New bill would force credit-repair firms to prove results before getting paid

A new proposal in Congress called the Ending Scam Credit Repair Act (ESCRA) would make credit-repair companies wait to get paid until they can show documented proof that they actually improved a customer’s credit, at least six months after providing the service. The goal is to curb scams where firms charge upfront fees without delivering real results.​

What the bill would do

• ESCRA would amend the existing Credit Repair Organizations Act to add stricter rules for credit-repair companies.​

• Companies could not charge consumers until they provide proof of successful credit improvements, and that proof must cover results that are at least six months old.​

New protections for consumers

• The bill sets a minimum damages amount of $\$500$ per violation, giving consumers clearer remedies if a company breaks the law.​

• It would also require more disclosures, give consumers copies of all communications sent in their name, and make companies keep records and recorded calls for five years instead of two.​

Limits on deceptive practices

• ESCRA would make it illegal for anyone, including credit-repair firms, to knowingly make false or misleading statements about a consumer’s credit standing to credit bureaus, lenders, regulators, or law enforcement.​

• It would also limit repeated, duplicative credit disputes over the same item, which some repair outfits use to game the system rather than fix legitimate errors.​

Licensing and oversight

• The bill would require anyone acting as a credit-repair organization to be licensed under state law, adding another layer of oversight.​

• These changes build on recent enforcement actions where regulators forced major credit-repair brands to refund illegal advance fees and highlighted the risks of paying for “quick fix” credit services upfront.

ESCRA would significantly strengthen consumers’ legal rights by delaying when credit-repair firms can get paid, increasing statutory damages, expanding transparency, and tightening rules against deceptive tactics. It amends the existing Credit Repair Organizations Act (CROA) to give consumers more leverage before, during, and after they use a credit-repair service.​

Stronger right to results before payment

• Credit repair organizations could not charge you until they provide documented proof of successful credit repair that is at least six months old, rather than collecting large upfront or early fees.​

• This gives you the right to see actual improvement on your credit report before owing money, reducing the risk of paying for empty promises.​

Higher damages and clearer remedies

• ESCRA sets a minimum liability of $\$500$ in damages for each violation of CROA, giving consumers a clearer floor for what they can seek in court.​

• By raising potential penalties, the bill strengthens your bargaining power to challenge illegal fees, misrepresentations, and other abusive conduct.​

More transparency and access to your records

• Credit-repair firms would have to give you copies of every communication they send in your name and provide additional disclosures about what they can and cannot legally do.​

• They must keep records and any recorded calls for five years instead of two, which helps you and regulators prove patterns of misconduct if disputes arise later.​

Tighter ban on deceptive and “jamming” tactics

• The bill makes it explicitly illegal for firms to knowingly make false statements about your credit not just to creditors and bureaus, but also to the CFPB, FTC, and law enforcement, expanding who is protected from misinformation.​

• ESCRA limits repeated, duplicative dispute “jamming” on the same item, which protects you from services that rely on gimmicks that can backfire instead of fixing legitimate errors.​

Licensing and who is covered

• Anyone acting as a credit-repair organization would need state licensing, giving consumers added recourse through licensing agencies and weeding out some fly‑by‑night operators.​

• ESCRA clarifies that genuine attorneys representing consumers in real legal matters are treated differently, so consumers keep access to legitimate legal help while gaining stronger rights against non‑lawyer credit-repair shops.