Credit Repair Organizations Act (CROA)

The Credit Repair Organization acts as the governing body, supervising and keeping a check on the working of the credit repair agencies. US Congress passed the Act, keeping in mind the needs of customers when they run into problems. Having faith in these companies, the customers sometimes blindly give their money, not knowing the authenticity of the former.

As per the credit report law, it is the duty of credit report agencies is to provide information to the customer whenever needed. The portrayal of the company is sometimes deceptive, fooling the customer trust and give in their hard earned cash.

Prohibitions Of The Act

• As per the credit report law, the company cannot make statements about a customers credit report, without his or her consent. This could be misleading to potential lenders, if it’s untrue.
• As per the credit report law, the credit repair organization cannot charge or take any kind of financial consideration for the service they provide.
• It cannot misrepresent the information in the credit reports, which could affect future business transactions
• Safe-guarding against fraud or identity thefts
• As per the credit report law, the credit repair agencies cannot make deals on a customer’s behalf or in his or her absence. This can be done only after signing a legal contract with a 3-day time period.

Customer’s Rights Under This Act

• A copy of the Act should be obtained, which can be useful before striking deals with any organizations.
• Furnish information to the clients about the customers credit status and attach an eligibility statement.
• Contracts must specify terms, cost of service, description of deal, time duration and the personal details of the company

The Act can be very helpful and help in understanding the intricacies of credit report agencies, but there are some limitations to the Act. The removal of negative information like bankruptcy and unpaid judgments takes as long as seven years. Moreover, if a customer feels that his rights have been violated, the credit report agency can be sued within 5 years. It can be reported to the Federal Trade Commission, which monitors complaints and deals with the law violating companies. The primary object of the Act being to facilitate business deals, with all the given guidelines understanding and making profitable decisions can be an easier task.