Section 1 Short title
This Act may be cited as the “Ending Scam Credit Repair Act” or the “ESCRA Act”.
Ending Scam Credit Repair Act
A BILL
To amend the Credit Repair Organizations Act to add additional protections against harmful practices within the credit repair organization industry, and for other purposes.
Sec. 2 Credit Repair Organization definition
Section 403(3) of the Credit Repair Organizations Act (15 U.S.C. 1679a(3))—
in subparagraph (A), by inserting “(not including anything received in return for representing a consumer in preparation for or during litigation)” after “consideration”; and
in subparagraph (B)—
by inserting “an entity or individual that is, in good faith and not for the purpose of evading this title” after “include”;
in clause (ii), by striking “or”;
in clause (iii), by striking the period and inserting “; or”; and
by adding at the end the following:
“(iv) any attorney that provides legal services rendered or to be rendered to a consumer in contemplation of or in connection with a case filed, or to be filed within 12 months, under title 11 or title 15, United States Code, by an attorney within the same law firm.”
Sec. 3 Prohibited practices
Untrue or misleading statements—
In general— Section 404(a)(1) of the Credit Repair Organizations Act (15 U.S.C. 1679b(a)(1)) is amended—
by inserting “knowingly” before “make any statement, or”;
in subparagraph (A), by striking “or ”; and
by adding at the end the following:
“(C) the Bureau of Consumer Financial Protection directly or through an online portal established to receive complaints, disputes, or reports of fraud;
“(D) the Federal Trade Commission directly or through an online portal established to receive complaints, disputes, or reports of fraud; or
“(E) any Federal, State, local, or Tribal law enforcement agency, directly or through an online portal established to receive complaints, disputes, or reports of fraud;”
Finding— The Congress finds that it is already unlawful to make materially false, fictitious, or fraudulent statements or representations to the Bureau of Consumer Financial Protection.
Additional prohibited practices— Section 404 of the Credit Repair Organizations Act (15 U.S.C. 1679b) is amended—
in subsection (a)(2)—
in subparagraph (B)(ii), by inserting “or” after “credit;”; and
by adding at the end the following:
“(C) the Bureau of Consumer Financial Protection or the Federal Trade Commission;”
by amending subsection (b) to read as follows:
“(b) Payment in Advance
“(1) In general—No credit repair organization may request or receive payment of any fee or consideration from a consumer for services represented to remove derogatory or inaccurate information from, or improve, such consumer's credit history, credit record, or credit rating, or services related to such a representation, until the credit repair organization has provided such consumer with documentation in the form of a consumer report, issued not less than 6 months after such service, from a consumer reporting agency that demonstrates that such representation has been achieved.
“(2) Rule of construction—Nothing in this subsection shall be construed to alter the permissible purposes of furnishing a consumer report described in section 604 of the Fair Credit Reporting Act.”
by adding at the end the following:
“(c) Jamming—A credit repair organization may not submit multiple disputes described in section 611 of the Fair Credit Reporting Act of the same information unless all of the following are true:
“(1) The consumer reporting agency or data furnisher has had the time permitted under the Fair Credit Reporting Act to conduct a reasonable investigation on the prior dispute.
“(2) The consumer reporting agency or data furnisher has returned the results of its investigation to the consumer with respect to such dispute, unless there are material changes to the information submitted with the dispute.
“(3) The credit repair organization includes with the resubmitted dispute a specific description of what information is inaccurate.”
Sec. 4 Disclosures
Section 405 of the Credit Repair Organizations Act (15 U.S.C. 1679c) is amended—
in subsection (a)—
by striking “due to fraud.” and inserting “due to fraud. Credit repair organizations do not provide any services that you cannot do yourself for free.”;
by striking “regulates” and inserting “and the Bureau of Consumer Financial Protection regulate”; and
by inserting “The Bureau of Consumer Financial Protection 1700 G St. NW, Washington, DC, 20552 Tel: 855–411–2372 TTY/TTD: 855–729–2372” after “20580”; and
in subsection (c)—
in paragraph (1), by striking the period at the end and inserting “and any recordings of telephone communications with the consumer.”; and
in paragraph (2)—
by striking “2” in the heading and inserting “5”;
by inserting “and any telephone recordings with the consumer” after “consumer’s statement”;
by striking “2” and inserting “5”; and
by striking “statement is signed by the consumer” and inserting “statement or the telephone recordings are created”.
Sec. 5 Consumer contract required
In general— Section 407(c) of the Credit Repair Organizations Act (15 U.S.C. 1679e(c)) is amended by adding at the end the following:
“(3) copies of all communications sent on behalf of the consumer, at the time the communication is sent.”
Technical amendment— Section 407(c) of the Credit Repair Organizations Act (15 U.S.C. 1679e(c)) is amended—
by striking “at the time the contract or the other document is signed.”;
in paragraph (1), by striking “; and” inserting “, at the time the contract or the other document is signed;”; and
in paragraph (2), by adding at the end “at the time the contract or the other document is signed; and”.
Sec. 6 Noncompliance
Section 408 of the Credit Repair Organizations Act (15 U.S.C. 1679f) is amended by adding at the end following:
“(d) Legal services within credit repair organizations—A credit repair organization shall be subject to this title regardless of whether the organization is, or employs, an attorney who also provides legal services to a consumer, except if such attorney is an attorney described in section 403(3)(B)(iv).
“(e) Credit repair organizations without a State license—On or after January 1, 2026, no person may act as a credit repair organization unless such person is licensed by a State.”
Sec. 7 Credit repair organization communications with furnishers of information
In general— The Credit Repair Organizations Act (15 U.S.C. 1679 et seq.) is amended by inserting after section 408 the following new section:
“408A. Credit repair organization communications with furnishers of information
“Disputes submitted to a person who furnishes information to a consumer reporting agency by or on behalf of a credit repair organization shall meet the following requirements:
“(1) If sent by mail, the dispute shall be transmitted by first class mail and list on the envelope the—
“(A) name of the credit repair organization; and
“(B) State license number of the credit repair organization, if applicable.
“(2) The dispute shall list the—
“(A) name of the credit repair organization;
“(B) State license number of the credit repair organization, if applicable; and
“(C) name of the consumer on whose behalf the dispute is submitted.
“(3) In the case of any additional communication after an initial dispute, the additional communication shall clearly and conspicuously identify any material changes to the information provided in the initial written dispute and include the information described in paragraphs (1) and (2).
“(4) In the case where a credit repair organization sells or otherwise provides an online or paper blank dispute form to be completed and filed by the consumer, such form must contain the—
“(A) name and address of such credit repair organization; and
“(B) State license number of such credit repair organization, if applicable.
“(5) In the case where the person responds to a dispute submitted by a credit repair organization seeking clarifying information, verifying if the customer has actually engaged with the credit repair organization, or denying the accuracy of the underlying claim, the credit repair organization shall respond in writing within 15 business days.
“(6) In the case where the credit repair organization is an attorney, the attorney shall certify that any communication is consistent with any information or documentation provided by the consumer, confirmed based upon methods or means proven to be historically reliable and accurate.
“(7) A credit repair organization, when sending a dispute, shall disclose the fact that it is a credit repair organization by placing the following disclosure on the dispute letter: “This communication was submitted or prepared on behalf of the consumer by a credit repair organization, as defined in section 403 of the Credit Repair Organizations Act (15 U.S.C. 1679a).””
Clerical amendment— The table of contents for the Credit Repair Organizations Act is amended by inserting after the item relating to section 408 the following:
Sec. 8 Civil liability
Section 409(a)(1) of the Credit Repair Organizations Act (15 U.S.C. 1679g(a)(1)) is amended—
by striking “Actual damages” and inserting “Damages”;
in subparagraph (A), by striking “or”;
in subparagraph (B), by striking the period at the end and inserting “; or”; and
by adding at the end the following:
“(C) the amount of $500 in damages for each violation of this title.”