Arkansas currently has legislation pertaining to credit repair. These laws apply to the state that the consumer is located in, not the credit repair company. Keep this in mind if you plan on doing business out of state.
**DISCLAIMER - The following information is not legal advice. We strive to keep all information updated to the best of our knowledge but regulations are subject to change frequently, without our immediate awareness. The information on this page may not be 100% accurate. We strongly urge you to do your own research and to consult with a legal professional or your local legislators before making any decisions.
Some states require registration with the overseeing entity. There may also be municipal or county regulations regarding business licensing or permits depending on your location. Consult with your local government to determine licensing requirements.
Surety bonds are required in certain states in order to prove that the credit repair organization is operating in an ethical manner. The amount and requirements vary from state to state.
If the CRO plans to receive payment before having completed the service for which they are engaged, they must get a surety bond and establish a trust account at a federally insured bank or savings and loan.
All credit repair organizations are subject to both state and federal regulations. According to federal law, the Credit Repair Organizations Act (CROA) requires all CRO's to provide contracts outlining the terms and descriptions of their services to their customers. Each individual state has different requirements regarding the language of those contracts.
Anyone performing credit repair services and receiving compensation for said services is subject to the regulations in this act. However, occupations in related professions may also perform duties that may be considered credit repair. Usually, as long as someone is behaving within the course and scope of their profession and not collecting compensation, they are considered exempt from these regulations. However, these exemption requirements vary from state to state. See § 4-91-202 (B).
(a) As used in this subchapter:
“You, the Buyer, may cancel this contract at any time before midnight of the fifth day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right”;
“Notice of Cancellation: Buyer may cancel this contract without any penalty or obligation within five (5) days from the date the contract is signed. If Buyer cancels this contract, any payment made by Buyer under this contract will be returned within ten (10) days following receipt by the Seller of Buyer’s cancellation notice. To cancel this contract, mail or deliver a signed dated copy of this cancellation notice or any other written notice to (name of seller) at (address of seller) (place of business) not later than midnight (date). I hereby cancel this transaction, (date) (purchaser’s signature).”
(e) A credit repair services organization, its salespersons, agents, and representatives, and independent contractors who sell or attempt to sell the services of a credit repair services organization shall not:
(g) In any proceeding involving this subchapter, the burden of proving an exemption or an exception from a definition described in this subchapter is upon the person claiming it.
(h) A violation of this section is:
Ark. Code § 4-91-202