This state 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.
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 NRS 598.741(b)
Credit Service Organizations
1. “Buyer” means a natural person who is solicited to purchase or who purchases the services of an organization which provides credit services.
2. “Commissioner” means the Commissioner of Mortgage Lending.
3. “Division” means the Division of Mortgage Lending of the Department of Business and Industry.
4. “Extension of credit” means the right to defer payment of debt or to incur debt and defer its payment, offered or granted primarily for personal, family or household purposes.
(a) Means a person who, with respect to the extension of credit by others, sells, provides or performs, or represents that he or she can or will sell, provide or perform, any of the following services, in return for the payment of money or other valuable consideration:
(1) Improving a buyer’s credit record, history or rating.
(2) Obtaining an extension of credit for a buyer.
(3) Providing counseling or assistance to a person in establishing or effecting a plan for the payment of his or her indebtedness, unless that counseling or assistance is provided by and is within the scope of the authorized practice of a provider of debt-management services registered pursuant to chapter 676A of NRS.
(4) Providing advice or assistance to a buyer with regard to subparagraph (1) or (2).
(b) Does not include:
(1) A person organized, chartered or holding a license or authorization certificate to make loans or extensions of credit pursuant to the laws of this state or the United States who is subject to regulation and supervision by an officer or agency of this state or the United States.
(2) A bank, credit union, savings and loan institution or savings bank whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund or a private insurer approved pursuant to NRS 672.755.
(3) A person licensed as a real estate broker by this state where the person is acting within the course and scope of that license, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(4) A person licensed to practice law in this state where the person renders services within the course and scope of his or her practice as an attorney at law, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(5) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission where the broker-dealer is acting within the course and scope of such regulation.
(6) A person registered as a provider of debt-management services pursuant to chapter 676A of NRS.
(7) A reporting agency.
6. “Reporting agency” means a person who, for fees, dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the business of assembling or evaluating information regarding the credit of or other information regarding consumers to furnish consumer reports to third parties, regardless of the means or facility of commerce used to prepare or furnish the consumer reports. The term does not include:
(a) A person solely for the reason that he or she conveys a decision regarding whether to guarantee a check in response to a request by a third party;
(b) A person who obtains or creates a consumer report and provides the report or information contained in it to a subsidiary or affiliate; or
(c) A person licensed pursuant to chapter 463 of NRS.
NRS 598.746 Prohibited acts: Receiving money before complete performance; receiving money for referral to provider of credit; misleading statements; other fraudulent or deceptive acts. An organization and its agents, employees and representatives who sell or attempt to sell the services of the organization, shall not:
1. Charge or receive any money or other valuable consideration before full and complete performance of the services the organization has agreed to perform for or on behalf of the buyer.
2. Charge or receive any money or other valuable consideration solely for referral of the buyer to a retail seller who will or may extend credit to the buyer, if the credit which is or will be extended to the buyer is upon substantially the same terms as those available to the general public.
3. Make, counsel or advise any buyer to make, any statement which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, to a consumer credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit, with respect to a buyer’s creditworthiness, credit standing or credit capacity.
4. Make or use any untrue or misleading representations in the offer or sale of the services of an organization. For the purposes of this subsection, a “misleading representation” includes a guarantee that:
(a) The organization is able to remove information that is adverse to the buyer’s ability to obtain credit from the buyer’s credit record, history or rating.
(b) The organization is able to obtain an extension of credit for the buyer regardless of the buyer’s existing credit record, history or rating.
5. Engage, directly or indirectly, in any act, practice or course of business which operates or would operate as a fraud or deception upon any person in connection with the offer or sale of the services of an organization.
6. Remove, or assist or advise the buyer to remove from the buyer’s credit record, history or rating, information that is adverse to the buyer’s ability to obtain credit if the information is accurate and not obsolete.
7. Create, or assist or advise the buyer to create a new credit record, history or rating by using a different name, address, social security number, employee identification number or other misleading information.
8. Attempt to transfer or assign the organization’s certificate of registration.
9. Submit a buyer’s dispute to a consumer credit reporting agency without the buyer’s knowledge.
10. Call, or authorize any other person who is not the buyer to call a consumer credit reporting agency and portray himself or herself as the buyer.
NRS 598.752 Organization to register and deposit security before advertising services or conducting business in this State; separate security not required from salesperson, agent or representative of organization; regulations.
1. Before advertising its services or conducting business in this State, an organization must register pursuant to NRS 598.721 and deposit security in the amount of $100,000 with the Division pursuant to NRS 598.726. The security must be conditioned on compliance by the organization with the provisions of NRS 598.746 to 598.772, inclusive, and the terms of its contracts with buyers.
2. If an organization has deposited the required security, a salesperson, agent or representative of the organization who sells its services is not required to deposit his or her own separate security. For the purposes of this subsection, a person is a salesperson, agent or representative of an organization if:
(a) He or she does business under the same name as the organization; or
(b) The organization and the issuer of the security certify in writing that the security covers the salesperson, agent or representative.
3. The Division shall adopt such regulations as it deems necessary to carry out the provisions of this section.
1. Before the execution of a contract between the buyer and an organization or before the receipt by the organization of any money or other valuable consideration, whichever occurs first, the organization must provide to the buyer, in writing:
(a) A statement:
(1) That the buyer has a right pursuant to 15 U.S.C. §§ 1681g and 1681h to receive disclosure of all information, except medical information, in any file on him or her maintained by a consumer credit reporting agency;
(2) That 15 U.S.C. § 1681j requires that this disclosure be made free to the buyer if he or she requests it within 30 days after receipt of notice of a denial of credit;
(3) Of the approximate cost to the buyer of receiving this disclosure when there has not been a denial of credit; and
(4) That the buyer has the right pursuant to 15 U.S.C. § 1681i to dispute the completeness or accuracy of any item contained in any file on him or her maintained by any consumer credit reporting agency.
(b) A detailed description of the services to be performed by the organization for the buyer and the total amount the buyer will become obligated to pay for the services.
(c) A statement that the buyer has a right to proceed against the security deposited with the Division by the organization under the circumstances and in the manner set forth in NRS 598.731 and 598.736. The statement provided pursuant to this paragraph must include the name and address of the issuer of the security.
(d) A statement that the buyer may cancel a contract for the services of an organization within 5 days after its execution by written notice mailed or delivered to the organization.
(e) A statement identifying the availability of any nonprofit association which provides services similar to those offered by the organization. The statement provided pursuant to this paragraph must include the association’s telephone number, including the association’s national toll-free telephone number, if any.
2. The written information provided pursuant to subsection 1 must be printed in at least 10-point bold type and must include the following statement or a similar statement approved by the Division:
RIGHTS OF CONSUMERS REGARDING CREDIT FILES
PURSUANT TO STATE AND FEDERAL LAW
You have the right to obtain a copy of your credit file from a consumer credit reporting agency. There is no fee if, within the past 30 days, you have been turned down for credit, employment or insurance because of information in your credit report. The consumer credit reporting agency is obligated to provide someone to help you interpret the information in your credit file.
You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit service organization has the right to have accurate, current and verifiable information removed from your credit report. Generally, under the Fair Credit Reporting Act, the consumer credit reporting agency is obligated to remove accurate, negative information from your report only if it is more than 7 years old and bankruptcy information can be reported for 10 years. If you have notified a credit reporting agency that you dispute the accuracy of information in your credit file, the consumer credit reporting agency is obligated to make an investigation and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any relevant information and copies of all documents you have concerning the disputed information should be given to the consumer credit reporting agency. If the investigation does not resolve the dispute to your satisfaction, you may send a brief statement to the consumer credit reporting agency to keep in your credit file, explaining why you think the information in the credit file is inaccurate. The consumer credit reporting agency is obligated to include your statement or a summary of your statement about disputed information in any report it issues about you.
RIGHTS OF CONSUMERS REGARDING
CANCELLATION OF A CONTRACT
You have a right to give written notice of your intent to cancel a contract with a credit service organization for any reason within 5 working days from the date you signed it. If for any reason you do cancel a contract during this time, you do not owe any money. You have a right to sue a credit service organization if it misleads you.
3. The organization shall retain a copy of the written information it provides pursuant to the requirements of subsections 1 and 2 for not less than 2 years.
1. A contract between a buyer and an organization for the purchase of the services of the organization:
(a) Must be in writing;
(b) Must be signed by the buyer;
(c) Must be dated; and
(d) Must clearly indicate above the signature line that the buyer may cancel the contract within 5 days after its execution by giving written notice to the organization of his or her intent to cancel the contract. If the notice is mailed, it must be postmarked not later than 5 days after the execution of the contract.
2. A copy of each contract executed by a buyer and an organization must be retained by the organization for not less than 2 years.
NRS 598.767 Organization to maintain registered agent for service of legal process. An organization shall file with the Division the information required pursuant to NRS 77.310 and continuously maintain a registered agent for service of legal process.
1. Any waiver by a buyer of the provisions of NRS 598.746 to 598.777, inclusive, is contrary to public policy and is void and unenforceable. Any attempt by an organization to have a buyer waive rights given by NRS 598.746 to 598.777, inclusive, is unlawful.
NRS 598.777 Buyer’s action for recovery of damages or injunctive relief; attorney’s fees; punitive damages. A buyer injured by a violation of NRS 598.746 to 598.772, inclusive, or by a breach by an organization of a contract subject to those sections, may bring an action for recovery of damages, for injunctive relief or for both recovery of damages and injunctive relief. Judgment for damages must be entered for actual damages, but in no case less than the amount paid by the buyer to the organization, plus reasonable attorney’s fees and costs. If the court deems it proper, the court may award punitive damages.
2. The remedies provided in NRS 598.772 and 598.777 for violation of any provision of NRS 598.746 to 598.772, inclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.