Credit Repair Organizations

C. sec. Credit Repair Organizations Act (CROA).

Titles 1679 et seq. (Title IV of the Law on the Protection of Credits of Consumers). After most of the other circuit cases, the Ninth Circuit concluded that a simple assurance that one can or will be able to offer, supply or deliver a product or services to advise a customer on how to improve a consumer's creditworthiness, credit histories or creditworthiness will lead to becoming a CROA credit repair company.

As to the lesson to be learnt from this case, credit bureaus and others should diligently examine and process all claims made on web sites and in ads and advertising material to make sure that they cannot be interpreted as likely to enhance or advise or assist in enhancing consumer information, stories or values.

Ability to arbitrate under the Credit Repair Enterprise Act

Recently, the Supreme Courts hear verbal arguments in CompuCredit Corp. v. Greenwood, U.S. No. 10-948, and will determine whether Credit Repair Organizations Act ("CROA"), 15 U.S.C. Sections 1679 et sqq., awards are arbitrable under the Act's wording, provided that customers have a "right to bring a credit repair claim" and that consumer renunciations "may not be asserted by any federal or state tribunal or any other individual.

This case includes sub-prime credit card transactions that were supposedly sold as a credit enhancement opportunity. Prior to receipt of the tickets, the consumer was provided with a receipt containing a compulsory collective disclaimer agreement. However, the tribunal ruled that the referral provision under the CROA was void, and the Ninth Circle confirmed and created a pipe splitting.

Cf. Gay v. CreditInform, 511 F.3d 369 (3d Cir. 2007); Picard v. Credit Solutions Inc., 564 F.3d 1249 (11 Cir. 2009). But the question that the court will rule is what kind of wording the Congress must use in a law to point out that legal rights cannot be enforced under the FAA.