Legitimate credit repair services were designed to offer assistance in preparing a budget, disputing inaccurate information and educating consumers about best practices for managing their credit. However, many services run scams that could cause you to become worse off than if you had never tried to repair your credit. Common scams include asking for large upfront payments, flooding your creditors with disputes to generate a temporary benefit to your credit score and doing services for fees that you could easily handle yourself in a few minutes on the Internet. Federal and state laws regulate debt management, credit repair and credit education services. Federal law establishes minimum regulations, and ever-evolving state laws can be stricter.

Oregon Debt Management Laws

oregonCredit repair and debt management companies are required by Oregon law to register with the state under ORS 697.612.[1] Legitimate debt management companies can help you repair your credit, correct false information on credit reports and manage debts more effectively with budget analysis and counseling, but most people can do these things themselves. The following practices are prohibited by Oregon law:

  1. Issuing misleading statements and providing clients with false information
  2. Providing legal, accounting, debt management or bankruptcy advice unless authorized by the state of Oregon to do so
  3. Charging consumers to refer them to other companies who may or may not grant them credit for consolidation loans
  4. Performing services that don’t comply with ORS 697.652, which includes offering budget management analysis
  5. Offering services and arrangements that debtors can’t afford or be reasonably expected to execute
  6. Soliciting services without a contract that’s fully detailed and has no blank spaces
  7. Receiving fees in excess of those permitted under ORS 697.652 or assigning wages or securities in excess of permitted fees (companies can’t manage judgments, appear for the consumer in judicial proceedings or fail to perform contracted services)
  8. Forming contracts for delayed charges or allowing companies to access reserves for liquidated damages
  9. Commingling money and resources set aside to service debt with those intended for payment of fees
  10. Canceling the agreement without the consumer’s written consent except as authorized by ORS 697.652
  11. Violating any provisions of ORS 697.652
  12. Publishing or distributing material that misrepresents the services of the company or the time that credit repair will take, guarantees to improve credit ratings, promises to secure credit approvals or falsifies the qualifications of staff or business associates

The Oregon laws apply to credit repair companies, debt management services, debt consolidation arrangements, home-loan modifications, budget counseling and short-sale negotiations. Oregon sets the following maximum fees that companies can charge their clients for these types of services:[2]

  • $50 for initial counseling and $50 for education on any of the above services (no more than $100 total)
  • 15 percent of the monthly fee paid to service debt to a maximum of $65
  • Limits of $50 for a credit repair consultation and $50 for the counseling session (no more than $100 total)

If debt negotiations succeed in lowering your debts, the company can charge 7.5 percent of the amount that debts were reduced but only after the entire debt has been paid.

Do-It-Yourself-Options for Oregon Residents

creditsEventually, the only way to repair your credit is to negotiate with creditors, challenge inaccurate information on your credit reports and pay your debts. Counseling and administrative assistance can help, but you can check your credit report, challenge inaccurate information and contact your creditors to arrange different repayment arrangements or debt reductions. You can consult the federal regulations at the Department of Justice website for debtor education information and find DOJ-approved credit repair companies.[3]

Finding Reliable Debt Management Advice and Services in Oregon

It’s critical that you assess any company based on their compliance with Oregon financial regulations and credit repair laws.[4] It’s important that you don’t get misled by claims of settling for pennies on the dollar, guarantees of positive results and approaches that don’t comply with Oregon law. Beware of companies that promise to cancel your debts–even if they claim to be nonprofit–or organizations that claim to employ out-of-state attorneys who are exempt from Oregon law.

References:

  • [1] Oregonlaws.org: ORS 697.662 – Prohibited practiceswww.oregonlaws.org/ors/697.662

www.oregonlaws.org/ors/697.662

  • [2] DFR.oregon.gov: Managing your debtdfr.oregon.gov/gethelp/manage-finances/Pages/debt-management.aspx

dfr.oregon.gov/gethelp/manage-finances/Pages/debt-management.aspx

  • [3] Justice.gov: Credit Counseling & Debtor Education Informationwww.justice.gov/ust/credit-counseling-debtor-education-information

www.justice.gov/ust/credit-counseling-debtor-education-information

  • [4] DFR.oregon.gov: Managing your debtdfr.oregon.gov/gethelp/manage-finances/Pages/debt-management.aspx

dfr.oregon.gov/gethelp/manage-finances/Pages/debt-management.aspx