Credit repair operator’s bogus letter writing earns an “F”
RMCN Credit Services, Inc. — one of the nation’s largest credit repair companies — has agreed to settle charges that it lied to credit bureaus about information in people’s credit reports and illegally collected fees before performing any services.
Problem Number One: RMCN sent more than a million phony letters to credit bureaus. The company’s method for improving consumers’ credit reports was to systematically lie to credit bureaus and challenge negative information — without regard to its accuracy — through letters disguised as though they were sent by consumers. Company employees signed the letters using the consumers’ names, and often used fictitious reasons for disputing negative items, like “not my account,” “paid prior to collection,” and “creditor agreed to remove account.”
Problem Number Two: RMCN charged consumers more than $40 million in illegal advance fees for its services. RMCN charged two types of advance fees: a retainer that ranged from $900 to $2,000, and a monthly service charge. The company used automatic bank drafts to collect monthly service charges of $89 to $109 for the duration of its six-month program. RMCN collected the monthly service charge regardless of whether any service was performed that month. All of RMCN’s fees were collected before the company completed its six-month service.
The Credit Repair Organizations Act prohibits making any untrue or misleading statement to a credit bureau and bars the collection of any money for credit repair service before the service is fully performed.
The bigger picture here? The company’s practice of lying to credit bureaus degrades the accuracy and completeness of information in our nation’s credit reporting system. This indirectly harms all consumers because the lack of reliable credit records forces credit grantors to raise their interest rates and reduce credit availability to people with good credit histories.
If you’re looking for a way to improve your credit report, do yourself a favor and save some money, too. Anything companies like RMCN claim they can do for you for a fee, you can do yourself for free. It takes time, a conscious effort, and sticking to a personal debt repayment plan to make it happen.