skip to content
Primary navigation
Feature image for

News

Our mission is to protect the public interest, advocate for Minnesota consumers, ensure a strong, competitive and fair marketplace, strengthen the state’s economic future; and serve as a trusted public resource for consumers and businesses.

MN Commerce Department Offers Consumer Tips on Credit Repair Services

Agency Sanctions Burnsville Credit Repair/Debt Settlement Company

10/26/2015 10:05:23 AM

SAINT PAUL – Following an investigation and enforcement action against a Burnsville company that provides credit repair services, Minnesota Commerce Commissioner Mike Rothman is offering tips to Minnesota consumers who are seeking assistance to manage debts or improve their credit ratings.

Earlier this month, the Commerce Department imposed a $150,000 civil penalty against McGlynn Marketing, also known as United Credit Consultants (UCC) and Debt Settlement Solutions.

A consent order alleges that McGlynn used improper contracts, charged and collected improper fees, engaged in dishonest practices and demonstrated financial irresponsibility.  As part of the consent order, the company is required to reform its business practices to comply with Minnesota laws; otherwise, the Commerce Department will revoke its licenses as a credit services organization and debt settlement service provider.

“There are services available to help consumers who are in financial straits because of high debt or low credit ratings,” said Rothman.  “But consumers need to be on guard against any company that promises a quick fix or a painless way out of debt while charging illegal upfront fees.”

In Minnesota, the Commerce Department regulates credit service organizations and debt settlement service providers, both of which offer credit repair.  Neither type of business is allowed to charge a fee to a consumer until it fully performs the services outlined in a signed contract.

Credit service organizations offer education and personalized advice to consumers for a fee. They advertise that they can improve your credit rating or history, help you obtain credit and offer credit advice or assistance. 

Debt settlement service providers charge a fee for advice or to act as an intermediary between a debtor and the debtor’s creditors to obtain a settlement for less than the full amount of debt. These services include debt relief, debt negotiation and debt reduction.

In addition, the Commerce Department regulates debt management service providers. These companies also charge a fee to help over-extended consumers develop a budget and a debt management plan to re-pay creditors. They are permitted to charge a limited upfront or ongoing fee for their services.

Rothman offers the following tips to consumers who are interested in these credit repair services:

  • Make sure the business or organization is licensed in Minnesota. You can check their license status in the License Lookup Directory
  • Research the company with the Better Business Bureau at bbb.org. Check to see if it is a member of a major association like the National Foundation for Credit Counseling (nfcc.org) or the Association of Independent Credit Counseling Agencies (https://fcaa.org/).  Their members are nonprofit agencies that use certified financial counselors and meet certain quality and ethical standards.
  • Make sure you get a written contract upfront that describes all fees and services as well as your consumer rights.  
  • Do not pay any upfront fees to credit service organizations or debt settlement service providers.  They are not allowed to charge or collect any money prior to full and complete performance of services in the contract. If the debt settlement contract includes more than one debt, the provider may only charge a fee that represents a settled debt’s proportion of the total debt in the contract.
  • Beware of unrealistic promises, such as erasing your debt for pennies on the dollar in a short time or quickly reversing a bad credit score. If it sounds too good to be true, it probably is.

Commerce is here to help

Call our Consumer Services Center at 651-539-1600 or toll-free at 800-657-3602 (in Greater Minnesota) if you have any questions about credit repair services or believe you are the victim of a scam or fraud.

###

Banking & Finance

Consumers

back to top