Just a quick note to remind our clients and friends to be wary of credit repair services. The Credit Repair Organizations Act (the “CROA”) defines a credit repair organization as any person or business who sells, provides, or performs (or represents that such person can or will sell, provide, or perform) any service for the express or implied purpose of improving any consumer’s credit record, credit history, or credit rating. Payment must be required for the services.
The CROA places many limitations on credit repair organizations. But one of the most important restrictions is section 1679b(b), which prohibits these companies from charging or receiving “any money or other valuable consideration for the performance of any service … before such service is fully performed.” Essentially, the law prohibits a credit repair organization from requiring payment in advance.
This is one of the most-violated federal consumer protection statutes. If you have been required to pay such a company before it performs any services, you are entitled to a refund or any damage caused by the company, whichever is higher. If you’ve had a negative interaction with such a company, please give us a call.