No
Can a consumer be charged for the cost of rescoring and/or the CreditXpert Credit Analyzer or What if Simulator tools?
There remains much confusion about if/when rescoring costs can be passed onto consumers. The answer is never. End users of credit data are prohibited from passing along to the consumer any costs associated with credit rescoring or any tool or advice intended to improve the consumer’s credit report, credit history or credit score. There are three separate restrictions in place. Fair Credit Reporting Act (FCRA) - www.ftc.gov/os/statutes/031224fcra.pdf
Section 611 of the FCRA prohibits the charging of any consumer for the processing of a consumer dispute. § 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i] (A) In general. Subject to subsection (f), if the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, FREE OF CHARGE, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller.
Credit Repair Organizations Act (CROA) - www.ftc.gov/os/statutes/croa/croa.shtm
The Credit Repair Organizations Act places numerous restrictions and requirements on entities providing credit repair services SEC. 2451. REGULATION OF CREDIT REPAIR ORGANIZATIONS. Title IV of the Consumer Credit Protection Act (Public Law 90-321, 82 Stat. 164) For purposes of this title, the following definitions apply: (3) Credit repair organization. -- The term 'credit repair organization'-- means any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or represent that such person can or will sell, provide, or perform) any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of-- improving any consumer's credit record, credit history, or credit rating; or providing advice or assistance to any consumer with regard to any activity or service described SEC. 404. PROHIBITED PRACTICES.(6) (b) Payment in Advance.--No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed. SEC. 405. DISCLOSURES.(8) (a) In addition to an executed contract, a separate written disclosure between the consumer and the credit repair organization is required (c) Retention of Compliance Records.-- The credit repair organization shall maintain a copy of the statement signed by the consumer acknowledging receipt of the statement shall be maintained in the organization's files for 2 years after the date on which the statement is signed by the consumer.
Repository Restrictions
Experian, Trans Union and Equifax require that language prohibiting the passing along of rescoring costs to a consumer be included in every CRA membership agreement. This is done to comply with section 611 of the FCRA, the CROA and is contained in item 14 of the membership agreement… 14. Applicant agrees that CTI may verify, through audit or otherwise, that Applicant is in fact the end Applicant of the credit information with no intention to resell or otherwise provide or transfer the credit information in whole or in part to any other person or entity. Applicant understands that costs associated with credit rescoring are the sole responsibility of the Applicant and cannot be passed to the consumer either directly or indirectly. CTI will utilize a third party vendor to perform an on-site inspection of Applicant’s physical location. Applicant agrees to allow access and is responsible for the associated costs. Credit Technologies provides multiple payment methods including allowing end users to pay for services via credit card. End users are prohibited from charging a consumer for credit rescoring charges. Doing so represents a potential violation of Federal law and of the terms of the Credit Technologies membership agreement. As these requirements exist with all three repositories, similar restrictions exist at all CRAs. The bottom line is - If rescoring is paid for by the consumer, it is no longer credit rescoring - It's Credit Repair. And the end user is then subject to and in violation of FCRA, CROA and the CT/repository membership agreement.
Note: CreditXpert Credit Assure is exempt from these restrictions as it does not meet the definition of credit repair. The cost of Credit Assure can be passed directly to the consumer.