For all the articles that appear in the mainstream media portraying companies in the accounts receivable management industry as the villains, and because a pair of the largest credit repair operations are in bankruptcy protection, we have an article that appeared in this past Sunday’s New York Times magazine that exposes some of the scammers and bad actors in the credit repair industry who do more harm than good when it comes to trying to help consumers.
The article estimates that there are 60,000 independent credit repair operations currently in the United States, and that the size of the credit repair industry is $4.4 billion, up from $3 billion in 2019. The growth of the industry comes at a time when regulators have been “vowing to rein” it in and try to put more guardrails around it, because of the negative impact that poor advice or a fraudster can have on a consumer’s credit score. The problem has become especially prevalent in the time of social media, where anyone can hang a shingle on Facebook or Tiktok and proclaim themselves a credit expert and gain a massive following of consumers.
The credit repair industry is one of “of bizarre variability — multilevel-marketing-style organizations, boiler-room operations and by-the-book agents working within onerous federal restrictions on charging fees to customers up front, before any ‘repair’ has occurred — and unequal success,” the article states. “The most successful independent credit-repair agents become millionaires, while others earn little.”
There are plenty of stories and anecdotes from individuals trying to make a living selling honest credit repair services, and why they think what they do is so important, while also providing details about the origins of credit scores and credit repair to provide context and some important details.
Reading all the way through the article, it’s impossible not to notice parallels between the ARM industry and the credit repair industry. Both are maligned by a small number of scammers who give the rest of their industry a bad name. And both have small operations trying to eke out a living at a time when that is becoming increasingly difficult because of stiff competition and rising expenses.
