March 9, 2010
Jefferson City, Mo. - Attorney General Chris Koster said today difficult economic times have created profitable opportunities for credit repair scam artists.
Koster said credit repair scammers target consumers with credit problems and charge big up-front fees with the promise to clean up their credit file. He reminded consumers that it is against the law in Missouri to require payment before these types of services have been provided.
"The fact is, no one can clean up your credit report if it's accurate," Koster said. "Companies that tell you they have an ‘in' with credit bureaus, know about secret loopholes, can convince a creditor that you don't owe a debt, or can get you a new, clean credit report are simply being untruthful. If there are genuine errors on your credit report, you can get those removed yourself at no cost."
Koster said he is filing a lawsuit today against Credit Repair and Counseling Specialists, LLC, and Brenda Lynne Coday in Springfield, charging fraud, deception and failure to comply with statutory requirements placed on firms offering credit repair services. According to the lawsuit, the business did not perform all the services for customers it promised, and did not provide refunds for services not provided.
Koster is asking the court to issue a permanent injunction requiring Credit Repair and Counseling Specialists and Coday to comply with the law; require the defendant to provide full restitution to victims; pay a civil penalty of $1,000 per violation; pay the state 10 percent of the total restitution; and pay the cost of investigative and prosecution fees.
Koster suggested that consumers having credit problems get counseling through their local Consumer Credit Counseling Service, which provides help for free or at a very low cost. If consumers have discovered errors on their credit report, they can contact the credit reporting agency directly.
Koster is issuing a "scam of the day alert" each day this week as part of National Consumer Protection Week.