What is Jamming
Jamming is the name of a scam perpetrated by disreputable credit repair firms, whereby these firms 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 perfectly legitimate information which reflects negatively on a consumer's credit record, such as non-payment or chronic late payments of bills.
BREAKING DOWN Jamming
Jamming is a way that fraudulent credit repair firms make a bad situation even worse for a consumer with a poor credit score. 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. The customer often has no way to recoup the thousands of dollars they have spent on these services on these services.
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. According to the Federal Trade Commission, there are five signs to watch out for, if you think you are dealing with a fraudulent credit repair firm. These are as follows: 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; encourages you to falsify information on credit or loan applications or does not explain your legal rights.
Jamming and the Credit Repair Organizations Act
Congress has attempted to stop jamming scams through legislation like the Credit Repair Organizations Act, which bars credit repair companies from requiring payment up front, before services are rendered. The law also requires the three nationwide credit reporting companies, Equifax, Experian, and TransUnion, to provide anyone a free credit report at least every 12 months, so that consumers can understand negative entries on their credit reports. Consumers are also entitled to request a free investigation by any credit reporting company, if they believe there has been erroneous information placed on their credit reports. To protect their rights, consumers should contact both the credit reporting agency and the institution which has provided the erroneous information.