AFSA White Paper Tackles CROs
On Friday, October 1 AFSA’s State Government Affairs (SGA) team published their October White Paper covering credit repair organizations. Credit repair organizations claim to seek to improve a consumer’s credit score by having negative information removed from a consumer’s credit report. However, improving credit takes time and commitment to a repayment plan—there is no quick fix for bad credit—so many credit repair organizations use aggressive marketing tactics that intentionally mislead consumers with overblown claims regarding their ability to improve a consumer’s credit score. While it is legal to dispute and remove inaccurate information, credit reporting agencies cannot remove accurate information that negatively affects a person’s credit score.
The credit repair industry is regulated by the federal Credit Repair Organizations Act and the Fair Credit Reporting Act, as well as laws in 38 states and the District of Columbia, but many credit repair organizations still engage in unethical and illegal practices, such as trying to have accurate credit information removed. The white paper describes some of the other harmful practices, including falsifying identity theft claims and overwhelming furnishers with baseless requests. The white paper also describes recent lawsuits state and federal regulators have filed against credit repair organizations.
The white paper was released in conjunction with AFSA’s new survey of state credit repair laws. The paper is also available under the State Resources section of AFSA’s website.
October 13th, 2021
