Credit Repair Organizations Act: Difference between revisions
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The '''Credit Repair Organizations Act''' ("CROA") is |
The US '''Credit Repair Organizations Act''' ("CROA") is Title IV of the [[Consumer Credit Protection Act]]. 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]] on September 30, 1996.<ref>{{cite web | url=https://www.law.cornell.edu/uscode/text/15/1679 | title=15 U.S. Code § 1679 - Findings and purposes | publisher=Cornell University Law School | accessdate=18 March 2015}}</ref> The law was intended to prevent credit repair organizations from engaging in [[unfair business practices]] which may result in financial hardship for consumers, particularly those of limited economic means or who are uneducated.<ref>{{cite web | url=http://www.consumer.ftc.gov/articles/0058-credit-repair-how-help-yourself | title=Credit Repair: How to Help Yourself | publisher=Federal Trade Commission | accessdate=18 March 2015}}</ref> |
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| ⚫ | 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]] and business practices by credit repair organizations. It enumerates prohibited practices, required disclosures, contract requirements, [[Legal liability|liability]], and penalties for [[Regulatory compliance|non-compliance]] and procedure to report non-compliance.<ref>{{cite web | url=http://www.creditmarvel.com/blog/what-is-the-credit-report-organizations-act/ | title=What Is The Credit Report Organizations Act? | publisher=Credit Marvel | accessdate=18 March 2015}}</ref><ref>{{cite web | url=http://www.investopedia.com/terms/c/credit-repair-organizations-act-croa.asp | title=Credit Repair Organizations Act (CROA) | publisher=Investopedia | accessdate=18 March 2015}}</ref> |
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Now more than ever [[consumer]]s must establish and maintain strong [[credit worthiness]] and standing in order to obtain more [[Credit (finance)|credit]]. As a result many consumers who have experienced credit problems seek assistance from [[credit repair]] organizations. Some credit repair organizations, however, advertise and engage in [[unfair business practices]] which result in financial hardship for consumers, particularly those of limited economic means or are uneducated{{Citation needed|date=October 2013}}. |
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| ⚫ | 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.<ref>{{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}}</ref> |
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| ⚫ | The purposes of the Credit Repair Organizations Act is to ensure that prospective |
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| ⚫ | 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.<ref> |
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==References== |
==References== |
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==External links== |
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* [https://www.govinfo.gov/content/pkg/COMPS-260/uslm/COMPS-260.xml Credit Repair Organizations Act] ([https://www.govinfo.gov/content/pkg/COMPS-260/pdf/COMPS-260.pdf PDF]/[https://www.govinfo.gov/app/details/COMPS-260/ details]) as amended in the [[United States Government Publishing Office|GPO]] [https://www.govinfo.gov/help/comps Statute Compilations collection] |
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[[Category:United States federal financial legislation]] |
[[Category:United States federal financial legislation]] |
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* [https://helpinghandsfinancialsolutions.net/ Credit Repair Organizations] |
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Latest revision as of 07:36, 1 December 2022
 | This article needs additional citations for verification. (October 2013) |
The US Credit Repair Organizations Act ("CROA") is Title IV of the Consumer Credit Protection Act. 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 on September 30, 1996.[1] The law was intended to prevent credit repair organizations from engaging in unfair business practices which may result in financial hardship for consumers, particularly those of limited economic means or who are uneducated.[2]
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 and business practices by credit repair organizations. It enumerates prohibited practices, required disclosures, contract requirements, liability, and penalties for non-compliance and procedure to report non-compliance.[3][4]
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.[5]
References
[edit]- ^ "15 U.S. Code § 1679 - Findings and purposes". Cornell University Law School. Retrieved 18 March 2015.
- ^ "Credit Repair: How to Help Yourself". Federal Trade Commission. Retrieved 18 March 2015.
- ^ "What Is The Credit Report Organizations Act?". Credit Marvel. Retrieved 18 March 2015.
- ^ "Credit Repair Organizations Act (CROA)". Investopedia. Retrieved 18 March 2015.
- ^ "15 U.S. Code § 1679b - Prohibited practices". Cornell University Law School. Retrieved 18 March 2015.