The Ending Scam Credit Repair Act (ESCRA Act) is a bill that tightens the Credit Repair Organizations Act (CROA) by expanding who is covered, increasing accountability, and enhancing protections for consumers against deceptive credit repair practices. Key changes include a broader definition of who is a “credit repair organization” (to include certain attorneys working with CROs), prohibiting upfront fees until proven results are demonstrated by a consumer report, expanding enforcement reach to the Bureau of Consumer Financial Protection (BCFP) and the Federal Trade Commission (FTC), and requiring more transparent disclosures and communications with furnishers (the entities that provide information to credit bureaus). The bill also adds licensing requirements for CROs at the state level starting in 2026, clarifies consumer contract disclosures, creates new rules for disputes with furnishers, and establishes a per-violation damages regime. Taken together, these provisions aim to curb “scam” credit repair activities, reduce abusive practices, and improve consumer protection and enforcement.
Key Points
- 1Expanded CRO definition and coverage: The act broadens who is considered a credit repair organization, including certain attorneys and other entities working with consumers in organized credit repair efforts, making more players subject to CROA rules.
- 2Prohibited practices and enforcement channels: CROA would require that statements be made knowingly, and it adds that enforcement portals (BCFP, FTC, and applicable law enforcement) can receive complaints. This strengthens avenues for reporting and pursuing deceptive conduct.
- 3Payment in advance ban with demonstrated results: CROs may not take payment for services aimed at removing or improving derogatory information until the consumer receives a consumer report (issued at least 6 months after service) showing the stated improvement. This links payment to verifiable results and helps prevent upfront fees for nonperformance.
- 4Jamming and dispute process safeguards: The bill sets stricter rules against “jamming” (re-submitting disputes without adequate basis) and requires proper investigation time, return of investigation results to the consumer, and a description of what information is claimed to be inaccurate when disputes are refiled.
- 5Disclosures, contracts, and communications with furnishers: The act expands required disclosures to consumers and furnishers, adds specific labeling on dispute communications, requires copies of all communications sent on behalf of the consumer, and mandates certain information (including license numbers) in dispute submissions to furnishers. It also requires timely written responses from CROs in certain exchanges and strengthens recordkeeping around communications.
- 6Licensing and noncompliance: A new section requires that, starting January 1, 2026, no person may act as a CRO without a state license, creating a pathway for state-level regulation and enforcement. The bill also clarifies CROA applies even when an attorney within the organization provides services, with an exception for certain designated lawyers.
- 7Civil liability: The damages provision expands potential relief from “actual damages” to allow up to $500 in damages per violation of CROA, increasing the financial risk for violations.