To people like Bradley Lang of Bonita, the lure of a clean
credit slate was too much to resist.
Lang and several other San Diego County residents each
paid $409 last year to ICR Services in the hopes that
the Canton, Mich., company would be able to repair their
Now Lang and six others have filed suit in San Diego
Superior Court, alleging that ICR's credit repair business
was a sham and did nothing to help their credit standing.
Consumer advocates and government officials say they
are not surprised. Credit repair is a booming business,
yet the services do little to help the financially overburdened,
"Credit repair – the very name is a farce," said Paul S. Richard, executive director of the San Diego-based
Institute of Consumer Financial Education. "No one can
repair your credit history. No one has that power. You
are the only one who has any control over that."
Still, Richard's nonprofit organization gets several
complaint calls each day from consumers who say they
have paid something to erase their credit problems.
"It's the same complaint," he said. "They were told
their credit could be repaired and then they are unhappy
because they got nothing for their money."
The state Attorney General's Office also hears from
"They complain because they were made promises that
can't be kept," said Hallye Jordan, a spokeswoman for
the Attorney General's Office. "We see companies repeatedly
misrepresent their ability to fix someone's credit record."
The state does not release the number of credit repair
complaints it receives from consumers, saying such figures
would be useless since only a small percentage of schemes
ever get reported.
"People only come to us when they have no other hope,"
Jordan said. "By that point, the company is gone and
it's too late to do anything."
Consumer advocates say reputable credit repair companies
offer credit report review services only, evaluating
individuals' credit reports and making suggestions for
curing debt woes. Such companies stop short of making
promises, they say.
Credit-repair services are marketed on TV, over the
radio and in a number of low-cost ways, including newspaper
classified ads, fliers and the Internet.
"These companies have a habit of disappearing overnight,
so they may be here one minute and you can't find them
the next," Richard said.
He said some companies issue new credit histories for
their clients, simply erasing credit obligations without
reason and issuing clean, but bogus, credit reports.
"The individual will take this and think everything
is fine," he said. "Then when they apply for, say, a
car loan, they find the credit still is no good."
Another common tactic is to create a new credit identity
for an individual. Some people are encouraged by credit
repair firms to apply for an Employer Identification
Number to replace their Social Security Number.
"If you're being asked to get a get a new tax ID number
to get more credit, you've got to realize that is wrong,"
said Gerry Wilson, president of the San Diego Better
Business Bureau. "Anyone who asks you that is not legitimate.
And, you are placing yourself in a very dangerous situation
by breaking the law."
Charles LeBeau, the San Diego attorney representing
Lang and six others, declined to discuss the details
of the case.
According to court records, ICR Services is accused
of violating a federal law that prohibits individuals
and companies from collecting fees upfront for
The suit says ICR and its subsidiary, National Credit
Repair, created a marketing ruse to avoid state and
federal laws that restrict upfront fees for credit repair.
Lang and other plaintiffs purchased credit-repair courses
called "Consumer Advantage" from ICR. As part of the
course, the individuals received information pamphlets
and "free" credit repair by National Credit.
The suit says the credit repair course was "worthless"
and had been created solely to collect upfront fees.
ICR Services and National Credit Repair did not respond
to requests for interviews about the lawsuit. ICR Services
has been sued in several states over similar credit
"This kind of thing is very, very common," Richard
said. "There must be 25 or 30 individuals and companies
marketing various kind of credit-repair scams at any
The Federal Trade Commission notes that most kinds
of accurate negative information can be included on
individual's credit reports for seven years, and only
time can remove that information.
Still, there are steps consumers can take to improve
their credit situation, such as notifying creditors
right away if they are having difficulty paying bills
on time, and setting up debt repayment plans – in some
cases with low-cost or no-cost help from a nonprofit
credit counseling agency.
Richard preaches self-discipline as a method of correcting
"You have control over your credit situation, but you
have to have the patience to work through your problems,"
he said. "These aren't problems you can just wipe away
in a day. You've got to work on solving them, and that
He also blames the credit woes on consumers who have
an insatiable desire to spend.
"People who want to use these services do so because
they are desperate to continue spending," he said. "It's
not people who really want to do the right thing to
get out of debt. It's people who want to figure out
a way . . . to spend money again."
Michael Kinsman: (619) 293-1370; firstname.lastname@example.org