Is a tradeline company subject to the credit repair organizations act CROA?
The CROA technically governs any business which uses items for credit repair.
Much debate has been made about the fact that article 404 of the CROA prohibit any fees to be collected up front before the credit has been restored.
There is certain ambiguity which seems to be directly centered around those who desire to charge for tradelines in advance and those who use a pay after results philosophy.
Tradeline companies argue that authorized tradelines are a product and can be sold as a product without falling under CROA regulatory guidelines.
The debate seems to center around whether authorized tradelines are marketed and sold as part of credit repair services.
Some companies who offer authorized user tradelines for sale list a guaranteed credit score increase which is without question prohibited under CRO rules.
It seems many of the companies who are operating under the concept that tradelines are not governed by the laws covering all credit repair appear to violate openly the rules which would apply.
For any company offering credit repair services all rules apply.
Key factors to understand are:
* CROA rules apply to any credit repair activity which is either sold or advertised for sale.
* Authorized user tradelines are sometimes viewed in the gray area of CROA guidelines.
* Charging upfront fees before results in CROA rules is a direct violation of section 404.
* All credit repair activities are limited to payment upon results to protect consumers.