Have you ever received an offer from someone who says they can repair your credit? Whether it is an individual or a company, that person is governed under federal law once they attempt to engage in such services.
The federal Credit Repair Organizations Act, 15 U.S.C. §§ 1679-1679j, mandates:
They cannot accept payment in advance
Credit-repair organizations are prohibited by law from charging or receiving any money or valuable consideration for their services before the services are performed. See 15 U.S.C. § 1679b(b).
They must give you written disclosures
Credit repair organizations are required to provide any consumer with a written statement before entering into any contract or agreement with a consumer, and that they maintain a record of it for two years. Federal law provides that the statement be in a written document, separate from the contract, and that it substantially include:
Consumer Credit File Rights Under State and Federal Law
You have a right to dispute inaccurate information in your credit report by contacting the credit bureau directly. However, neither you nor any ‘credit repair’ company or credit repair organization has the right to have accurate, current, and verifiable information removed from your credit report. The credit bureau must remove accurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for 10 years.
You have a right to obtain a copy of your credit report from a credit bureau. You may be charged a reasonable fee. There is no fee, however, if you have been turned down for credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days. The credit bureau must provide someone to help you interpret the information in your credit file. You are entitled to receive a free copy of your credit report if you are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of public welfare assistance, or if you have reason to believe that there is inaccurate information in your credit report due to fraud.
You have a right to sue a credit repair organization that violates the Credit Repair Organization Act. This law prohibits deceptive practices by credit repair organizations.
You have the right to cancel your contract with any credit repair organization for any reason within 3 business days from the date you signed it.
Credit bureaus are required to follow reasonable procedures to ensure that the information they report is accurate. However, mistakes may occur.
You may, on your own, notify a credit bureau in writing that you dispute the accuracy of information in your credit file. The credit bureau must then reinvestigate and modify or remove inaccurate or incomplete information. The credit bureau may not charge any fee for this service. Any pertinent information and copies of all documents you have concerning an error should be given to the credit bureau.
If the credit bureau’s reinvestigation does not resolve the dispute to your satisfaction, you may send a brief statement to the credit bureau, to be kept in your file, explaining why you think the record is inaccurate. The credit bureau must include a summary of your statement about disputed information with any report it issues about you.
The Federal Trade Commission regulates credit bureaus and credit repair organizations. For more information contact:
The Public Reference Branch
Federal Trade Commission
Washington, D.C. 20580
If someone has offered to repair your credit but is asking you to pay money up front, they may be violating this federal law. One option is to contact the Florida Attorney General (see this link) or the Federal Trade Commission (see here). Although sometimes the loss is relatively small, such as within a few hundred dollars, in other situations consumers have been bilked out of paying thousands to disreputable credit-repair organizations.
If you believe you need an attorney to represent you in a civil lawsuit against the credit-repair organization if they it has violated this federal law, you can call our office for a consultation to see if it is something we can assist you with.