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Credit Repair Business Laws and Practices Overview

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For over 10 years, First Card Payments has provided high risk merchant accounts for credit repair businesses. In all that time we have become quite accustomed to credit repair business laws.

Like most high risk businesses, the credit repair industry governed by a strict set of laws and guidelines associated with consumer protection. That’s the reason credit repair businesses require high risk merchant accounts.


The Laws That Govern the Credit Repair Industry

As a credit repair agency, it is very important for you to know certain laws that govern the business. Violation of these laws would lead to a big loss and eventually to the complete death of your company. There are numerous laws that protect the consumer’s rights in the credit repair business, they are:

Credit Repair Organizations Act (CROA): This act was grafted in 1996 to protect the public from businesses that charge them money and give fake and empty promises. It requires businesses offering credit repair services to advertise and offer honest information to customers. CROA is also responsible for defending the consumer against businesses that seek to improve low credit scores which are dependent on correct information.

The Law mandates that:

  • You must not misrepresent your services. This means that you should not claim falsely what you would do for a client without doing it.
  • You must have a written contract that is signed by the client. Your client have three days to cancel the contract.
  • You are not allowed to charge when you have not rendered any service. Usually, you can first do some document processing and go ahead to charge the client for the work you have done.
  • If you are found to have violated any of the CROA rules as a credit repair agency, you can be sued and this will lead to consumer having a refund of all the money paid.

CROA laws are federal and cannot be changed by state laws.

The Federal Trade Commission (FTC): This is a bipartisan federal agency, their goal is consumer protection and competition promotion. FCT is an independent agency set up by the United States government and its sole purpose is not only to protect the consumer but also to encourage strong competition. This is achieved by enforcing consumer protection and antitrust laws. FTC disallows companies from carrying out anti-competitive and misleading business practices

Fair Credit Reporting Act (FCRA): This is an American organization that fosters the accuracy, fairness, and privacy for all data used by consumer reporting agencies.

umer Financial Protection Bureau (CFPB): CFPB gives a single point of accountability for enforcing federal consumer financial laws. They are also responsible for protecting consumers in the commercial marketplace.

Fair Debt Collection Practices Act (FDCPA): This is a section/ subsection of the consumer credit protection act. FDCPA is a body set up to ensure fair treatment in the collection of customer debts and also to provide a way for clarifying debt information to ensure its validity.

The Equal Credit Opportunity Act (ECOA): This law do not allow lenders to discriminate against either people or businesses based on none financial terms. This law protects the consumer’s interest.


In the United States, there is no requirement for a credit repair license before you can operate a credit repair business. What you should get are training and certification. These would help to show your level of competence to your prospective clients and also help you gain the consumer’s trust. Training will teach you all you need to know about helping a client to grow a recurring revenue model.

( Merchant Account Specialist )

Mitchell Fardell is a highly experienced payment processor who has worked for First Card Payments since 2019. In that time, he has worked on large accounts, small accounts, and everything in between.

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