Credit Repair Laws:

Compliance with Federal and State Regulations

You, and not CRC, will have sole responsibility to review your marketing and collection efforts relating to the services you provide. Also, you, and not CRC, must confirm that your marketing and receipt of fees are compliant with applicable state and federal laws.

Federal Laws Governing Credit Repair

The Credit Repair Organizations Act (CROA) is a federal law passed in September 1996 that regulates organizations whose purpose is increasing consumer’s credit score through credit repair. This law is moderated and enforced by the Federal Trade Commission (FTC), so the FTC has the authority to close down any credit repair organizations that are operating outside the parameters of these laws (like fraudulent or illegal activities).

The main sections include mandates that:

• You can’t misrepresent your services (no false claims about what you will do for the client and definitely no promise of working and then not doing the work).
• You must provide a written contract between you and the client that the client signs. Your clients have three days to cancel the contract.
• You can’t charge until services are rendered (most companies will do some initial document processing and then charge the client for the work they have just done).
• Consumers can sue and get refunded all money paid (plus legal fees and damages) if the credit repair organization is found to have violated the CROA with that consumer.
• State laws can’t change or render any of the CROA ineffective.

Simply put, these laws were put in place to protect people from credit repair companies using scammy business practices.

To read the Credit Repair Organizations Act in full, visit the United States House of Representatives’ record of the act here.

If you solicit from or service customers outside of the state where you reside, you must comply with the Telemarketing Sales Rule (“TSR”). For more information, regarding the TSR you can visit the FTC’s website: https://www.ftc.gov/business-guidance/resources/complying-telemarketing-sales-rule. CRC’s statements are not legal advice. You should seek legal advice to ensure compliance.

Credit Repair Cloud requires that all customers comply with the TSR and any other applicable laws and regulations to continue using its software.

What is a surety bond?

A surety bond is a three-party agreement that legally binds your credit repair company (who needs the bond), the state (who requires the bond) and a surety company that sells the bond. If you fail to perform or cause consumers harm, the bond will cover resulting damages or losses. Choose the state you are considering doing business in and find out if a bond is required.

Licenses

Some states have specific license and/or registration requirements. For example, depending on your city and county you may be required to obtain a local tax receipt, permit, or local professional license. Click on the state you are considering doing business in to find more information.