Credit Repair Organizations Act
   HOME

TheInfoList



OR:

The US Credit Repair Organizations Act ("CROA") is Title IV of the
Consumer Credit Protection Act The Consumer Credit Protection Act (CCPA) is a United States law , composed of several titles relating to consumer credit, mainly title I, the Truth in Lending Act, title II related to extortionate credit transactions, title III related to restric ...
. Despite its name, it is not actually an act; Section 401 states, however, it can be referred to as "Credit Repair Organizations Act". The statute was signed by President
Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician and lawyer who was the 42nd president of the United States from 1993 to 2001. A member of the Democratic Party (United States), Democratic Party, ...
on September 30, 1996. The law was intended to prevent credit repair organizations from engaging in
unfair business practices Unfair business practices (also unfair commercial practices) describes a set of practices by businesses which are considered unfair, and which may be unlawful. It includes practices which are covered by other areas of law, such as fraud, misrepresen ...
which may result in financial hardship for consumers, particularly those of limited economic means or who are uneducated. The purposes of the Credit Repair Organizations Act is to ensure that prospective buyers of credit repair services from credit repair organizations are provided with the information necessary to make an informed decision. It intends to protect the public from unfair or deceptive
advertising Advertising is the practice and techniques employed to bring attention to a Product (business), product or Service (economics), service. Advertising aims to present a product or service in terms of utility, advantages, and qualities of int ...
and business practices by credit repair organizations. It enumerates prohibited practices, required disclosures, contract requirements, liability, and penalties for
non-compliance In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Compliance has traditionally been explained by reference to deterrence theory, according to which punishing a behavior will decrease the viol ...
and procedure to report non-compliance. One of the more important areas covered by CROA is how credit repair organizations can get paid. It is the general consensus that a credit repair company can only be paid after services have been rendered. This can be done using a monthly fee model where companies charge clients on a monthly basis after services are rendered or on the more modern pay after deletion model where clients only pay after items are deleted from the credit report. Companies that charge excess "setup" fees or all of their fees upfront violate the provisions of CROA.{{cite web , url=https://www.law.cornell.edu/uscode/text/15/1679b , title=15 U.S. Code § 1679b - Prohibited practices , publisher=Cornell University Law School , accessdate=18 March 2015


References


External links


Credit Repair Organizations ActPDFdetails
as amended in the GPObr>Statute Compilations collection

Credit Repair Organizations
United States federal financial legislation