Is Credit Repair Legal?
This one is serious. I’m not an attorney. So all the information I give you guys cannot be construed as I am an attorney.
So the legal advice that I’m not giving you is just to help you understand the laws and if you have to watch this video 50 times so you’ll understand it, or if you have questions, make sure that you ask and post the comments below.
So today we’re going to talk about CROA, and what that means is the Credit Report Organization Act, excuse me, Credit Repair, Credit Repair Organization Act.
So some of the laws in Credit Repair prohibit us from doing certain things.
So what I’m going to do is read a few and that way we can make sure that you guys are staying compliant.
Because here’s the deal.
In credit repair, you have to remember there are so many companies out there that are deceptive, that are stealing people’s money, not performing services, literally people that don’t even have a contract.
So why I bring this to you is to make sure that you guys are in step, that you’re doing the right thing to protect yourself. We’ve been doing this for years, staying within the law, making sure that you’re doing the right thing.
Again, I do this to help you, not to get you guys worried. Follow the laws, do the right thing and in your heart, in your heart, know that you are trying to help people and you’ll be fine.
Let me read this to you.
First thing I want to read to you from CROA is coming out of 1679B, okay? So this is chapter 1679B, Prohibited Practices.
“No person make any statement or counsel or advise any consumer to make any statement which is untrue or misleading or which upon the exercise of reasonable care should be known by the credit report organization, officer, employee, agent, or any other person to be untrue or misleading with respect to any consumers’ creditworthiness, credit standing or capacity.
Any consumer reporting agency as defined in section 161A or any person who has extended credit to a consumer to whom the consumer has applied or is applying for an extension of credit.”
You cannot tell people that they are guaranteed to get X. Make any false claims, predict any outcomes.
That’s not your job, okay?
“You can’t make any statement”, this is section two, “or counsel or advise any consumer to make any statement or intended to effect, which is to alter the consumers identification to prevent the display of the consumers’ credit record, history, rating or purpose concealing adverse information or accurate to be obsolete.”
Okay, so what does this mean?
This means again, you are prohibited from making claims, guarantees, saying, “Hey this is what’s going to happen.
You know you’re going to get 300 points, everything’s off your credit report.”
You can’t make those claims. We have to stay within the law because there are too many people out there that are just willy nilly making up shit as they go.
Then you’re going to get hosed.
So stay within the laws.
This is the CROA act, which is governed by the bigger agencies, the Federal Trade Commission and I’m pro them because there are too many people out there screwing people.
You need to stay within laws and help people.
The idea of this video and the video series I do every day is to help you guys, to make sure you’re doing the right thing.
So that’s prohibited acts. We’re going to talk about findings and purpose and this is 1697.
1697, Findings and Purpose.
“The purpose of this subchapter to ensure that the prospective buyers of the services of the credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services and necessary to make protection from the public an unfair deceptive advertising and business practices by credit repair organizations.”
So you want to make sure that the people can make a decision with the information that you’ve very well informed them of what they’re getting into and that there is… the service is very spelled out.
So that’s the purpose of this.
The purpose of this video is so that way the client, that prospective client understands what they’re getting involved too.
When we talk about here in the contracts, this is where you guys want to pay attention because inside this contract you have to be very clear that when you sell credit repair, and I get it, guys, I know there’s a lot of people out there that don’t even have a contract for their clients, let alone spell out exactly what’s happening.
But let me share something with you.
Written contracts required.
This is coming out of 1679, the letter D. 1679D.
Credit Repair Organization Contracts.
“No services may be provided by any credit repair organization for any consumer unless a written and dated contract for the purpose of such services which meets the requirement of subsection has been signed by the consumer or before the end of the third business day, beginning of the date when it was signed.”
You don’t even have a contract together. When I start getting into the terms in a second, you guys, everybody has to sign a contract when they’re engaging into credit repair.
You guys are just saying, oh I can do credit repair for you.
No, it doesn’t work that way.
“Terms and condition of the contract.
No contract referred into subsection meets the requirement of the subsection unless the contract includes in writing the terms and conditions of payment, how much are they paying, including the total amount of payments to be made by the consumer to the credit repair organization or any other person.”
The total amount or the total amount of payments has to be in this contract.
“All guarantees of performance and estimated time of which the date the performance of services are going to be performed by the credit repair organization or any other person.”
So not only do you have to have in there that the payments, but you also have to have in there a reasonable time in which the services will be provided.
If it’s two to three months, if it’s two to three years, it has to be in the contract stating out the length of time to perform the services or else nobody knows.
They’re not going to get involved in something that doesn’t have a date.
Number one, you’re not falling in law, but number two, if there’s no date, there has no been reasonable expectations of when it’s going to be finished.
“Credit Repair Organizations named principal business address a conspicuous statement in boldface in immediate proximity to the space reserved for the consumer signature on the contract, which reads the following.
You may cancel the contract within three days.” Now, again, follow your state laws because here in the state of Florida, it’s five days, not three.
So just be careful with this. “You may cancel the contract without penalty or obligation anytime before midnight of the third business day after which you have signed the contract.”
So yours may be three, our is five. It’s that cool off period, it’s that period where people have the legal right to cancel any contract within that period.
So just again, follow your state laws there, but this is what is required to have by law.
Written contracts signed by both parties, the terms and conditions, when is it going to be finished and how much is it going to cost exactly has to be inside this contract.
Then you need to include in there where they signed that they can cancel at any point in time within that three or five day period, whatever your state requires there.
That all has to be in the contract. So this is why I’m helping you guys.
Then 1697 is also, it’s in general basically we’re talking about the contract, again. “
Any consumer may cancel the contract without penalty or obligation by notifying the credit repair organization of the consumer’s intent to do before midnight of the third business day.”
So somebody cancels in three days and you don’t want to give them their money back, that’s not legal.
So the reason I’m doing this is, and I’m going to share with you guys a lot of laws, this is just a few of them that I wanted to read here out of the CROA acts to making sure that each and every one of you guys, if you are performing credit repair services, that you make sure that you follow the law.
There were a lot of companies that are getting in trouble, one of the biggest credit repair organizations in the United States, if not the largest, it was under a lawsuit recently or may still be under the lawsuit because of things that they are doing and this is the largest in the state.
So we want to follow the rules, we want to do it the right way and we want to teach you guys that this is the way you need to do it. This is the rules you need to follow.
This is straight, what I just read here, again, I’m not an attorney so don’t take this as legal advice, but what I just read here is right off of the actual acts.
This is the actual acts that have to be done.
So if you follow these guidelines, you’re fine.
Follow the guidelines. It’s not illegal to do credit repair, but it is illegal not to follow what they are asking that has to be done from the credit repair organization, because if you are giving untruthful, unlawful advice or telling people this is going to happen or tell them this is going to happen, you’ve got to be careful with that.
So there are too many people being injured in credit repair to not have these laws.
I get why they’re putting the laws in place and we want to be an organization who follows the law.
People are going to appreciate you when you follow the law because you’re not showing as a scam.
You’re not showing as someone who’s just doing this out of the back seat of their car saying, “Oh I can do this, but here, don’t even sign a contract, just give me your money.”
First of all, that’s completely illegal.
I get it if you’re a one man show, but when you’re trying to scale and become a notable business, okay, some of you guys don’t even have business names.
We’re not even a business, we’re not even a legal business, we’re just a guy on the street saying I can sell credit repair.
So again, I implore you to go through, if you have any questions on this at all, what we do here is we follow the law.
Everything that I just shared with you and many, many laws we are following to make sure everything’s in the agreement and that our front end guys that are actually selling the services are making no false claims.
You can’t give them guarantees. You can’t tell them that this is going to happen.
You can’t tell him that… all that stuff right there is where you got to be safe and stay within the law.
So I want to read this to you guys. Then here’s the thing, I’m going to be reading a few more and again, I apologize for this not being the sexiest video that I normally do, tips and tricks and things you can do to raise your credit score.
What I can tell you is you need to follow this or you don’t have those.
So follow the acts, the CROA acts, okay?
The big players in the game that is above who govern the CROA acts, they want to see that people were following the law.
Get these in place, make sure that you go back through this video as many times you need.
If you have, again, I can say this over and over again, if you have questions on any of it, please let us know because we want to make sure that you guys are in compliance as well with the law.