Credit repair companies provide consumers with services to dispute false or inaccurate information on their credit reports in order to improve their scores and the Credit Repair Organizations Act (CROA) ensures consumer rights are safeguarded during this process of hiring one. While these services can be beneficial, some have earned a bad rap for overselling their services or taking advantage of unwitting customers by overselling. CROA protects consumer rights throughout this process of hiring a credit repair service provider.
CROA, as part of the Consumer Credit Protection Act, regulates the business practices and advertising strategies used by credit repair organizations. It prohibits such organizations from making unauthorized promises while outlining which types of disputes they can address for consumers. Furthermore, this act ensures they receive written contracts with complete lists of fees before hiring any credit repair firm.
Before beginning work on a consumer’s report, credit repair companies must offer them access to their own credit report in order to identify any errors or mistakes they can correct. If a company refuses to share this information before commencing services, this may be a telltale sign they’re violating CROA laws.
There are certain exceptions to the Credit Reporting and Access Act (CROA), allowing certain types of companies to operate legally. A credit repair company, for instance, is permitted to contact each major credit reporting agency on behalf of consumers to dispute inaccuracies in their report; however, they cannot promise that negative items from your report will be removed; instead they must offer refunds if their services do not meet expectations.
In addition to these requirements, the Credit Repair Organization Act outlines how consumers can take legal action if they feel defrauded by a credit repair company. For example, if an untrusted firm charges upfront payments without providing written contracts or fails to provide written contracts at all, consumers can file suit to seek reimbursement of their funds and damages from that organization. CROA does not specify an exact figure but similar laws allow punitive damages claims.
Though there are ways of improving their credit on their own, some find it easier or more convenient to hire a credit repair company instead. The Credit Repair Organizations Accreditation Act ensures high standards are upheld among credit repair providers while protecting consumers against unfair claims and practices.
CROA is a key consumer protection measure, and should be reviewed before hiring any credit repair company. Doing this can give you peace of mind that you are receiving top quality service from an organization which complies with all necessary rules. If a company fails to live up to its obligations, consult with an attorney as soon as possible – they can assist in filing a suit against it and recovering any damages you are legally entitled to claim under law.
