The City of Chicago Department of Business Affairs and Consumer Protection (BACP) recently filed consumer fraud and deceptive practice charges against 9 Chicago area  credit repair companies.

BACP charged four of the companies with falsely promising they could erase consumers’ debt from their credit reports. Under the Fair Credit Reporting Act, if consumers’ credit reports show past debts that are accurate, only the passage of time can remove that information. BACP is seeking full restitution for the victims of these four companies: Mark Anthony & Associates, Allstates Credit Repair, Credit Rx, and Nationwide Credit Clearing.

“These companies knowingly took advantage of consumers by making false promises to repair their credit,” said Commissioner of the Department of Business Affairs and Consumer Protection, Norma I. Reyes. “Consumers must know their rights, to assert their rights. Consumers should be clear, bad credit takes time to repair. Credit repair companies claiming that they can erase your bad credit, even though it is accurate, or give you a new credit identity, are typical signs of a scam, “ said Reyes.

The law also requires credit repair companies to register with the Secretary of State before conducting any business whatsoever. Seven companies were charged with improperly operating without having registered with the Illinois Secretary of State, as required by law.

All nine companies improperly demanded payment before performing any services. Only a few, highly-regulated professions can charge up-front fees if they happen to perform credit repair work for their clients. Examples are banks and other financial institutions, lawyers, mortgage brokers, and real estate brokers while working on a real estate deal. Otherwise, most companies that are advertising “credit repair services” can only charge up-front fees if they have filed a bond with the Secretary of State.

The following are the Credit Repair Companies:
Mark Anthony & Associates Incorporated, 8800 N. Bronx Ave., Skokie, IL.
Charged with making false promises, being an unregistered business and demanding up-front fees.

Allstates Credit Repair, 5648 W. Goodman Ave., Chicago, IL.
Charged with making false promises, being an unregistered business and demanding up-front fees.

Credit Rx, LLC, 3320 Winchester Ln., Glenview, IL.
Charged with making false promises, being an unregistered business and demanding up-front fees.

Nationwide Credit Clearing, Inc., 2320 N. Damen Ave., Suite 2C, Chicago, IL.
Charged with making false promises and demanding up-front fees.

Pinnacle Consulting Group & Associates Inc., 8550 S. Stony Island Ave., Chicago, IL.
Charged with being an unregistered business and demanding up-front fees.

Credit Cures Corporation, 318 W. Adams St., Suite 1404, Chicago, IL.
Charged with being an unregistered business and demanding up-front fees.

International Credit Clearing, LLC, 1401 W. Hubbard, Suite 1W, Chicago, IL.
Charged with being an unregistered business and demanding up-front fees.

Credit Utopia Incorporated, 1525 E. 53^rd St., Suite 805, Chicago, IL.
Charged with being an unregistered business and demanding up-front fees.

Credit Builders of Illinois Co., 7330 S. Exchange Ave., Chicago, IL.
Charged with demanding up-front fees.

All nine companies face maximum charges of up to $50,000 each and restitution.

In one case, the victim incurred significant debt while a student. She went to Mark Anthony & Associates, Inc and was falsely told that with an upfront payment of $300 she would have certain bad debt removed from her credit report. They also told her that she would have good credit in three months time. In addition, Mark Anthony Giddens, the President of Mark Anthony & Associates, Inc., represented himself as an attorney when confronted by a BACP investigator. He was issued a violation for the deceptive practice of misrepresenting himself as an attorney. Mr. Giddens is not a licensed attorney in Illinois.

In another case, the victim paid $850 to repair her credit and her parents’ credit. She was told that Allstates Credit Repair could remove specific major bad debt from her credit report. The bad debt was legitimately her debt, but she was falsely promised by Allstates that the debt could be removed and her credit repaired.

Consumers should know what a credit repair company can do- and that is help you dispute certain items to the nationwide consumer credit reporting companies. This is common when there are items on a credit report that may not be accurate, may be duplicated, already paid or not yours. You can also dispute these types of items yourself.

To help consumers learn more about credit and credit repair, the Department of Business Affairs and Consumer Protection offers the “Top 10 Things Every Consumer Should Know About Credit” brochure available online at www.chicago.gov/bacp .

The follow are important tips for consumers:

• Know the signs of a scam when the person you are dealing with:Promises they can simply “erase” your bad credit.  Suggests you create a new credit identity.  Recommends that you do not contact any of the nationwide credit reporting agencies directly.  Will not give you a written contract or three days to cancel, as required by Illinois law.
• Investigate credit repair companies that you are considering hiring. You can call the Secretary of State at 217.782.7017 to check if a company is registered and bonded.
• Consumers with inaccurate items on their credit report may dispute them themselves, in writing… for free.
• Proactively monitor your credit. A free credit report is available to consumers one time per year at www.annualcreditreport.com or by calling 1.877.322.8228.
• Consumers who feel they have been a victim of consumer fraud or deceptive business practices should call 311 to file a complaint with BACP.

Today, Commissioner Reyes also reminded consumers about new Federal laws, under the Credit Card Accountability Responsibility and Disclosure Act of 2009 — the Credit CARD Act — that will go into effect next week. These new laws will provide consumers the protections. These measures will also help consumers avoid actions that can lead to negative credit.

Some of the most significant changes include:

• Prevention of deceptive marketing of credit reports: Companies often advertise “free credit reports,” only to hit consumers with hidden fees and unwanted services. The new laws require any company offering a free credit report to prominently state: “This is not the free credit report provided for by Federal law.”
• Improved monthly statements: In each monthly statement, credit card companies are now required to show consumers how long it would take to pay off their balance if they paid only the minimum payment each month and how much interest they would pay by doing so. Also included will be details warning consumers about the high costs of making only the minimum payment.
• Over the limit fees will be prohibited: Over the limit fees will be prohibited unless consumers explicitly consent to pay for that privilege. Also, over the limit fees may be imposed only one time during the billing cycle – and not for each transaction that exceeds the credit limit.
• Protection for young consumers: Consumers under the age of 21 will only be issued a credit card when they have a co-signer that is over 21 or they can prove that the debt can be repaid. For more information on the new Credit CARD Act visit www.fdic.gov.

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