AFSA Supports Congressional Action on Credit Repair Scams
Yesterday, Representatives Wiley Nickel (D-NC) and Young Kim (R-CA) introduced the bipartisan “Ending Credit Repair Scams Act” (HR 9991). This bipartisan legislation would protect financially distressed consumers from shady credit repair organizations (CROs) that falsely promise to rebuild their credit history while charging expensive up-front and monthly fees.
The American Financial Services Association (AFSA) and other consumer-focused financial services advocacy organizations support this bipartisan legislation. The bill would combat fraudulent practices in the credit repair industry, targeting credit repair organizations (CROs) that exploit consumers by charging high fees without delivering on promises to improve credit scores, and strengthen regulations to ensure transparency and accountability in the industry.
“Financial-services companies and consumer advocacy groups are grateful for congressional action on behalf of consumers, having seen first-hand the real harm credit repair organizations cause consumers, often charging hundreds of dollars a month, but yielding few if any positive results,” said AFSA President and CEO Bill Himpler.
“Paying for credit repair is usually a waste of money. This bill will ensure that consumers are not charged until they get what they’re paying for,” said Andrew Pizor, senior attorney at the National Consumer Law Center (NCLC).
Edward Boltz, the Legislative Chair of the National Association of Consumer Bankruptcy Attorneys (NACBA), whose members represent people in and after bankruptcy, agreed that the “Ending Credit Repair Scams Act” HR 9991 will stop credit repair jamming schemes that mislead consumers by holding themselves out as “lawyers,” but “will also now make it clear that honest attorneys can provide advice and assistance to those who need real help with credit report errors.”
The bipartisan “Ending Scam Credit Repair Act: empowers consumers by ensuring that CROs only receive payment after delivering documented improvements to credit reports, while increasing civil penalties for violations. The bill also prohibits CROs from “jamming” financial institutions with duplicative requests, preventing consumer reporting agencies and data furnishers from addressing legitimate credit report issues. With this bill, Rep. Nickel is taking a stand to protect Americans from predatory credit repair schemes and safeguard their financial futures.
October 16th, 2024
