Representatives Wiley Nickel and Young Kim have introduced the "Ending Credit Repair Scams Act" (HR 9991), a bipartisan effort aimed at protecting consumers from deceptive credit repair organizations. These organizations often promise to improve credit history while charging high fees without delivering results.
The American Financial Services Association (AFSA) and other advocacy groups support this legislation, which seeks to combat fraudulent practices in the credit repair industry. The bill targets organizations that exploit consumers by charging excessive fees without fulfilling promises to enhance credit scores. It aims to strengthen regulations for transparency and accountability within 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.
Andrew Pizor, senior attorney at the National Consumer Law Center (NCLC), commented, "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."
Edward Boltz, Legislative Chair of the National Association of Consumer Bankruptcy Attorneys (NACBA), emphasized that HR 9991 will prevent misleading schemes while allowing honest attorneys to assist with legitimate credit report errors.
The act empowers consumers by ensuring payment to CROs only after documented improvements to credit reports. It also increases civil penalties for violations and prohibits CROs from overwhelming financial institutions with repetitive requests, which can hinder addressing legitimate issues. Representative Nickel's initiative aims to protect Americans from predatory schemes and secure their financial well-being.