ESCRA Act

This bill, called the Ending Scam Credit Repair Act, tightens rules on credit repair companies to protect people from misleading or abusive practices. It bans knowingly false statements about someone’s credit not just to credit bureaus or lenders, but also to the Consumer Financial Protection Bureau, the Federal Trade Commission, and law enforcement. It also stops companies from charging fees until they can prove results, and that proof must come at least six months after the service. Companies must keep better records, share copies of all letters they send for you, and hold onto call recordings and files longer. They must be licensed by a state, can’t flood agencies with repeat disputes on the same issue, and face a minimum $500 penalty per violation.

Key points

• Who is affected: People who use credit repair services and the credit repair companies themselves.
• What changes: No upfront fees; proof of success required after six months; more disclosures; copies of all communications; call recordings and records kept five years; state licensing required; limits on repeat disputes; minimum $500 damages per violation; bans knowingly false statements to CFPB, FTC, and law enforcement.
• When: The provided documents do not specify an effective date.