Credit repair organizations act
Encyclopedia
The Credit Repair Organizations Act ("CROA") is not actually an Act, it is actually Title IV of The Consumer Credit Protection Act
. Section 401 states, however, it can be referred to as "Credit Repair Organizations Act".
Now more than ever consumer
s must establish and maintain strong credit worthiness and standing in order to obtain more credit
. As a result many consumers who have experienced credit problems seek assistance from credit repair organizations. Some credit repair organizations, however, advertise and engage in unfair business practices
which result in financial hardship
for consumers, particularly those of limited economic means or are uneducated.
The purposes of the Credit Repair Organizations Act is to ensure that prospective buyer
s credit repair services from credit repair organizations are provided with the information necessary to make an informed decision. It intends to protect the public from unfair or deceptive advertising
and business practices by credit repair organizations. It enumerates prohibited practices, required disclosures, contract requirements, liability
, and penalties for non-compliance and procedure to report non-compliance. The statute was signed by the President on September 30, 1996.
Consumer Credit Protection Act
The Consumer Credit Protection Act, , composed of several titles relating to consumer credit, mainly title I, the Truth in Lending Act, title II related to extortionate credit transactions, title III related to restrictions on wage garnishment, and title IV related to the National Commission on...
. Section 401 states, however, it can be referred to as "Credit Repair Organizations Act".
Now more than ever consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
s must establish and maintain strong credit worthiness and standing in order to obtain more credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
. As a result many consumers who have experienced credit problems seek assistance from credit repair organizations. Some credit repair organizations, however, advertise and engage in unfair business practices
Unfair business practices
Unfair business practices encompass fraud, misrepresentation, and oppressive or unconscionable acts or practices by business, often against consumers and are prohibited by law in many countries. For instance, in the European Union, each member state must regulate unfair business practices in...
which result in financial hardship
Hardship
A hardship may mean:*hardship clause in contract law*undue hardship in employment law and other areas*extreme hardship in immigration law*hardship post in a foreign service*hardship in life...
for consumers, particularly those of limited economic means or are uneducated.
The purposes of the Credit Repair Organizations Act is to ensure that prospective buyer
Buyer
When someone gets characterised by their role as buyer of certain assets, the term "buyer" gets new meaning:A "buyer" or merchandiser is a person who purchases finished goods, typically for resale, for a firm, government, or organization...
s credit repair services from credit repair organizations are provided with the information necessary to make an informed decision. It intends to protect the public from unfair or deceptive advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
and business practices by credit repair organizations. It enumerates prohibited practices, required disclosures, contract requirements, liability
Liability
A liability can mean something that is a hindrance or puts an individual or group at a disadvantage, or something that someone is responsible for, or something that increases the chance of something occurring ....
, and penalties for non-compliance and procedure to report non-compliance. The statute was signed by the President on September 30, 1996.