Credit repair: practice vs. promise

Article Abstract:

Credit repair companies offer to improve a buyer's credit record, history or rating for a fee. Many of these credit services organizations also claim that they can help potential debtors extend their credit or that they can provide other forms of assistance regarding the debtors' credit-related objectives. Such companies have been recognized or legitimized in quite a number of jurisdictions, including 35 states and the District of Columbia. Adopting a 'make it legal but subject to standards' approach, these jurisdictions have enacted laws that require credit services organizations to comply with set standards. Common to these laws are a list of prohibited practices and an enumeration of disclosure requirements, such as a description of services offered and a detailed account of the buyer's rights. Credit repair activities, however, are considered illegal in the states of New Jersey, Georgia and Hawaii.

Standards, Services, Commercial credit, Credit repair companies, Credit counseling services

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Blessing or burden? The 1996 amendment to the Fair Debt Collection Practices Act

Article Abstract:

Amendments to the Fair Debt Collection Practices Act (FDCPA) were made in 1996. This act is a federal state that governs the activity of third-party debt collectors. However, some feel that the reforms actually result in more responsibilities for collectors, particularly lawyers involved in debt collection. Before the amendments, the FDCPA protected mini-Miranda requirements. This provision held that debt collectors should inform consumers in all correspondences that these communications were attempts at debt collection and that information gathered would be applied for this purpose. This amendment abandons this mini-Miranda requirement and provides that this disclosure be made only in the first communication. As a result, collectors would have to determine with each communication which disclosure is applicable and reveal that a communication comes from a debt collector.

Laws, regulations and rules, Collection (Accounting)

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Credit bureau information in insurance underwriting

Article Abstract:

Increasing concerns have been raised on the use of consumer credit reports in insurance underwriting. Some critics believe that the practice could discriminate against low-income individuals and minorities while others question the relevance of credit reports and claim that insurers are using credit information to deny coverage or increase premiums. However, insurers' use of credit reports provide several benefits to consumers. These enable insurers to determine and cover risks that may have been denied in the past. Negative underwriting factors are also offset by good credit histories. Furthermore, insurers do not use credit reports as the sole basis of underwriting decisions. They also address the privacy concerns of consumers by taking steps to maintain the confidentiality of credit information.

Insurance, Insurance Carriers and Related Activities, INSURANCE CARRIERS, Usage, Insurance industry, Information services, Credit ratings, Credit bureaus

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