15 USC § 1679 — Findings and Purposes
(a) Findings. Congress identifies that consumers need to maintain creditworthiness to obtain credit, and some companies offering credit repair services have created financial hardship, especially for economically disadvantaged and inexperienced consumers.
(b) Purposes. This legislation aims to inform prospective buyers about credit repair services and shield the public from deceptive practices.
15 USC § 1679a — Definitions
Consumer means an individual.
Consumer credit transaction refers to credit extended to an individual for personal, family, or household purposes.
Credit repair organization encompasses entities using interstate commerce or mail to sell services for improving credit records, history, or ratings — excluding nonprofits under 501(c)(3), creditors restructuring their own debts, depository institutions, and credit unions.
Credit carries the meaning from section 1602(e).
15 USC § 1679b — Prohibited Practices
(a) In general. No person may:
- Make untrue or misleading statements to credit bureaus or creditors regarding consumer creditworthiness or credit capacity;
- Advise altering identification to conceal accurate, non-obsolete adverse information;
- Misrepresent services offered; or
- Engage in fraudulent or deceptive practices regarding service offerings.
(b) Payment in advance. Credit repair organizations cannot charge or receive payment before fully performing agreed services.
15 USC § 1679c — Disclosures
(a) Disclosure required. Organizations must provide written statements before contract execution, including:
- Consumer rights to dispute inaccurate credit information
- Rights regarding accurate information removal (7-year limit; 10 years for bankruptcy)
- Access to credit reports and interpretation assistance
- Right to cancel within 3 business days
- Information about credit bureau procedures
- Federal Trade Commission contact details
(b) Separate statement requirement. The disclosure must be a separate document from contracts or other materials.
(c) Retention of compliance records. Organizations must maintain signed acknowledgments for 2 years.
15 USC § 1679d — Credit Repair Organization Contracts
(a) Written contracts required. Services require signed, dated contracts before any performance begins, with a 3-business-day waiting period.
(b) Terms and conditions. Contracts must include:
- Payment terms and total amounts
- Detailed service descriptions with performance guarantees
- Completion timelines or service duration estimates
- Organization name and principal business address
- Bold-faced cancellation notice with required language
15 USC § 1679e — Cancellation Rights
(a) In general. Consumers may cancel contracts without penalty before midnight of the 3rd business day after signing.
(b) Cancellation form. Contracts must include duplicate cancellation forms with specific required language detailing cancellation procedures and deadlines.
(c) Consumer copy of contract required. Organizations must provide consumers with completed contracts, disclosures, and all required documents at signing.
15 USC § 1679f — Consumer Waivers
(a) Consumer waivers invalid. Any waiver of protections under this legislation is void and unenforceable.
(b) Attempt to obtain waiver. Attempting to secure consumer waivers violates this legislation.
(c) Contracts not in compliance. Non-compliant contracts are void and unenforceable.
15 USC § 1679g — Liability
(a) Liability established. Violators face liability for:
- Actual damages or amounts paid to the organization (whichever is greater)
- Punitive damages (individual discretion or class action aggregates)
- Attorney fees and court costs from successful actions
(b) Factors in awarding punitive damages. Courts consider violation frequency, persistence, nature, intentionality, and affected consumer numbers.
15 USC § 1679h — Enforcement
(a) In general. Federal Trade Commission enforces compliance requirements.
(b) Violations treated as FTC Act violations. Breaches constitute unfair or deceptive commerce practices.
(c) State action for violations. States may seek injunctions, recover resident damages, and receive costs and attorney fees from successful actions.
15 USC § 1679i — Statute of Limitations
Actions must be filed before the later of: 5 years from violation occurrence, or 5 years from consumer discovery of material misrepresentation.
15 USC § 1679j — Relation to State Law
This legislation does not exempt anyone from state law compliance except where inconsistent provisions exist.