After spending over a decade in the credit services industry and talking with thousands of companies and hundreds of thousands of clients, we’ve come to the conclusion that if someone doesn’t come up with a way to protect consumers and also companies who are acting in good faith, the industry will fall apart. Obviously, this would be catastrophic for consumers and the livelihood of hard-working business owners all over the country.
The Credit Service Industry At Its Best
When credit repair is done right, it can quite literally change lives. For the identity theft victim, to the first time home buyer, the up-and-coming business owner, to the single mom who can’t get to work without being able to purchase a reliable automobile, and the many more Americans who find themselves having to navigate an incredibly complex credit system that they were never taught anything about, the difference between poor credit and good credit can be the difference between years of being underwater in debt/interest and financial prosperity.
A good credit service company can provide a wealth of knowledge and a set of tools to help consumers in many difficult situations. Over the years, we’ve witnessed the power of credit repair services that have changed the trajectory of consumers’ buying power by using the Fair Credit Reporting Act to remove devastating mistakes on credit reports while educating consumers on how to protect themselves in the future.
Authorized User Tradelines
We’ve also seen the impact that authorized user tradelines can have on individuals who have inexperienced credit on paper but have spent years faithfully paying rent and other bills while not getting official credit in the eyes of FICO.
Debt settlement companies can save consumers a tremendous amount of time, frustration, and money negotiating on their client’s behalf and navigating the endless jungles that creditors have intentionally or unintentionally created.
Credit Repair At Its Worst
For the thousands and thousands of positive examples of how credit repair can help consumers, we have also witnessed the many nefarious ways bad actors in the industry can take advantage of consumers and even make problems worse. We’ve also observed all the ways that consumers can take advantage of businesses trying to maintain federal compliance and adhering to the many laws that dictate how they can provide services.
For all the benefits that come with technology, it has made it easier for illegitimate “companies” and individuals to scam consumers and unfortunately, this problem seems to be getting worse, to the point of putting the industry in jeopardy.
With popular scams such as Credit Profile Numbers (CPNs), or companies convincing their clients to file false police reports (a common tactic involved in “Credit Sweeps”), to companies charging upfront fees with no proof of meaningful work done or results, it’s no wonder consumers have become so skeptical of the credit service industry and why consumer protection laws aimed at the industry have become so cumbersome.
Just about every company in the credit service industry is breaking the law in some way or another, whether they’re acting in good faith or not. The consumer protection rules outlined in the Credit Repair Organizations Act (CROA) in conjunction with the Federal Trade Commission’s Telecommunication Sales Rule (TSR) make operating a business in this industry without Credzu nearly impossible. Here are a couple of examples of ways that most companies are violating the law:
– Taking fees upfront (including “document fees” or “report audit fees”).
– Speaking with their clients over the phone before a contract is signed (if a company does this, they are not allowed to collect payment until 6 months after services are performed according to the TSR).
Most companies don’t even know they’re violating the law and are subject to severe penalties. One thing is for certain though, the government is not backing down and is going after companies big and small. While we understand that the laws are designed in a way that makes it nearly impossible for credit services business to survive and provide much-needed help to Americans, the industry’s reputation has resulted in the government’s desire to protect consumers.
After over a decade in the industry, countless hours digging through the laws and case studies, conversations with credit repair companies, attorneys, and CPAs, we’ve come up with a solution that allows companies to safely operate with 100% compliance while also keeping with the spirit of the consumer protection laws.
Credzu does three things:
1.) Allows companies and consumers to safely interact in an extremely easy and transparent manner without subjecting companies to the Telecommunication Sales Rule (TSR). This also protects consumers as everything is documented and in writing.
2.) Makes service transactions easy and compliant with built-in agreements and Credzu Escrow Agents who collect documents and handle money.
3.) Secures each consumer’s money in Escrow while services are performed, keeping the company in compliance, making sure they know that they will be paid as long as they perform the work agreed upon, and protecting the consumer.
For the established credit repair company: Credzu protects the business owner’s livelihood as accumulated penalties for noncompliance can be absolutely devastating and those penalties can add up fast when a company already has an established flow of clients. Credzu takes all the risk away. Also, no more performing work for clients who never pay. As long as the company does the work as agreed upon, they get paid.
For the business owner just starting off: Credzu makes establishing their business incredibly easy and helps them to ensure legal compliance. This allows them to focus on doing the repair work and not worrying about whether their business will be shut down for CROA and TSR violations.
For the consumer seeking out credit services: Credzu ensures that they only pay for services that have been performed. Their money is completely protected and the risk of being scammed is removed.
The Future of Credit Services
The FTC and Consumer Financial Protection Bureau have made it very clear that credit service companies are expected to follow the law and if they don’t, they will face serious consequences. 2020 has been a pivotal year when it comes to legal compliance and based on the number of companies shut down and currently facing penalties as well as pending lawsuits, we anticipate the coming years to be worse for non-compliant companies. Gone are the days of blissful ignorance.
Again, Credzu is the solution to all of these problems in a clean, easy to use platform.