What is CROA and how are authorized user tradelines affected by it?
President Bill Clinton signed the Credit Repair Organizations Act in 1996. The purpose of the legislation was to protect consumers against false statements and to overcharge for credit repair services.
Focusing on the undereducated and lower income clients who were being targeted by questionable ethical practices and outrageous charges for services which often were nothing more than a scam was common practice during the 1990’s.
The regulations outlined specific items of not being charged huge upfront fees for credit services or unusually high fees in the form of account maintenance costs.
Specific credit score increases were no longer able to be advertised, and the majority of the costs of credit repair was shifted to pay after delete results-based invoicing.
Any credit repair service could no longer use 50 points or 100 points guaranteed as examples of baiting in those who were undereducated and could not understand the claims falsehood.
CROA protection is designed to cover all aspects of targeting by companies of the two clearly defined groups which comprise a majority of clients from previous decades.
Key factors to understand are:
* The CROA is legislation which was passed during the 90’s to eliminate predatory credit repair practices.
* Guidelines are geared toward protecting the under-educated and financially challenged individuals specifically.
* No longer could companies advertise an exact number to credit score improvement to sell their services.
* Most fees and expenses were required at the end based on results rather than hollow promises.