Del Papa warns of bogus credit-clearing claims

Bob Shemeligian

Monday, Nov. 25, 1996 | 11:59 a.m.

Accurate negative information on your credit report cannot be removed, no matter what a repair service promises you.

That's the message Attorney General Frankie Sue Del Papa relayed to millions of Americans who watched "Dateline" on NBC Sunday evening.

On the program, several Las Vegas residents who had been bilked by credit repair services were interviewed.

The residents explained that after they paid the services as much as $600 to have negative credit information removed, they learned that they had been lied to, and the negative information remained on their reports.

Shelley Lubritz, Nevada deputy attorney general, referred to Del Papa's appearance on the national news program as "a wonderful marriage between the attorney general's office or any law enforcement agency and the media in order to reach a very broad audience."

Among the topics discussed on the program: a lawsuit filed by the attorney general's office and the state Consumer Affairs Division against Joseph Brammer, president of Credit Clearing U.S.A.

In the suit, Brammer, 43, who promises consumers he can wipe out bad credit reports for a fee, is charged with deceptive advertising and deceptive sales practices.

Lubritz said representatives of credit repair services often use slick sales tactics to convince people who are in dire straits that they can straighten out their credit problems for a fee.

"By the time folks come to one of these companies, they are grasping at a last straw," Lubritz said. "And the representative of the credit service tells the person what he wants to hear."

But all too often, what the person with bad credit wants to hear -- that his credit problems can be wiped out by making a few phone calls -- simply isn't true.

Lubritz explained that only the passage of time can clear bad credit. For example, it takes 7-10 years of good credit to remove a previous bankruptcy from a credit report.

"A bankruptcy that is five years old is not going to be removed legally," Lubritz said.

The president of Consumer Credit Counseling Service offers helpful hints to those who want to make a legitimate effort to straighten out credit problems.

"Two things the consumer can do immediately is to quit using credit cards and make sure you communicate with your creditors," said Michelle Johnson, president of the private, nonprofit company that is a United Way agency.

Johnson said often creditors will work with consumers to help them pay off their debts if only the consumer calls or visits the creditor.

"Creditors can be very receptive if you contact them, and they don't have to do the calling," Johnson said.

In addition, Johnson recommends that a consumer with a credit problem contact a legitimate nonprofit credit counseling service that offers free budgeting services.

"If you go with a private (for-profit) credit counseling service, you have to sign a contract, and then (often) you're indebted for 15 percent of your credit card debts," said Johnson, who added that the last thing a person who is buried in debt needs is another bill.

Representatives from a legitimate credit counseling service will sit down with the consumer and will help work out a budget by figuring out how much money is coming in and how much is going out.

In addition, Johnson said, the credit counselor will call creditors and try to convince them to go the extra mile to help the consumer.

"Creditors will make concessions for us that they will not make for individuals," Johnson said.

Is bad credit a common problem in Southern Nevada?

Johnson said the answer to that question is as obvious as all those bright lights that beckon gamblers to casinos.

"We're finding there many people here who have credit problems because of gambling, or because they moved here and things were not as they anticipated," Johnson said. "Often people discover that the cost of living is higher than they thought it would be and because they hawked everything to get here, they have problems immediately."

Del Papa