Credit Repair

Required State License(s): While in the past a license was required for a Credit Service/Credit Repair Organization, under Public Act No. 160 of 1994, a license is no longer required. Under PA 160, a Credit Services Organization is defined as "a person who, in return for consideration, attempts to sell, provide, or perform 1 or more of the following: (i) The improvement of a person's credit record, history, or rating. (ii) The obtainment of an extension of credit. (iii) Advice or assistance regarding the improvement or repair of a person's credit record, history, or rating. (iv) Advice or assistance regarding the obtainment of an extension of credit. (v) Advice or assistance regarding foreclosure of a real estate mortgage. (vi) Serve as an intermediate between a debtor and a creditor on behalf of the debtor regarding credit that was extended prior to any agreement to have the credit services organization serve as an intermediate." Sec. 3 of PA 160 states the following: "A credit service organization, salesperson, agent, or representative of a credit services organization, or an independent contractor who sells or attempts to sell the services of a credit services organization shall not do any of the following: (a) Charge or receive from a buyer who is seeking a loan or extension of credit any money or other valuable consideration before the closing of the loan or extension of credit. (b) Charge a buyer or receive from a buyer of services money or other valuable consideration before completing performance of all services the credit services organization has agreed to perform for the buyer. (c) Charge a buyer or receive from a buyer money or other valuable consideration solely for referral to a retail seller who will or may extend credit to the buyer if the credit that is or may be extended to the buyer is substantially the same as that available to the general public. (d) Make or use a false or misleading representation in the offer or sale of the services of a credit services organization. (e) Engage, directly, or indirectly, in a fraudulent of deceptive act, practice, or course of business in connection with the offer or sale of the services of a credit services organization including, but not limited to, both of the following: (i) Guaranteeing or otherwise stating that the organization is able to delete an adverse credit history unless the representation clearly discloses, in a manner equally as conspicuous as the guarantee, that this can be done only if the credit history is inaccurate or obsolete and is not claimed to be accurate by the creditor who submitted the information. (ii) Guaranteeing or otherwise stating that the organization is able to obtain an extension of credit regardless of the buyer's previous credit problems history unless the representation clearly discloses, in a manner equally as conspicuous as the guarantee, the eligibility requirements for obtaining an extension of credit. (f) Fail to perform the agreed services within 90 days following the date the buyer signs the contract for services. (g) Counsel or advise a buyer to make a statement that is known, or should be known, to be untrue or misleading to a consumer credit reporting agency, a person who has extended credit to a buyer, or to a person to whom the buyer is apply for an extension of credit. (h) Remove, assist, or advise the buyer to remove adverse information from the buyer's credit record which is accurate and not obsolete. (i) Create, assist, or advise the buyer to create a new credit record by using a different name, address, social security number, or employer identification number. (j) Submit a buyer's dispute to a consumer credit reporting agency without the buyer's knowledge. (k) Provide a service to a buyer that is not pursuant to a written contract that complies with this section." Please note that under PA 160 the Attorney General, County Prosecutor, or a Buyer may file legal action against incorrect procedures used. A person who violates this act would be guilty of a misdemeanor. Revised 10/94