Credit Repair Organizations Act

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"Credit Repair Organizations Act"

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Article: "Credit Repair Organizations Act"
By Andre Plessis

"Credit Repair Organizations Act (CROA)"

The Credit Repair Organizations Act (CROA) is a federal law which governs how credit repair companies may do business, and prohibits certain mal practices. This law passed by congress with the understanding that consumers who have credit problems may look for help from credit repair companies, which offer to improve their credit standing.

Understanding what a credit repair organization may legally do for you will help you eliminate those companies who make promises they can’t keep, and who will steal your hard earned money without giving much in return.

The purpose of the CROA is to ensure that consumers are given the information they need to make an informed decision regarding the purchase of credit repair services; and to protect the public from unfair or deceptive advertising and business practices by credit repair agencies.

The CROA prohibits credit repair agencies from:

	Making any statement, or advising a consumer to make any statement, about a consumer’s credit standing or credit worthiness which is untrue or misleading to any creditor, potential creditor, or consumer reporting agency.
	Making or use any misleading representation of what services the credit repair company can and will provide, including a promise to remove accurate negative items from the credit report.
	Engaging in any act that results in fraud, or the deception of any person, in connection with the offer or sale of credit repair services .
	Requesting payment or a deposit in advance of services being performed.
	Advising a consumer to create a new taxpayer identification number for the purposes of creating a new credit identity.

In addition to specifying what a credit repair agency cannot do, the CROA also requires that credit repair agencies:

	Provide a copy of the contract to the consumer.
	Provide a 3-ay “cooling off” period before the contract takes effects and services begin to be rendered by the credit repair agency.
	Provide their prospects or potential clients with a written explanation of the rights afforded by the CROA before a contract is signed, including the consumer's right to contact the credit bureaus himself.
	Provide a written contract, which sets forth the services to be performed, any guarantees, and all payment arrangements.

In addition to the above, a credit repair agency can not ask a consumer to waive any of their rights under the CROA; if a consumer does waive his or her rights under the CROA, the waiver is not enforceable by the credit repair agency in a court of law.

If you believe your rights under the CROA have been violated, can sue and report the agency to the Federal Trade Commission, which keeps tracks of such complaints, and enforces the laws against agencies who continually violate the laws.

To Your Success,

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Credit Repair Organizations Act (CROA)

How to avoid credit repair scams

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Andre Plessis

Andre Plessis
"The Mortgage Guru"
"A Mortgage Professional whose primary goal is to provide the expertise, guidance and skills necessary to obtain the best mortgage to meet your personal needs".
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