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The 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] and was intended to prevent credit repair organizations from engaging in unfair business practices which result in financial hardship for consumers, particularly those of limited economic means or 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]


  1. ^ "15 U.S. Code § 1679 - Findings and purposes". Cornell University Law School. Retrieved 18 March 2015. 
  2. ^ "Credit Repair: How to Help Yourself". Federal Trade Commission. Retrieved 18 March 2015. 
  3. ^ "What Is The Credit Report Organizations Act?". Credit Marvel. Retrieved 18 March 2015. 
  4. ^ "Credit Repair Organizations Act (CROA)". Investopedia. Retrieved 18 March 2015. 
  5. ^ "15 U.S. Code § 1679b - Prohibited practices". Cornell University Law School. Retrieved 18 March 2015. 

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

Money Talks News (blog)

Money Talks News (blog)
Tue, 09 Feb 2016 06:15:00 -0800

Know your rights: The Credit Repair Organizations Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you or to charge you before they've performed their services. This law, enforced by the FTC, requires credit ...
Tue, 11 Aug 2015 07:26:15 -0700

... and guaranteeing consumers a credit score of 700 or above within six months or less. The FTC said the defendants violated the Credit Repair Organizations Act by making these misrepresentations and charging consumers up front for credit repair services.

Automotive News

Automotive News
Sun, 21 Jun 2015 21:10:57 -0700

The federal Credit Repair Organizations Act makes any credit-repair product with upfront fees illegal anywhere in the U.S., the New York attorney general's representative told Automotive News. Lawyers who advise dealers say such products may be legal ...

American Banker

American Banker
Wed, 27 May 2015 02:16:25 -0700

However, consumers proactively seeking to learn how to improve their credit reports and scores from consumer reporting agencies are frustrated by severe obstacles that result from the nearly 20-year-old Credit Repair Organizations Act. The original ...

The Consumerist

The Consumerist
Fri, 27 Mar 2015 12:26:51 -0700

According to the FTC, the company and employees, Maria Bernal, Guillermo Leyes, Jimena Perez and Fermin Campos, violated the FTC Act by misrepresenting their affiliation with the FTC and violated the Credit Repair Organizations Act (CROA) by charging ...

Credit.com News (blog)

Credit.com News (blog)
Thu, 15 Oct 2015 21:07:30 -0700

... right of action in a federal law — in this case, the Credit Repair Organizations Act — wasn't enough to trump the Supreme Court's support of the Federal Arbitration Act. Consumers who wanted to sue a credit repair firm were told they had to go to ...
Business Wire (press release)
Thu, 23 Apr 2015 06:30:00 -0700

WASHINGTON--(BUSINESS WIRE)--A newly released study finds that implementation of the Credit Repair Organizations Act (CROA) discourages interested consumers from learning more about their credit reports and scores, creating conflicts with other ...
Lexology (registration)
Thu, 20 Aug 2015 04:37:50 -0700

The agency alleged that the defendants violated the Federal Trade Commission Act and the Credit Repair Organizations Act by charging consumers up front for credit repair services, typically $2,000. In one radio ad, Leyes stated that FTC Credit ...

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