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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 9858
Experience:  30 years of corporate, litigation and international law
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What are the laws to marketing and selling "credit

Customer Question

What are the laws to marketing and selling "credit repair" services? Is it allowed to charge money up front and is there a cap on how much you can charge a customer?
Submitted: 9 months ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 9 months ago.

Hello, my name is ***** ***** I will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for.

In FL you do not need a license. Unless you post a surety bond of $10,000 and open a trust account in a bank you cannot be paid for credit repair services until you have completed providing all the services. Statute(###) ###-####1). Before you can sign an agreement (which must be in writing) to provide services to a customer you must provide the customer with an information statement that includes the following:

(1)(a) A complete and accurate statement of the buyer's right to review any file on the buyer maintained by any consumer reporting agency, as provided under the Federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681t;

(b) A statement that the buyer may review his or her consumer reporting agency file at no charge if a request is made to the consumer reporting agency within 30 days after receiving notice that credit has been denied; and

(c) The approximate price the buyer will be charged by the consumer reporting agency to review his or her consumer reporting agency file.

(2) A complete and accurate statement of the buyer's right to dispute directly with a consumer reporting agency the completeness or accuracy of any item contained in any file on the buyer maintained by the consumer reporting agency.

(3) A statement that accurate information cannot be permanently removed from the file of a consumer reporting agency.

(4) A complete and detailed description of the service to be performed by the credit service organization for the buyer and the total amount the buyer will have to pay, or become obligated to pay, for the services.

(5) A statement notifying the buyer of his or her right to proceed against the bond or trust account required under s.(###) ###-####

(6) The name and address of the surety company which issued the bond, or the name and address of the depository and the trustee and the account number of the trust account.

Section 817.704 sets forth what must be in the written contract with the customer. Below is the link to the relevant statutes that govern your activities in FL as a credit service organization.

http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0800-0899/0817/0817PartIIIContentsIndex.html&StatuteYear=2015&Title=-%3E2015-%3EChapter%20817-%3EPart%20III

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Customer: replied 9 months ago.
What is the penalty for charging fees up front? And what other states is this illegal in? Is it a violation, misdemeanor, or felony? What class? There are tons of companies online that charge fees...if it's illegal how is this possible?
Expert:  Richard - Bizlaw replied 9 months ago.

The requirements vary from state to state. Some states do not permit for profit credit repair services at all. You can charge the fee in FL but you must post the bond first in FL. Once you post the bond and open the trust account. Violation of the section is punishable as a third degree felonly which includes imprisonment for up to 5 years.

If I have answered all your questions, please positively rate my answer as that is how I receive credit. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.

Expert:  Richard - Bizlaw replied 9 months ago.

I sent you an answer five days ago but have had no response. If you have any additional questions please let me know. If I have answered all your questions, please highly rate my answer as that is how I get credit for answering your questions.

Customer: replied 9 months ago.
What about other states like New York? or Wisconsin? What is the laws there, is it legal or illegal to charge a fee up front? Are there any federal laws making it illegal nationwide if it crosses state lines?
Expert:  Richard - Bizlaw replied 9 months ago.

Other states are beyond the scope of the original question. If you want other states reviewed, let me know which ones and I can do the research as an additional service. Once I know what additional states you want reviewed, I can quote you an offer price.

If I have answered your question related to the original question you posted, please highly rate my answer as that is how I get credit for working on your answer. Your rating of the answer will not prevent us from continuing to communicate on this thread about the other states in which you are interested or prevent me from offering the additional service.

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