The ESCRA Act strengthens federal protections against deceptive credit repair practices by amending the existing Credit Repair Organizations Act. The bill prohibits credit repair organizations from collecting upfront fees until they provide documented proof that promised credit improvements have actually been achieved—and requires that proof come from a consumer report issued at least 180 days after the service is rendered. The legislation also bans "jamming," the practice of repeatedly filing the same disputes without allowing adequate investigation time, and requires credit repair organizations to disclose that they perform services consumers can do for free, provide copies of all communications to clients, and clearly identify themselves when contacting creditors or credit bureaus. Additionally, the bill mandates state licensing for credit repair organizations starting January 1, 2026, increases civil penalties to include $500 per violation, and expands record-keeping requirements to include telephone recordings. The changes primarily affect credit repair companies and their consumers, with no specific federal funding or appropriations mentioned in the legislation.
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