So what is this act all about? As you may be aware, the area of credit fixing has been the subject of controversy because some firms have abused consumer trust by promising to remove negative information from credit reports and failing to do so, after having charged these consumers exorbitant fees. After many complaints, the Federal government stepped in and set standards of conduct for companies in the credit repair industry.
The Credit Repair Organization Act forbids these operators from collecting fees from the consumer until the operator has fully performed the promised services. Further, operators must provide each customer a written contract detailing all of the services it will perform along with the terms and conditions of its fee arrangement. Lastly, potential customers have 3 days during which they can unilaterally rescind the contract without penalty.
Clearly, this is powerful information in the hands of consumers. If you choose to engage a credit rebuilding firm, knowing the provisions of this law allows you to spot firms that are not in compliance and protect your interests accordingly. Firms that do comply make a clear statement of their intent to provide services that are more honest and transparent. Firms that are not in compliance with this law should be avoided at all costs.