You’ve probably heard of the three-card monte, a confidence game where participants are duped into placing a wager on the premise that they can pick out the “money card” from a group of three face-down playing cards.
Now comes the “three-round burst,” a tactic described in a recent Federal Trade Commission case in which a purported credit repair business disputes all negative items in a person’s credit records not once, not twice, but three times until it all but bullies the credit agency into finally caving in to the request to delete the in question items.
According to Point Perspective, a risk management business, this “credit washing” scam is common in the auto financing industry. It is currently permeating the mortgage industry, and if it hasn’t already, it will probably move into the multifamily market.
In order to put an end to what it claimed was a dishonest credit repair scheme that claimed it could repair consumers’ credit, the FTC won an injunction against Turbo Solutions, which also goes by the name Alex Miller Credit Repair, and Miller himself in April. Of course, it frequently fell short.
The company stated that “advanced disputing” could eliminate negative information from people’s credit records, but the FTC accuses Turbo and Miller of engaging in credit washing, which is a methodical approach to disputing unfavorable tradelines on false pretenses. Filing an affidavit claiming you are a victim of identity theft is one way to make a false claim.
According to the FTC, the business would dispute tradelines by filing identity theft allegations on IdentityTheft.gov, often with the consent of the customer.
A credit reporting agency has the right to refuse to delete negative information from its files if it believes that an identity theft report was made inadvertently. But Miller and his businesses persisted despite this.
Landlords and property management companies should be aware of additional scams kinds.Point Perspective, a company that uses artificial intelligence to detect fraud, claims to have found more than 6,700 fictitious employers that are connected to more than $1.7 billion in financing requests in the car industry alone. The risk management firm also claims that each week it uncovers “up to 100 new bogus employers.”
These problems are related to phony websites and forged pay stubs, and they are frequently used to persuade lenders to call phony phone lines in order to confirm a candidate’s fictitious employer.
The risk management firm further notes that some of the applicants who used fictitious employers also utilized fictitious credit reports, sometimes known as synthetic identities.
As one might anticipate, businesses are at risk when applicants present fraudulent credentials. They have a default rate of 40% to 100% in the auto industry. This can prevent landlords in the apartment industry from receiving rent payments and might encourage crime in certain neighborhoods.
In a statement announcing the Turbo/Miller order, Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, stated that “IdentifyTheft.gov is a resource for consumers, not scammers.” “Those who abuse this resource by filing fake reports can expect to hear from us.”
The Justice Department also committed to stopping credit repair companies from participating in this sort of illegal behavior by using “all tools” at their disposal.