fine of $6.4 million to the FTC. In addition, they can no longer operate any of the businesses.
There are many reasons that individuals may choose to go the route of a credit repair agency over exploring bankruptcy. Perhaps one of the biggest reasons is a perceived stigma surrounding such a filing. Some may feel that going that route labels them in a negative way. The reality of course is that people of all walks of life, sometimes through circumstances beyond their control, find themselves overwhelmed by debt. Another reality is that bankruptcy exists to provide a way out for those people. Taking the time to meet with an attorney who handles bankruptcy cases could be the best thing someone in this situation can do.
Source: Statesboro Business & Lifestyle Magazine, “Federal Court Finds Defendant in Contempt for Continuing to Pitch Bogus Credit Repair Services,” Allen Harkleroad