Before Marcus applied for a car loan he pulled his credit report and discovered an unknown collections entry that was lowering his credit score by over 80 points.
The collections agency reporting the debt was Security Credit Services and the debt itself was one Marcus knew nothing about. Like tens of thousands of other Americans each year Marcus found himself in the middle of a debt collection controversy with no idea what he should do.
Like most people, Marcus' first instinct was to pay Security Credit Services. In fact, did you know that 79% of credit reports contain errors or inaccuracies? Sometimes they are small, sometimes they are clerical errors, but many times they are completely fictional debts showing up on credit reports of people who never even incurred the debts.
This is what the debt collection industry counts on to make money, consumers not knowing their rights and not knowing the hoops that must be jumped through.
Over the next few weeks Marcus learned that there was a better way to handle this problem than paying Security Credit Services.
Who is Security Credit Services?
Security Credit Services, LLC, is a debt buyer agency with headquarters in Oxford, Mississippi. They purchase charged-off debts from original creditors for pennies on the dollar, then attempt to collect the full amount from consumers.
According to licensing information Security Credit Services is licensed to collect debts in the following states: California, Colorado, Maryland, Minnesota, Nevada, New York City, North Carolina, and Tennessee. Their parent company indicates that Security Credit Services has purchased over $30 Billion in delinquent receivables since 2003.
Security Credit Services has a history of regulatory issues that you should know about.
In March 2013 the Federal Trade Commission (FTC) settled charges with Security Credit Services for engaging in deceptive debt collection practices, resulting in nearly $800,000 in consumer restitution. The FTC complaint alleged that Security Credit Services engaged in two practices that constituted deceptive acts or practices.
First, it charged consumers an $18.95 convenience fee for paying debts by phone, without adequately disclosing that consumers could avoid the fee by paying online or by mail. Second, its affiliated law firm sent consumers letters falsely threatening them with lawsuits. At the time of the settlement, Security Credit Services had about 1.5 million debt accounts totaling $463 million.
Consumer complaints about Security Credit Services continue to mount. The CFPB Consumer Complaint Database indicates 886 complaints in a 10-year period, with 424 of those coming in just the last 3 years. The Better Business Bureau reports 414 complaints in just the last 3 years alone, with 109 of those complaints being closed in the last 12 months.
Despite this, the company has a B+ rating with the Better Business Bureau but only a 1-star customer review average.
Why Paying Security Credit Services Rarely Works
The reason most consumers call us is because they just want the problem to go away. Marcus' first instinct was to just pay the debt, but this is exactly what the debt collection agencies want. The debt collection industry makes its money off consumers not understanding that paying debts rarely, if ever, solves the credit reporting problem.
When you pay a collection it changes the status from unpaid to paid, however, the account remains on your credit report for 7 years from the original delinquency date. A paid collection still tells future lenders that you did not meet your financial obligation. We see many consumers pay debts only to find their credit score did not improve much, if at all, as a result.
Debt buyers like Security Credit Services buy debts for pennies on the dollar. Whether you pay the debt in full, settle, or make a payment that re-ages the debt they are making 100% profit on a debt they paid, in some cases, less than.04 on the dollar for.
Using Pressure to Collect Debts
The scripts debt collectors use are designed to make consumers feel like they have no choice but to pay immediately to solve the issue. Phrases like we are going to sue you, this is your last chance to settle, or if you don't pay now we will have no choice but to garnish your wages are designed to create pressure for the consumer to act now.
In almost every case there is no reason to make an immediate payment, regardless of what the debt collector says on the phone. Debt collection is just that, a business transaction, it is not an emergency. By taking the time to understand your rights and options you put yourself in a much better position to manage the outcome.
Security Credit Services sues thousands of consumers each year according to consumer defense attorneys we've interviewed. However, the majority of the time the company relies on consumers not responding to the lawsuit, resulting in a default judgment.
At least one Better Business Bureau complaint details a consumer that indicated: “I just found out Security Credit Services has garnished my wages by court order. From the court order and search for documents online I found that SCS states they provided notices and summons which I never received.”
The Power of Disputing Security Credit Services
Rather than paying Security Credit Services, Marcus challenged the accuracy of the account by disputing it with the credit bureaus. This made the credit bureaus and Security Credit Services responsible for investigating his dispute and proving the account was valid.
Debt collection agencies frequently buy and sell debts without the proper documentation. When they purchase the debt from the original creditor they may not receive all of the information on the account, sometimes they only receive a spreadsheet with basic consumer and account level information. Additionally, debt buyers frequently do not retain the signed original credit agreement, the full payment history, or proof the debt was legally transferred to them.
Consumer attorneys indicate that Security Credit Services regularly struggles to provide verification on accounts. If a consumer sends a dispute to a credit bureau the bureau must investigate and respond to the dispute within 30-days. Part of the investigation requires the credit bureau to contact the debt collection agency and request they verify the information on the account. If Security Credit Services cannot verify the account within the allotted timeframe the credit bureau must delete the account from the report.
Debt collection agencies regularly attempt to verify accounts by simply providing the basic information again, in hopes the credit bureau will just leave the account alone. Credit bureaus will actually delete accounts in cases where the information cannot be verified within a reasonable amount of time.
The Fair Credit Reporting Act (FCRA) requires credit bureaus to conduct a reasonable investigation of consumer disputes. In many cases, this means the credit bureau must contact the furnisher of the information and request that they verify the account details are accurate and complete. We regularly see debt collection agencies struggle to provide verification in response to consumer disputes. Sometimes we see them not even respond to the dispute at all.
A January 2025 ruling by the Seventh Circuit in the case of Wood v. Security Credit Services reversed a summary judgment finding there were genuine issues of material fact as to whether Security Credit Services violated the FDCPA for failure to report that a consumer had disputed the debt in writing.
Any time debts are sold from company to company it is likely that at least some of the documentation is going to be lost or destroyed. When original creditors sell debts to a debt buyer they may only provide electronic spreadsheets and not include any of the actual documentation. We see many debt collection agencies that attempt to collect debts when they have no documentation supporting their claims.
In 2012 a Florida court ruled that Security Credit Services violated both Florida and federal law when it filed a lawsuit attempting to collect a debt because the company was not properly registered as a collection agency in the state. The judge said it would be illogical to allow the filing of illegal lawsuits. These types of documentation and procedural issues are exactly the types of things consumers should use to challenge Security Credit Services activities.
How Credit Bureau Disputes Work
When a consumer files a dispute with a credit bureau the bureau must investigate and respond within 30-days. As part of the investigation the bureau will contact Security Credit Services and request they verify the account information. If Security Credit Services cannot verify the account within the allotted timeframe the bureau must delete the account.
Credit bureaus process millions and millions of disputes every year so they attempt to make the process as efficient as possible, this is why the error rate on credit reports is still so high. The efficiency of processing disputes also means that when a furnisher cannot or does not respond in a timely fashion the bureau will automatically delete the account.
When Marcus filed his dispute online he indicated to the credit bureau that he did not recognize the debt and requested they verify the account, including providing a copy of the original signed agreement. Security Credit Services now had 30-days to prove they owned the debt and that all of the information they reported was accurate. The clock was ticking.
The Power of Professional Help
While any consumer can file a credit dispute on their own there are nuances to the process that those of us who do this every day understand. We understand what documentation to request, how to spot credit reporting violations, and when to escalate to the regulatory agencies.
Debt collectors understand the difference between a form letter sent by a consumer and a well crafted dispute letter sent by a professional.
When the dispute letter comes across their desk referencing specific violations of law and regulation they recognize the consumer is on a different playing field. The information asymmetry typically enjoyed by the debt collector is reversed when the consumer engages professional representation.
There are currently 886 complaints filed with the Consumer Financial Protection Bureau (CFPB) against Security Credit Services for attempting to collect debts not owed, failure to verify debts when requested, and credit reporting issues.
One reviewer at the Better Business Bureau wrote: “This company falsely reported my credit bureaus I owe them $1400 and now my credit score is affected. I haven’t opened an account in over 10 years I am very adamant about my credit score and I worked very hard. These people are thieves.”
Professional representation helps ensure these violations are properly identified and addressed.
How to Remove Security Credit Services from Your Report
The first thing you need to do is request a copy of your credit report from each of the three credit bureaus. Once you have your reports go through them and find the Security Credit Services account, if there is one. Make sure to note the account number, balance, and the reported delinquency date. If the information is different between the three reports that is even more helpful for your dispute.
Your dispute should indicate to the credit bureau that you are challenging the accuracy of the information reported by Security Credit Services and you want the bureau to verify the account, starting with the signed original agreement. The burden of proof is on Security Credit Services, you do not have to prove you do not owe the money.
Everything you do should be well documented. Disputes should be sent certified mail with return receipt requested.
If you speak with someone on the phone make sure to log the date, time, and details of what was discussed. If Security Credit Services contacts you directly make sure to note any potential violations of the Fair Debt Collection Practices Act (FDCPA), like calling before 8:00 AM or after 9:00 PM, using abusive language, or misrepresenting the amount of debt owed.
If the credit bureau requires additional information from you make sure to respond as quickly as possible.
Removing Collections from Credit Reports
When Marcus received the response from Experian that Security Credit Services was unable to verify the account and Experian was going to remove it from his report he was relieved. Almost immediately his credit score began to improve. This is the reality of the situation, most consumers just do not understand. You can get collections removed from your credit report if they are inaccurate, in error, or fraudulent, or if they cannot be verified in a reasonable amount of time.
Debt buyers purchase collections for pennies on the dollar because they cannot verify the information, however, this also means they cannot defend the information when consumers challenge it. This is not going to work every time and sometimes requires repeating the process a few times before the desired outcome is achieved. In some situations, the investigation may uncover additional issues that support the consumer’s position even further.
Either way, challenging the debt gives the consumer options they would not have if they just paid the debt.
Conclusion
Security Credit Services is a debt buyer that operates in an industry that preys on consumer confusion and fear. Their $800,000 FTC settlement, 886 complaints with the CFPB over the last decade, and their ongoing federal lawsuits all demonstrate a pattern we believe consumers should recognize before deciding how to proceed with debts showing up on their credit reports.
It is completely understandable to want to pay a debt just to make the problem go away. However, this is what the industry wants and needs consumers to do to make money. Instead of paying, consumers should challenge Security Credit Services and the credit bureaus to verify the account information and recognize their full legal rights. Debt collectors want consumers to believe there are no options here.
What’s Your Next Step?
If you have Security Credit Services on your credit report you don’t have to deal with this on your own.
The consultants at FightCollections.com can help you navigate the process and come out on top. Our expertise is in challenging collection accounts and identifying violations of the Fair Debt Collection Practices Act. In some cases we can even help consumers remove the accounts from their credit report altogether.
Request your free credit consultation now and let us help you understand your options and make a plan to improve your credit report and score.
