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ESCRA Act
2/6/2025, 3:08 AM
Summary of Bill HR 306
The proposed amendments to the Credit Repair Organizations Act include provisions that would require credit repair organizations to provide clear and accurate information to consumers about the services they offer, the fees they charge, and the potential outcomes of their services. Additionally, the bill would prohibit credit repair organizations from engaging in deceptive or unfair practices, such as making false promises or misrepresenting their ability to improve a consumer's credit score.
Furthermore, the bill would establish new requirements for credit repair organizations to ensure that they are operating in a transparent and ethical manner. This includes implementing procedures to verify the accuracy of the information they provide to credit reporting agencies and maintaining records of their interactions with consumers. Overall, Bill 119 HR 306 aims to strengthen consumer protections within the credit repair organization industry and promote greater transparency and accountability among service providers. By addressing harmful practices and promoting ethical behavior, the bill seeks to empower consumers to make informed decisions about their credit repair options and protect them from potential scams or fraudulent activities.
Congressional Summary of HR 306
Ending Scam Credit Repair Act or the ESCRA Act
This bill revises the Credit Repair Organizations Act and creates additional requirements for credit repair organizations (CROs).
Under current law, it is illegal for a person (including a CRO) to make false or misleading statements regarding a consumer’s creditworthiness or standing to a consumer reporting agency or to a consumer credit provider. The bill additionally prohibits making such statements to the Consumer Financial Protection Bureau, the Federal Trade Commission, or law enforcement. To be subject to this prohibition, the bill also requires such statements to be made knowingly.
The bill also revises CRO obligations to consumers. A CRO is prohibited from charging a consumer for a service (e.g., getting inaccurate information removed from a credit report) until the CRO provides proof of success not less than six months after providing the service. The bill also requires additional disclosures to consumers, requires the retention of any recorded telephone calls, and increases the time records must be retained from two to five years. In addition, consumers must be given copies of all communications sent on their behalf.
Under the bill, all persons must be licensed by a state to act as a CRO. The bill also restricts a CRO’s ability to submit multiple credit disputes regarding the same information.
The bill also sets a minimum liability amount for damages of $500 for each violation of the Credit Repair Organizations Act.
