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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 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]

References[edit]

  1. ^ http://www.creditrepaircompanies123.com/credit-repair-organizations-act-croa-summary/
  2. ^ http://www.ftc.gov/os/statutes/croa/croa.shtm

Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Credit_Repair_Organizations_Act — Please support Wikipedia.
This page uses Creative Commons Licensed content from Wikipedia. A portion of the proceeds from advertising on Digplanet goes to supporting Wikipedia.

7 news items

 
ConsumerAffairs
Mon, 25 Aug 2014 08:11:15 -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 ...
 
ACA International
Fri, 22 Aug 2014 10:35:56 -0700

The FTC's complaint charges the unnamed defendants 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 ...
 
Kansas City infoZine
Tue, 26 Aug 2014 06:07:30 -0700

The FTC's complaint charges the unnamed defendants 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 ...
 
SC Magazine
Mon, 25 Aug 2014 13:03:29 -0700

The “Bill Payment Government Assistance Program” violated the FTC Act prohibiting deception acts when it claimed to be funded by the federal government and endorsed by President Obama and violated the Credit Repair Organizations Act by collecting fees ...
 
Courthouse News Service
Thu, 21 Aug 2014 06:07:30 -0700

WASHINGTON (CN) - The American Bill Pay Organization and the American Benefits Foundation, whose bosses and even addresses are unknown, bilk consumers by claiming they administer a nonexistent federal program "that purports to pay as much as ...
 
Broadway World
Mon, 04 Aug 2014 04:15:00 -0700

Additionally, the industry's negative reputation stemming from deceptive practices and charging advanced fees for services, both of which violate the Credit Repair Organizations Act, introduced skepticism in industry services; this further encouraged ...
 
Korea Daily
Sat, 16 Aug 2014 16:03:45 -0700

검색엔진 구글과 빙(Bing)에 'credit repair'를 입력해 검색해 보면 무려 4천 만개가 검색된다. 융자 조건이 까다로워지면서 나쁜 크레딧으로 주택 융자를 받기는 힘들다. 주택 구입 뿐만 아니라 주택 렌트, 각종 융자, 심지어 차량 보험을 구입하고 직장을 구하는 ...
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