DLLR Announces "Operation Repair"


Commissioner of Financial Regulation warns against false claims from credit repair businesses

BALTIMORE (December 4, 2008) – Department of Labor, Licensing and Regulation Secretary Thomas E. Perez and Commissioner of Financial Regulation Sarah Bloom Raskin announced “Operation Repair,” an effort to protect Marylanders who deal with credit services businesses, often called “credit repair businesses,” that make false claims and promises they cannot deliver.

Businesses offering credit repair services often target consumers with troubled credit by advertising that they can “erase bad credit,” “create a new credit identity,” or “remove bankruptcies, judgments, liens and bad loans from credit reports.”

In an effort to protect Marylanders from fraudulent claims by these unscrupulous businesses, the Office of Financial Regulation is proactively investigating credit repair companies doing business in Maryland to ensure they are licensed and are abiding by the law. The office will take action against any companies found to be operating without a license, or violating the law by charging up front fees or through other illegal practices.

“In this economic climate, false claims that promise improved credit can be tempting for many,” Secretary Perez said. “Marylanders should be wary of falling victim to false advertising that sounds too good to be true.”

“No one can remove accurate information from an individual’s credit report, even if the information is negative,” Commissioner Raskin said. “Legitimate credit repair companies must be licensed to do business in Maryland, and consumers should know their rights.”

Under the Maryland Credit Services Businesses Act, credit repair companies must be licensed by the Commissioner of Financial Regulation. They cannot charge up-front fees for their services, they must enter into a written contract with customers and they must provide customers with certain written disclosures. Customers have the right to cancel a contract with a credit services company any time prior to midnight of the third business day after the transaction. Violators may be subject to up to $5,000 in fines, imprisonment for up to three years, or both. There is also the possibility of additional civil penalties.

Any consumer who chooses to do business with a credit repair company should ensure the company is licensed. The consumer should also avoid hiring a company that advises against contacting a credit reporting company directly, advises the consumer to dispute all of the information in the credit report, or does not inform the consumer of his or her legal rights. To find out if a company is licensed, call 410-230-6155. To file a complaint, call 1-888-784-0136. For more information, visit the Financial Regulation website.