Credit Repair Scams: How to help yourself

You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail, and maybe even calls offering credit repair services. They all make the same claims:

“Credit problems? No problem!”

“We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

“We can erase your bad credit — 100% guaranteed.”

“Create a new credit identity — legally.”

The Federal Trade Commission (FTC) says do yourself a favor and save some money, too. Don’t believe these claims: they’re very likely signs of a scam. Indeed, attorneys at the nation’s consumer protection agency say they’ve never seen a legitimate credit repair operation making those claims. The fact is there’s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.

Recognizing a Credit Repair Scam

Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies can’t deliver an improved credit report for you using the tactics they promote. It’s illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, you’re left with the same credit report and someone else has your money.

If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:

• The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
• The company doesn’t tell you your rights and what you can do for yourself for free.
• The company recommends that you do not contact any of the three major national credit reporting companies directly.
• The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
• The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
• The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.

If you follow illegal advice and commit fraud, you may find yourself in legal hot water, too: It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.

Your Rights Regarding Credit Repair

No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):

• You’re entitled to a free report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
• Each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three companies have a central website, a toll-free telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to. To order, click on annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

You can use the form in this brochure, or you can print it from ftc.gov/credit. You may order reports from each of the three consumer reporting companies at the same time, or you can stagger your requests, ordering one from each company throughout the year from the central address. Don’t contact the three nationwide consumer reporting companies individually or at another address because you may end up paying for a report that you’re entitled to get for free. In fact, each consumer reporting company may charge you up to $10.50 to purchase an additional copy of your report within a 12-month period.

• It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider.

Helping Yourself

Step 1: Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of any documents that support your position. In addition to providing your complete name and address, your letter should identify each item in your report you dispute; state the facts and the reasons you dispute the information, and ask that it be removed or corrected. You may want to enclose a copy of your report, and circle the items in question. Send your letter by certified mail, “return receipt requested,” so you can document that the consumer reporting company received it. Keep copies of your dispute letter and enclosures.
Your letter may look something like the one below.

Sample Dispute Letter Date Your Name Your Address, City, State, Zip Code Complaint Department Name of Company Address City, State, Zip Code Dear Sir or Madam: I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received. This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information. Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible. Sincerely, Your name Enclosures: (List what you are enclosing.)

Consumer reporting companies must investigate the items you question within 30 days — unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it is required to investigate, review the relevant information, and report the results back to the consumer reporting company. If this investigation reveals that the disputed information is inaccurate, the information provider has to notify the nationwide consumer reporting companies so they can correct it in your file.

When the investigation is complete, the consumer reporting company must give you the results in writing, too, and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the consumer reporting company is not permitted to put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The consumer reporting company also must send you written notice that includes the name, address, and phone number of the information provider. If you ask, the consumer reporting company must send notices of any correction to anyone who received your report in the past six months. You also can ask that a corrected copy of your report be sent to anyone who received a copy during the past two years for employment purposes.

If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay for this service.

Step 2: Tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct — that is, if the information is found to be inaccurate — the information provider may not report it again.

Reporting Accurate Negative Information

When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. To calculate the seven-year reporting period, start from the date the event took place. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance.

The Credit Repair Organizations Act

Credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. And before signing, know that a credit repair company cannot:

• make false claims about their services
• charge you until they have completed the promised services
• perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees.

Before you sign a contract, be sure it specifies:

• the payment terms for services, including the total cost
• a detailed description of the services the company will perform
• how long it will take to achieve the result
• any guarantees the company offer
• the company’s name and business address

Have You Been Victimized?

Many states have laws regulating credit repair companies. State law enforcement officials may be helpful if you’ve lost money to credit repair scams. Don’t be embarrassed to report a problem with a credit repair company. While you may fear that contacting the government could make your problems worse, remember that laws are in place to protect you. Contact your local consumer affairs office or your state Attorney General (AGs). Many AGs have toll-free consumer hotlines; check the Blue Pages of your telephone directory for the phone number or www.naag.org for a list of state attorneys general.

If You Need Help

Just because you have a poor credit report doesn’t mean you can’t get credit. Creditors set their own standards, and not all look at your credit history the same way. Some may look only at recent years to evaluate you for credit, and they may give you credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.

If you’re not disciplined enough to create a workable budget and stick to it, to work out a repayment plan with your creditors, or to keep track of your mounting bills, you might consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But remember that “nonprofit” status doesn’t guarantee free, affordable, or even legitimate services. In fact, some credit counseling organizations — even some that claim non-profit status — may charge high fees or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

If you are considering filing for bankruptcy, be aware that bankruptcy laws require that you get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust, the website of the U.S. Trustee Program. That’s the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Be wary of credit counseling organizations that say they are government-approved, but do not appear on the list of approved organizations.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and can help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

Do-It-Yourself Check-Up

Regardless of your credit history, financial advisors and consumer advocates recommend reviewing your credit report periodically for three important reasons:

1. The information in your credit report affects whether you can get a loan or insurance — and how much you will have to pay for it.
2. It’s important to make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.
3. It can help you deter, detect and defend against identity theft. That’s when someone uses your personal information — like your name, your Social Security number, or your credit card number — to commit fraud. Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.

Debt Collection Supervisors Settle FTC Charges

Concluding a case that drew the largest civil penalty ever imposed on a debt collection business, the Federal Trade Commission settled with the two remaining individual defendants who allegedly misled, threatened, and harassed consumers; disclosed their debts to third parties; and deposited postdated checks early, in violation of federal law. The settlement order requires each of these senior managers to pay a civil penalty and bars them from future violations.

“The FTC wants to remind debt collectors of their responsibilities and obligations under the law. Abusive collection actions are illegal, and if debt collectors use abusive tactics they could face legal action,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “At the same time, we want consumers to understand their rights if their debts go into collection. Money matters, and the more people know about managing their debt and dealing with debt collectors, the better off they will be.”

According to the FTC’s complaint, filed by the Department of Justice on the FTC’s behalf, the defendants participated in, or controlled, the actions of debt collectors whose unlawful practices included false or deceptive threats of garnishment, arrest, and legal action; improper calls to consumers; frequent, harassing, threatening, and abusive calls; and unfair and unauthorized withdrawals from consumers’ bank accounts. The complaint also alleged that the defendants failed to adequately investigate consumer complaints or discipline collectors, and collectors who were terminated for violating the Fair Debt Collection Practices Act (FDCPA) often were rehired within a few months.

In 2008, Academy Collection Service, Inc. and its owner, Keith Dickstein, paid $2.25 million to settle FTC charges that Academy collectors violated the FTC Act and the FDCPA while collecting debts, and that Dickstein failed to stop the violations. The settlement order announced today, negotiated by DOJ and the FTC, imposed civil penalties of $375,000 and $300,000, respectively, on Albert S. Bastian and Edward Hurt, who oversaw Academy’s Las Vegas collection center. The judgments were suspended upon payment of $7,500 each, based on their ability to pay. The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition.

The order bars Bastian and Hurt from making false, deceptive, or misleading representations in debt collection efforts, such as that nonpayment will result in garnishment of wages, seizure of property, or lawsuits, or that they or their agents are attorneys. They also are prohibited from withdrawing money from consumers’ bank accounts without their express informed consent, and from depositing or threatening to deposit postdated checks before the date on the check. In addition, the pair are barred from improperly communicating with third parties about a debt; communicating with a consumer at any unusual time or place; and harassing, oppressing, or abusing any person in connection with debt collection.

The Commission vote to authorize DOJ to file the consent decree was 4-0. The consent decree was entered in the U.S. District Court for the District of Nevada.

The Commission has released a video, at www.ftc.gov/debtcollection and www.youtube.com/ftcvideos, explaining consumer rights regarding debt collection. Consumers with questions about their rights under the FDCPA should refer to Debt Collection FAQs: A Guide for Consumers at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm.

Know your consumer rights

Many people are struggling to pay their credit card bills in this tough economy. Because many turn to businesses offering debt relief services it has encouraged lawmakers to adopt stricter regulations of financial institutions and debt settlement companies to prevent consumer abuse. Now It’s important to than ever to know your consumer rights!

Make sure you stay informed about the following consumer protections, so you do not fall prey to unscrupulous financial practices.

FTC Rules to Protect Consumers in Credit Card Debt – In July 2010 the Federal Trade Commission announced amendments to the Telemarketing Sales Rule making it illegal for debt settlement companies to collect advance fees prior to settling, reducing or otherwise resolving a customer’s credit card or other unsecured debt. The new rules require a written agreement between the consumer and the creditor and the consumer has to make at least one payment to the creditor as a result of the agreement before fees can be charged by the settlement company. The rule also prohibits debt settlement companies from making false or unsubstantiated claims about their services and fully disclose certain information prior to the consumer signing up; such as how much it will cost, the negative consequences that could result, key information about dedicated escrow accounts and how long it will take the company to get results. However, these rules to for profit organization and non-profit organizations are exempt.

Credit Card Accountability Responsibility and Disclosure Act - There are a lot of great provisions of the new CARD Act, which went into effect in February 2010 - with the final provision implement in August. The following are some of the most helpful to consumers: Time to pay your bill is 21 days instead of 14. The payment date is the same date each month instead of a floating date. Card issuers can no longer change APR, fees, or finance charges on outstanding balances unless the rate you were give was an introductory rate (lasting for only a specific amount of time) or your rate was reduced during a short-term hardship arrangement. If there are any changes in your billing/finance charges the creditors must notify you 45 days prior to the change taking effect instead of 15 days. And you have the right to opt out. The creditor must post how long it will take you to get out of debt if you pay the minimum payment due. Fees for going over the credit card limit are no longer allowed unless you specifically authorized the credit card company to allow you to make purchases that put you over the limit. Credit card companies can no longer charge a fee for payment sent by mail, electronically, or phone payments unless you need the payment to be expedited to make the payment due date. Any payment made that is over the minimum required payment must be applied towards the balance with the highest interest rate. Credit card companies are not allowed to issue cards to consumers under the age of 21, unless they can prove they have the financial means to repay the debt or they have a cosigner.

Fair Debt Collection Practices Act – Creditors and collection agencies have rules governing their collection procedures both nationally through the Fair Debt Collection Practice Act (FDCPA) and locally through state laws. These laws govern several issues. They specify how and when and where a collector may contact you. The Federal Trade Commission (FTC) states that a collector may contact you by phone, fax, or mail. They can only contact you by phone between the hours of 8 a.m. and 9 p.m. Collectors may contact others associated with you such as friends, relatives, or your boss to leave a message, find out where you live, and obtain a phone number or find out where you work. They are prohibited from discussing the debt or amount of money owed. If they contact you at work and you advise them that you cannot receive such calls they must honor your request not to contact you at work.

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector."

You should know that in either situation, the FDCPA requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe. The following are questions commonly asked about your rights under the FDCPA.

SECTION 805 – COMMUNICATION IN CONNECTION WITH DEBT COLLECTION

• Collectors may only call after 8:00 a.m. and no later than 9:00 p.m. (in your time zone).
• Collectors cannot contact you once you notify them that you are being represented by an attorney.
• Collectors may not call a consumer’s place of employment, once the consumer advises that they are prohibited from receiving such calls.
• Collectors may not communicate account specifics with any person other than the consumer himself (unless authorized by the consumer or cosigner to do so). This includes all family members.

SECTION 806 – HARASSMENT OR ABUSE

• Collectors may not use threats of violence or other criminal means.
• Collectors may not use profanity.
• Collectors may not continuously call, annoy, abuse, or harass consumers.

SECTION 807 – FALSE OR MISLEADING REPRESENTATIONS

• Collectors may not use any false or deceptive or misleading representations.
• Collectors may not threaten to take any action that cannot legally be taken.
• Collectors may not give or threaten to give out false credit information.
• Collectors may not distribute any falsely written communication simulating any document authorized, issued or approved by any court, official, or agency of the United States or any states.
• Collectors may not use any name other than the true name of the collector’s business, company, or organization.
• Collectors may not falsely imply that they are employed by a consumer-reporting agency.

SECTION 808 – UNFAIR PRACTICES

• Collectors may not use unfair or unconscionable means to collect or attempt to collect any debt.
• Collectors cannot accept a check or other payment form from the consumer that is postdated by more than five days.
• Collectors may not solicit any postdated check for the purpose of threatening or instituting criminal prosecution.
• Collectors may not deposit or threaten to deposit any postdated check prior to the date on the check.
• Collectors may not cause charges to be made to the consumer for the price of communication.
• Collectors may not take or threaten to take non-judicial action to effect dispossession or disablement of property.
• Collectors may not communicate with a consumer by postcard.
• Collectors may not use any language or symbol other than the collector’s address and name on any mail sent to the consumer.

SECTION 809 – VALIDATION OF DEBTS

• Collectors must notify the consumer in writing within five (5) days, validating their debt.

SECTION 810 – MULTIPLE DEBTS

• If a consumer owes multiple debts to one creditor and makes a payment to the collector for one specific debt, the collector may not apply such payment to any disputed debt and MUST apply the payment as the consumer directs.

The Fair and Accurate Credit Transactions Act - The FACT Act helps to combat and reduce identity theft and protects the privacy of consumer financial information. It guarantees you a free copy of your credit report every 12 months from the three major credit reporting agencies. Additionally, it implements a fraud alert system to enable consumers to place alerts on their credit files if you think you have been the victim of identity theft. Also, Account numbers on credit card receipts are now required to be shortened - removing the consumer's name and full credit card account number.

Divorce and Debt....

That vow of for better or worse also meant that you share in whatever debts you and your spouse accumulated in the marriage. Mortgages and credit cards are usually the biggest joint debts. You are both responsible for anything you have signed together like joint tax returns, joint credit card debts, joint mortgages or loans. If your spouse is spending money recklessly after you file for divorce, file a motion with the court explaining what is happening and ask for an early hearing.

Keep track of any money you pay on joint debts, especially when the debt was your spouse's responsibility.

If you live in a state where all the property acquired during the marriage is put in a pot, judges have enormous discretion as to how they divide marital debt. If your state considers only property acquired jointly, judges consider who incurred the debt and who is in a better position to pay. Other states determine which spouse is responsible for the debt.

Essential things to Remember:

• If you do share joint credit cards then you should cancel them as soon as you know your marriage is ending to insure that the balance does not increase any further. Be sure to include on your list not only your major credit cards but your department and gasoline charge cards as well. You will also want to get a new credit card in your name only so that you may begin to build individual credit.
  
  
• If your spouse is unable to pay a debt assigned to them in the divorce agreement, the credit card company or loan officer can legally require that you pay the debt. Late payments made by your spouse may show up on your credit report.
  
  
• In most states, any debt that was incurred by your spouse BEFORE you married is their sole responsibility.
  
  
• According to the Federal Trade Commission, a creditor, by law, cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or a home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.
  
  
• If you are given a portion, or all, of a marital debt to payback- consider contacting the lender to negotiate a lower interest rate. Many companies will offer a slightly lower rate if they think they will lose your business.
  
  
• Attorney Gayle Rosenwald Smith suggests that if you do hold joint debt you may want to borrow money, in your own name, to pay it off. This way you are only responsible for individual debt.
  
  
• Know that your credit card company, bank or mortgage company are not bound by your divorce agreement. Whomever's name is on the dotted line is responsible, no matter who filed for divorce.
  
  
• If you and your spouse have filed joint tax returns that you think may not have been correct you will want to speak with your attorney about adding a clause to the agreement that states that whoever is responsible for the errors be responsible for paying the tax due and or penalties.

Wage Garnishment- Title III, Consumer Credit Protection Act (CCPA)

Who is Covered

Title III of the Consumer Credit Protection Act (CCPA) is administered by the Wage and Hour Division (WHD). The CCPA protects employees from discharge by their employers because their wages have been garnished for any one debt, and it limits the amount of an employee's earnings that may be garnished in any one week. Title III applies to all employers and individuals who receive earnings for personal services (including wages, salaries, commissions, bonuses, and periodic payments from a pension or retirement program, but ordinarily does not include tips).

Basic Provisions/Requirements

Wage garnishment occurs when an employer is required to withhold the earnings of an individual for the payment of a debt in accordance with a court order or other legal or equitable procedure (e.g., Internal Revenue Service (IRS) or state tax collection). Title III prohibits an employer from discharging an employee because his or her earnings have been subject to garnishment for any one debt, regardless of the number of levies made or proceedings brought to collect it. Title III does not, however, protect an employee from discharge if the employee's earnings have been subject to garnishment for a second or subsequent debt.

Title III also protects employees by limiting the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage prescribed by Section 6(a) (1) of the Fair Labor Standards Act of 1938. This limit applies regardless of how many garnishment orders an employer receives. The federal minimum wage is $7.25 per hour effective July 24, 2009.

Title III permits a greater amount of an employee’s wages to be garnished for child support, bankruptcy, or federal or state tax payments. Title III allows up to 50 percent of an employee's disposable earnings to be garnished for child support if the employee is supporting a current spouse or child, who is not the subject of the support order, and up to 60 percent if the employee is not doing so. An additional five percent may be garnished for support payments over 12 weeks in arrears.

An employee’s "disposable earnings" is the amount of earnings left after legally required deductions (e.g., federal, state and local taxes; Social Security; unemployment insurance; and state employee retirement systems) have been made. Deductions not required by law (e.g., union dues, health and life insurance, and charitable contributions) are not subtracted from gross earnings when the amount of disposable earnings for garnishment purposes is calculated.

Title III’s restrictions on the amount of wages that can be garnished do not apply to certain bankruptcy court orders and debts due for federal and state taxes. Nor do they affect voluntary wage assignments, i.e., situations where workers voluntarily agree that their employers may turn over a specified amount of their earnings to a creditor or creditors.

Employee Rights

Title III will in most cases give wage earners the right to receive at least partial compensation for the personal services they provide despite wage garnishment. This law also prohibits an employer from discharging an employee because of the garnishment of wages for any single indebtedness. The Wage and Hour Division accepts complaints of alleged Title III violations.

Recordkeeping, Reporting, Notices and Posters

Notices and Posters

There are no poster or notice requirements under Title III of the Consumer Credit Protection Act.

Recordkeeping

There are no recordkeeping requirements under Title III of the Consumer Credit Protection Act.

Reporting

There are no reporting requirements under Title III of the Consumer Credit Protection Act.

Penalties/Sanctions

Violations of Title III may result in the reinstatement of a discharged employee, payment of back wages, and restoration of improperly garnished amounts. Where violations cannot be resolved through informal means, the Department of Labor may initiate court action to restrain violators and remedy violations. Employers who willfully violate the discharge provisions of the law may be prosecuted criminally and fined up to $1,000, or imprisoned for not more than one year, or both.

Relation to State, Local, and Other Federal Laws

If a state wage garnishment law differs from Title III, the employer must observe the law resulting in the smaller garnishment, or prohibiting the discharge of an employee because his or her earnings have been subject to garnishment for more than one debt.

Compliance Assistance Available

The Department of Labor provides employers, workers, and others with clear and easy-to-access information and assistance on how to comply with the Consumer Credit Protection Act on the Compliance Assistance "By Law"(http://www.dol.gov/compliance/laws/comp-ccpa.htm) Web page.

More detailed information, including copies of explanatory brochures and regulatory and interpretative materials such as the Federal Wage Garnishment Law Fact Sheet(http://www.dol.gov/whd/regs/compliance/whdfs30.pdf), may be obtained from the Wage and Hour Division’s Web site(http://www.dol.gov/whd/) or by contacting a local Wage and Hour Division office(http://www.dol.gov/whd/america2.htm).

Total Debt Relief's Do-It-Yourself Guide To Debt Settlemen

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