1. (a) In general No person may—

   1. (1) make any statement, or counsel or advise any consumer to make any statement, which is untrue or misleading (or which, upon the exercise of reasonable care, should be known by the credit repair organization, officer, employee, agent, or other person to be untrue or misleading) with respect to any consumer’s credit worthiness, credit standing, or credit capacity to—

      1. (A) any consumer reporting agency (as defined in section 1681a(f) of this title); or

      2. (B) any person—

         1. (i) who has extended credit to the consumer; or
         2. (ii) to whom the consumer has applied or is applying for an extension of credit;

   2. (2) make any statement, or counsel or advise any consumer to make any statement, the intended effect of which is to alter 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 to—

      1. (A) any consumer reporting agency;

      2. (B) any person—

         1. (i) who has extended credit to the consumer; or
         2. (ii) to whom the consumer has applied or is applying for an extension of credit;
   3. (3) make or use any untrue or misleading representation of the services of the credit repair organization; or
   4. (4) engage, directly or indirectly, in any act, practice, or course of business that constitutes or results in the commission of, or an attempt to commit, a fraud or deception on any person in connection with the offer or sale of the services of the credit repair organization.
2. (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.

(Pub. L. 90–321, title IV, § 404, as added Pub. L. 104–208, div. A, title II, § 2451, Sept. 30, 1996, 110 Stat. 3009–456.)

Editorial Notes

Prior Provisions

For a prior section 404 of Pub. L. 90–321, see note set out under section 1679 of this title.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with respect to contracts entered into by a credit repair organization before the end of such period, see section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 of this title.