There are some facts that are immutable: 1. The modern world as we know it runs on credit. 2. Access to credit is governed by credit scores. 3. Crime is driven by greed.
The first two facts above drive a particular type of the third. Scams, cons, hustles, and plain old fraud are some of the terms used to describe the types of crime that are the product of need for credit.
The Best Scams
Any seasoned con artist will tell you the best scams are the simplest ones that look as close to possible as something legitimate. Scams work by turning the familiar against the victim. By going just one or two steps beyond the truth, they stay within the realm of the reasonable.
Most people wouldn’t buy insurance to protect against being abducted by space monkeys even though it is possible they exist and it is even possible that they might come to earth in order to capture unsuspecting humans. It’s not likely.
However according to a February 2013 study by the Federal Trade Commission of the credit reporting industry:
- 1 in 4 people identified errors in their credit reports that would affect their scores.
- 1 in 5 people had an error corrected in at least one of their credit reports after it was disputed.
- Just over 1 in 10 consumers saw a positive change in their credit score after corrections were made.
- About 1 in 20 surveyed saw a change of more than 25 points after corrections.
- 1 in 250 individuals reported a change in their credit scores of more than 100 points.
The facts above are exactly the type of information that hustlers love. They are common enough for people to have heard about. They represent a problem that could plausibly affect anyone. Finally there is a way for them to make money offering to fix or protect you from these very real concerns.
Related Article: What Is a Credit Report?
From Bad to Worse
There are different kinds of credit repair scams and they range from the bad to catastrophic. At the bad end of the spectrum are the ones that are interested in making quick cash. While you may wind up out anywhere from less than $100 to a $1,000, the damage is limited to the cash lost and your pride. The second kind of scam can take months or years to uncover. While none of your money goes to the scammers your life can be turned upside down and inside out.
Cash cons work by selling you a fix to a real or imagined problem that does not exist. A classic example is the ominous email warning that your credit score has recently taken a turn for the worse and for $.$$ they can get it straightened out for you. Other versions include the offer of protection from credit identity theft or future erroneous negative reports.
The bottom line on these is always the same: there is service you simply send them money and they promise to fix whatever is wrong. Many of these companies will approach you unsolicited. You only want to work with a credible companies that you approach. You can view your free credit report once a year at AnnualCreditReport.com.
The second kind of scam is the potentially catastrophic variety where the con artist capitalizes on the victim’s sense of vulnerability to gather personal information such as date of birth and social security number. Armed with your personal information they open charge accounts, acquire loans and do whatever they can to get as much money from other people as quickly as possible.
Since the credit these phisherman have gotten is often issued to the fake you in another city or state you never see notices or collection calls until much later when they start hitting your credit report and aggressive collection agencies believe they have tracked the fake you to the real you.
Just Say No
The safest surest way to protect yourself from credit score scams is to just say no. Delete unsolicited emails no matter how convincing they sound or how legitimate they appear to be. Chances are unless you requested the information the email is a fake even if it appears to be from your bank or a credit reporting agency.
The same is true for the sincere sounding person on the phone who is calling as a courtesy to warn you of suspicious activity. Ask for a phone number so you can call them back, chances are they will either dodge the request or they will just hang up. No matter what the same rule applies, never give your personal information of any kind to anyone unless you are 100 percent certain who they are and who they work for.
Photo Credit: jannet162012