DEFINITION of 'Jamming'

A scam perpetrated by bogus credit repair firms that involves the mail out of dispute letters en masse to credit bureaus on behalf of consumers with spotty credit histories. Jamming is so called because it clogs up the dispute process. Since credit bureaus only have 30 days to verify disputes, an inordinately large number of dispute letters would result in their temporary removal from consumers' credit records. These dispute letters request removal of information that reflects negatively on a consumer's credit record - such as non-payment or chronic late payments of bills - but that is perfectly accurate and legitimate.

BREAKING DOWN 'Jamming'

Fraudulent credit repair firms make a bad situation even worse for a consumer with a poor credit record. These firms typically charge a substantial amount payable upfront to repair one's credit. The hapless consumer who believes that his or her credit record has been successfully repaired soon finds that the disputed information is back on the credit report, because it was correct to begin with. But now the consumer is also out of pocket to the extent of the fees paid to the credit repair firm, which often run into thousands of dollars.

Jamming also affects consumers who are legitimately disputing items on their credit records, since the fake disputes filed by fraudulent credit repair firms will clog up the system and delay the resolution of real disputes.

The Federal Trade Commission (FTC) in its "Consumer Information" section, includes "jamming" as one of the five signs of a credit repair scam:

  • the credit repair company demands upfront payment before doing any work on your behalf;
  • tells you not to contact the credit bureaus directly;
  • tells you to dispute information in your credit report even if it's accurate (i.e. jamming);
  • encourages you to falsify information on credit or loan applications;
  • does not explain your legal rights.
RELATED TERMS
  1. Credit Repair

    Credit repair is the process of fixing a bad credit report, for ...
  2. Credit Report

    A detailed report of an individual's credit history prepared ...
  3. Credit Review

    A credit review refers to the periodic reviews conducted by creditors ...
  4. Credit Mix

    The types of accounts that make up a consumer’s credit report. ...
  5. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
  6. Mixed File

    A credit bureau record that contains more than one consumer’s ...
Related Articles
  1. Personal Finance

    Spotting Credit-Repair Scams

    Credit repair scams are common in today's debt-reliant world. Don't be a victim!
  2. Personal Finance

    Extreme Credit Repair: Why It Doesn't Work

    Most of these are illegal scams at worst and a waste of time at best. Here are five extreme credit repair techniques we do not recommend.
  3. Personal Finance

    How To Dispute Errors On Your Credit Report

    It just takes some time and effort to rebound from a nasty case of "credit rejection shock."
  4. Personal Finance

    Fixing Your Credit Score: A Do It Yourself Guide

    Following these five steps can go a long way toward repairing a low score.
  5. Personal Finance

    Credit Scams To Watch Out For

    More than 30 million people were victims of fraud in 2007. Will you be next?
  6. Personal Finance

    5 Steps To Disputing A Credit Card Charge

    Federal and state laws offer protection to consumers when credit card charges are in question.
  7. Personal Finance

    10 Tips For Steering Clear Of Credit Scams

    The recession has made many vulnerable to credit-fixing scams. Don't be fooled!
  8. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  9. Personal Finance

    How To Dispute a Credit Card Charge

    Follow these steps if you've been ripped off or spot an error on your bill.
  10. Managing Wealth

    Business Vs. Consumer Credit Reports: What's the Difference?

    Find out the difference between a business credit report and a personal credit report, and why it should matter for business owners.
RELATED FAQS
  1. How do I fix an error on my credit report?

    Take control over your credit report by disputing false claims, accounts and information to the three major credit reporting ... Read Answer >>
  2. What are some examples of credit report errors that I can dispute?

    Discover how to get access to your consumer credit report, identify incorrect information, and communicate with creditors ... Read Answer >>
  3. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
  4. What's the difference between a credit bureau and a credit rating agency?

    Learn the differences between credit bureaus that report on individuals' creditworthiness and credit rating agencies that ... Read Answer >>
  5. What information do lenders need when I apply for a credit limit increase?

    Increase your credit limit by making sure your current credit is paid on time and by paying the largest amount you can afford ... Read Answer >>
  6. What do creditors have to report to credit bureaus?

    Protect your credit score by understanding how creditors report information about your debts and payments, which can affect ... Read Answer >>
Trading Center