The Bureau Protects Consumers from Credit Repair Scams
This week, the Consumer Financial Protection Bureau (CFPB) reached a settlement with a credit repair organization (CRO) conglomerate, which includes payment of $2.7 billion and a 10-year ban on telemarketing activities. The settlement comes after a court ruled that the defendants violated the Telemarketing Sales Rule (TSR).
AFSA commends the Bureau for this effort to hold these credit repair organizations to account for what amounts to nothing more than a scam. CROs lure consumers into a complex and expensive web of services they claim will boost credit scores, using such tactics as lodging hundreds of complaints with credit bureaus. This accomplishes nothing but to line the pockets of CROs with money from hardworking Americans while crowding the credit bureau’s reporting systems, making it more difficult to process legitimate claims.
“This scam is another sign that we must do more to fix the credit reporting and scoring system in our country,” CFPB Director Rohit Chopra noted in the CFPB’s press release.
We agree that this action is a good step forward in controlling the scourge of CROs.… but there is more to be done. AFSA is concerned that former employees of these companies will join or start smaller companies which will continue to defraud consumers, or that existing companies will explore ways to reach consumers without violating the Telemarketing Sales Rule. That’s why AFSA continues to work with Congress to pass legislation limiting credit repair scams.
August 29th, 2023 by Dan Bucherer