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The Credit Repair Organizations Act ("CROA") is not actually an Act, it is actually Title IV of the Consumer Credit Protection 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]

Now more than ever consumers must establish and maintain strong credit worthiness and standing in order to obtain more 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].

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.

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.[2]


  1. ^ http://www.creditrepaircompanies123.com/credit-repair-organizations-act-croa-summary/
  2. ^ http://www.law.cornell.edu/uscode/text/15/1679

Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Credit_Repair_Organizations_Act — Please support Wikipedia.
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101 news items

PR Newswire (press release)
Thu, 23 Oct 2014 05:33:45 -0700

... on October 9, 2014, the defendants -- Otto Berges; Berges Law Group, P.A.; Consumer Protection Counsel, P.A.; Debt Be Gone LLC and its owner Greg Fishman – are charged with violating several provisions of the Credit Repair Organizations Act (CROA).
Newsroom America
Wed, 29 Oct 2014 11:45:00 -0700

In exchange for this service, Middlebrook charged his clients thousands, and sometimes tens of thousands, of dollars, receiving payment before rendering services, in violation of The Credit Repair Organizations Act, the indictment said. Middlebrook ...
Mon, 25 Aug 2014 08:15:10 -0700

The unnamed defendants are charged with two counts of violating the FTC Act's prohibition on deceptive acts or practices, as well as two counts of violating the Credit Repair Organizations Act's prohibitions on collecting advance fees before providing ...
Dallas Morning News (blog)
Wed, 18 Jun 2014 14:54:06 -0700

The FTC charged in 2011 that RMCN and the Parkers violated the federal Credit Repair Organizations Act by charging up-front fees for a six-month program to improve consumers' credit ratings and by making “numerous false statements to credit bureaus ...
Huffington Post
Wed, 24 Sep 2014 12:27:38 -0700

The Credit Repair Organizations Act (CROA), which is monitored by the Federal Trade Commission, doesn't allow credit repair services to ask for money unless they have completed services that were already agreed on. Some credit repair services ask for ...
MintLife Blog (blog)
Mon, 04 Oct 2010 16:47:36 -0700

According to the Credit Repair Organizations Act (CROA), the Federal law that defines how credit repair companies must do business, a credit repair company is actually referred to as a credit repair organization (or CRO). And a CRO is anyone who “sells ...
Mondaq News Alerts (registration)
Thu, 20 Mar 2014 09:22:50 -0700

Recently the Ninth Circuit Court of Appeals issued its opinion in the appeal of Stout v. FreeScore, LLC concerning the scope of the Credit Repair Organizations Act ("CROA"). The result is not good for advertisers of credit counseling, debt relief ...


Thu, 19 Jun 2014 09:31:26 -0700

Advertisement. “The Credit Repair Organizations Act protects both individual consumers and the integrity of the credit reporting system,” said Jessica Rich, Director of the Federal Trade Commission's Bureau of Consumer Protection. “The FTC will take ...

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