Credit Monitoring Clarification Act - Amends the Credit Repair Organizations Act to cite conditions under which provision to a consumer of credit reports, credit score analysis, and assistance in a case of identity theft shall not be considered as an activity to improve a consumer's credit status, which is subject to regulation under such Act.
Exempts from regulation under such Act any person (credit repair organization, or CRO) representing that it can modify or remove, or assist the consumer in modifying or removing, any information in the consumer's credit report if the CRO gives clear and conspicuous notice, before the consumer pays or agrees to pay it, that: (1) neither the consumer nor anyone else has the right to have accurate and current information removed from a credit report; and (2) the consumer has the right to dispute any inaccurate information by contacting the credit bureau directly. Requires a CRO, to qualify for this exemption from regulation, also to give the consumer, before payment or agreement to pay, a specified disclosure entitled "Your Rights Concerning Your Consumer Credit File."
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6129 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 6129
To amend the Credit Repair Organizations Act to clarify the
applicability of certain provisions to credit monitoring services, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 20, 2006
Mr. Royce (for himself, Mr. Kanjorski, Mr. Price of Georgia, Ms. Bean,
Mr. Bachus, Mr. Scott of Georgia, Mr. Sessions, and Ms. Ginny Brown-
Waite of Florida) introduced the following bill; which was referred to
the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Credit Repair Organizations Act to clarify the
applicability of certain provisions to credit monitoring services, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Credit Monitoring Clarification
Act''.
SEC. 2. CLARIFICATION RELATING TO CREDIT MONITORING SERVICES.
(a) In General.--Section 403 of the Credit Repair Organizations Act
(15 U.S.C. 1679a) is amended--
(1) by striking ``For purposes of this title'' and
inserting ``(a) In General.--For purposes of this title''; and
(2) by adding at the end the following new subsection:
``(b) Clarification With Respect to Certain Credit Monitoring
Services Under Certain Circumstances.--
``(1) In general.--Subject to paragraph (2), the following
shall not be considered activities described in clause (i) of
subsection (a)(3)(A):
``(A) The provision of, or provision of access to,
credit reports, credit monitoring notifications, credit
scores and scoring algorithms, and other credit score-
related tools to a consumer (including generation of
projections and forecasts of such consumer's potential
credit scores under various prospective trends or
hypothetical or alternative scenarios).
``(B) Any analysis, evaluation, and explanation of
such actual or hypothetical credit scores, or any
similar projections, forecasts, analyses, evaluations
or explanations.
``(C) In conjunction with offering any of the
services described in subparagraph (A) or (B), the
provision of materials or services to assist a consumer
who is a victim of identity theft.
``(2) Conditions for application of paragraph (1).--
Paragraph (1) shall apply with respect to any person engaging
in any activity described in such paragraph only if--
``(A) the person does not represent, expressly or
by implication, that such person--
``(i) will or can modify or remove, or
assist the consumer in modifying or removing,
adverse information that is accurate and not
obsolete in the consumer's credit report; or
``(ii) will or can alter, or assist the
consumer in altering, the consumer's
identification to prevent the display of the
consumer's credit record, history, or rating
for the purpose of concealing adverse
information that is accurate and not obsolete;
``(B) in any case in which the person represents,
expressly or by implication, that it will or can modify
or remove, or assist the consumer in modifying or
removing, any information in the consumer's credit
report, except for a representation with respect to any
requirement imposed on the person under section 611 or
623(b) of the Fair Credit Reporting Act, the person
discloses, clearly and conspicuously, before the
consumer pays or agrees to pay any money or other
valuable consideration to such person, whichever occurs
first, the following statement:
```NOTICE: Neither you nor anyone else has
the right to have accurate and current
information removed from your credit report. If
information in your report is inaccurate, you
have the right to dispute it by contacting the
credit bureau directly.''';
``(C) the person discloses, clearly and
conspicuously, to the consumer the following
statement--
``(i) in writing; and
``(ii) except as provided in subparagraph
(D), before the consumer pays or agrees to pay
any money or other valuable consideration to
such person, whichever occurs first:
```Your Rights Concerning Your Consumer Credit File
```You have a right to obtain a free copy of your
credit report once every 12 months from each of the
nationwide consumer reporting agencies. To request your
free annual credit report, you may go to
www.annualcreditreport.com, or call 877-322-8228, or
complete the Annual Credit Report Request Form and mail
it to: Annual Credit Report Request Service, P.O. Box
105281, Atlanta, GA 30348-5281. You can obtain
additional copies of your credit report from a credit
bureau, for which you may be charged a reasonable fee.
There is no fee, however, if you have been turned down
for credit, employment, insurance, or a rental dwelling
because of information in your credit report within the
preceding 60 days. The credit bureau must provide
someone to help you interpret the information in your
credit file. You are entitled to receive a free copy of
your credit report if you are unemployed and intend to
apply for employment in the next 60 days, if you are a
recipient of public welfare assistance, or if you have
reason to believe that there is inaccurate information
in your credit report due to fraud.
```You have the right to cancel your contract with
a credit monitoring service without fee or penalty at
any time, and if you have prepaid for more than one
month of a credit monitoring service, you will receive
a pro rata refund if you cancel.
```The Federal Trade Commission regulates credit
bureaus and credit monitoring services. For more
information contact:
```Federal Trade Commission
```Washington, D.C. 20580
```1-877-FTC-HELP
```www.ftc.gov.''';
``(D) in the case where a consumer pays or agrees
to pay for the service during a telephone call, an in-
person conversation or other oral communication, the
person discloses to the consumer the following
statements:
``(i) during the telephone call, in-person
conversation or other oral communication and
before the consumer pays or agrees to pay for
the service, whichever occurs first--
``(I) you have a right to obtain a
free copy of your credit report once
every 12 months from each of the
nationwide consumer reporting agencies;
``(II) if the contract is for a
credit monitoring service, the
following additional statement: `You
may cancel the credit monitoring
service without fee or penalty at any
time'; and
``(III) if the consumer is billed
for a credit monitoring service on
other than a monthly basis, the
following additional statement: `You
will receive a pro rata refund if you
cancel'; and
``(ii) within 30 days of the telephone
call, in-person conversation or other oral
communication, the written statement provided
for in subparagraph (C); and
``(E) in any case in which the person offers a
subscription to a credit monitoring program to a
consumer--
``(i) the consumer may cancel the credit
monitoring service at any time upon written
notice to the person without penalty or fee for
such cancellation; and
``(ii) in any case in which the consumer is
billed for the credit monitoring service on
other than a monthly basis, the person shall
make a pro rata refund to the consumer of any
fee prepaid by the consumer. The pro rata
refund shall be calculated from the date that
the person receives the consumer's notice of
cancellation until the end of the period. The
person shall issue the refund required under
this subparagraph to the consumer within 60
days of receipt of the consumer's notice of
cancellation.''.
(b) Clarification of Nonexempt Status.--Section 403(a) of the
Credit Repair Organizations Act (15 U.S.C. 1679a) (as so redesignated
by subsection (a) of this section) is amended, in paragraph (3)(B)(i),
by inserting ``and is not for its own profit or for that of its
members'' before the semicolon at the end.
(c) Revision of Disclosure Requirement.--Section 405(a) of the
Credit Repair Organizations Act (15 U.S.C. 1679c) is amended by
striking everything after the heading of the disclosure statement
contained in such section and inserting the following new text of the
disclosure statement:
``You have a right to dispute inaccurate information in your credit
report by contacting the credit bureau directly. However, neither you
nor any `credit repair' company or credit repair organization has the
right to have accurate, current, and verifiable information removed
from your credit report. The credit bureau must remove accurate,
negative information from your report only if it is over 7 years old.
Bankruptcy information can be reported for 10 years.
``You have a right to obtain a free copy of your credit report once
every 12 months from each of the nationwide consumer reporting
agencies. To request your free annual credit report, you may go to
www.annualcreditreport.com, or call 877-322-8228, or complete the
Annual Credit Report Request Form and mail it to: Annual Credit Report
Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can
obtain additional copies of your credit report from a credit bureau,
for which you may be charged a reasonable fee. There is no fee,
however, if you have been turned down for credit, employment,
insurance, or a rental dwelling because of information in your credit
report within the preceding 60 days. The credit bureau must provide
someone to help you interpret the information in your credit file. You
are entitled to receive a free copy of your credit report if you are
unemployed and intend to apply for employment in the next 60 days, if
you are a recipient of public welfare assistance, or if you have reason
to believe that there is inaccurate information in your credit report
due to fraud.
``You have a right to sue a credit repair organization that
violates the Credit Repair Organizations Act. This law prohibits
deceptive practices by credit repair organizations.
``You have the right to cancel your contract with any credit repair
organization for any reason within 3 business days from the date you
signed it.
``Credit bureaus are required to follow reasonable procedures to
ensure that the information they report is accurate. However, mistakes
may occur.
``You may, on your own, notify a credit bureau in writing that you
dispute the accuracy of information in your credit file. The credit
bureau must then reinvestigate and modify or remove inaccurate or
incomplete information. The credit bureau may not charge any fee for
this service. Any pertinent information and copies of all documents you
have concerning an error should be given to the credit bureau.
``If the credit bureau's reinvestigation does not resolve the
dispute to your satisfaction, you may send a brief statement to the
credit bureau, to be kept in your file, explaining why you think the
record is inaccurate. The credit bureau must include a summary of your
statement about disputed information with any report it issues about
you.
``The Federal Trade Commission regulates credit bureaus and credit
repair organizations. For more information contact:
``Federal Trade Commission
``Washington, D.C. 20580
``1-877-FTC-HELP
``(877-382-4357)
``www.ftc.gov.''.
(d) Effective Date.--Section 403(b)(2)(E) of the Credit Repair
Organizations Act shall take effect upon the enactment of this Act. The
requirements for written disclosures under sections 403(b)(2)(B),
403(b)(2)(C) and 403(b)(2)(D), as applicable, shall take effect 90 days
after enactment of this Act.
(e) Disclosure Updates.--The written disclosures required under
section 403(b)(2)(D) and section 405(a) of the Credit Repair
Organizations Act (15 U.S.C. 1679 et seq.) (as amended by this Act)
shall, if any changes are made to the centralized source contact
information for obtaining a free credit report, be updated by the
parties distributing the disclosures.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Referred to the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology.
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