Posts Tagged ‘The Profile of The Credit Repair Customer’

The Profile of The Credit Repair Customer

Posted by Joel pate in Credit Repair. Tagged: , , , , , , , , ,

Not all consumers are ready for the service of a Credit Repair Organization (CRO) and the sooner the owner of the company understands this critically important fact the better.



The Credit Repair Industry is regulated by the Federal Trade Commission via the Credit Repair Organizations Act (CROA) and the Telephone Sales Rule (TSR). Additionally, 24 states have passed additional laws that govern the industry for the protection of the most “ignorant” consumer that you might encounter.

According to Attorney Jean Noonan of the law firm Hudson Cook based in Washington DC, “the credit repair industry is more highly regulated than the nuclear power industry.” Of course she said this tongue in cheek but you get the point. Jean is a former head of the enforcement and prosecutorial of the Credit Repair division for the FTC and was instrumental, while at the FTC, in the passing of CROA. I am fortunate to count her as a friend and as my legal counsel.

I hope that by now you have a sense of the need for compliance when running a credit repair operation. But do not be disheartened. It is better to be in an industry in which laws already exist than when they do not. This creates a well-worn path to compliance. Bright lines of compliance if you will.

In this environment, a careful and continuous reading of the governing laws as well as past and current and future actions taken by both State Attorney Generals and the FTC provides clear and concise guidelines to establish the best practices of the industry as well as compliance documentation for your business. An additional potential regulator is the Consumer Financial Protection Bureau who at the time of the writing this document has not indicated that they too will regulate directly the credit repair industry.

So back to the fact that all consumers, even those with the ability to pay, should not be taken on as customers. Why? It’s simple. Even in the best-run organization, with clearly defined guidelines and constant and consistent training, every business will have a “bad compliance day”. Someone will violate the non-negotiable and company policy that you have established. You just don’t want it to be the day the regulator shops you because of a complaint from the customer that did not meet the guidelines in the first place. An unhappy customer, one that does not feel that they received a fair shake from you, can start an investigation that will eventually involve the regulators, either federal or state or both.

Part 2 coming next week.

PS: Join our weekly industry webinar series as we discuss the best practices to grow and increase the profit of your business. The Jump Start Business Building webinar is held each Thursday at 3 PM CST, so register now: