credit repair scam warning sign #4

Only Accept Cash, Checks, or Money Orders

This may seem counter-intuitive. Cash and personal checks are easy and convenient, and when you are having credit troubles to begin with, the last thing you may want is to increase your credit card balance. But when it comes to credit repair and other services, you should be wary of service providers who don't allow you to pay using a credit card.

Consider this scenario. You find a credit repair company online that looks like they will be able to help your achieve your credit goals. Their website is professional looking and their prices seem reasonable. You check their payment options and the only accept cash, checks, or money orders. Undeterred, you complete their online form or call their customer service to sign up. Once that is completed, they give you an address where you should send your first payment. You put the money in an envelope, seal it, stamp it, and send it on its way.

Now is when things can go wrong. First off, how do you know your money reached its destination? If you sent cash or a money order and the credit repair company says they never received your payment, can you prove them wrong. Unless you send the money via certified mail, you have no idea. And if you didn't they know you have no proof that the payment was received and they can always claim otherwise and refuse to provide any service until you pay again.

If you had been able to pay using a credit or debit card, however, you would have full documentation of what was paid and when.

Secondly, what happens when a few months down the road, you realize that the company you hired to help you repair your credit is nothing but a scam and they have done absolutely nothing for you? If you paid with cash, it is going to be much more difficult getting your money back. Not only will you have to track down the company (many times shady credit repair shops will disappear once the heat is on), but you will have to prove that they collected payments from you. On the other hand, if you paid using a credit card, you will have a better chance of getting your money back because of the fraud protection programs that are in place.

This brings up another reason to be wary of companies that do not accept credit. In order to process credit card transactions, a company must jump through certain hoops such as setting up a merchant account which no longer allow them to fly under the radar. If a company processes credit cards and their customers are more likely to request charge backs, it draws the attention of credit card providers. Too many charge backs, and the company can lose its ability to process credit cards.

Wanting to avoid the paper trails and the attention of credit card providers, credit repair scammers avoid credit transactions. And since these scammers want to avoid attention, you can oblige by staying away from any credit repair company that does not accept credit.

Warning Signs of a Credit Repair Scam


1) Offer to Create a New Credit Report

2) Require Large Upfront Payments

3) Don't Have a Contract

4) Only Accept Cash, Checks, or Money Orders

5) Use a Third Party Payment System