Lawmakers Introduce Bipartisan Bill Targeting Credit Repair Scams
Sens. Chris Coons (D-Del.) and Lisa Murkowski (R-Alaska) recently introduced bipartisan legislation aimed at cracking down on fraudulent credit repair practices that exploit financially vulnerable consumers. Their legislation, the Ending Scam Credit Repair Act, would impose new guardrails on credit repair organizations (CROs), including a prohibition on collecting payment until at least six months after demonstrable improvements in a consumer’s credit score. The bill also requires CROs to register with states, strengthens disclosure requirements, and increases civil penalties for violations.
A central provision targets “jamming,” a tactic in which credit repair firms flood financial institutions with duplicative disputes, often overwhelming systems and delaying the resolution of legitimate credit report issues. The legislation would explicitly ban this practice.
Supporters say the bill addresses widespread abuse in the credit repair industry, where some firms charge upfront fees and promise results they cannot deliver, often taking advantage of consumers already facing financial hardship.
“Americans are already stretched thin,” said Sen. Coons. “Improving a low credit score is hard enough without having to navigate predatory companies seeking to lie to you and rip you off. The Ending Scam Credit Repair Act would protect Americans trying to restore their financial foundation while making it easier for honest businesses to succeed.”
“There are too many predatory operators in the credit repair industry exploiting financially vulnerable Americans with deceptive practices and exorbitant fees,” said Sen. Murkowski. “Rebuilding financial stability and improving one’s credit score is often a grueling, time-consuming process. This legislation establishes long-overdue guardrails and accountability to stop bad actors from profiting off those trying to get back on their feet.”
Companion legislation has been introduced in the House by Reps. Sarah McBride (D-Del.) and Young Kim (R-Calif.), underscoring bipartisan and bicameral support for the effort. The bill has also drawn backing from a broad coalition of industry and consumer advocacy groups, including the American Bankers Association, National Consumer Law Center, American Financial Services Association, National Association of Consumer Bankruptcy Attorneys, National Association of Consumer Advocates, the Consumer Bankers Association, Delaware Community Legal Aid Society, the Delaware Community Reinvestment Action Council, American Fintech Council, Consumer Action, and the AARP.
If enacted, the legislation would mark a significant tightening of federal oversight in the credit repair space, aligning it with broader regulatory efforts to improve credit reporting accuracy and protect consumers navigating financial distress.
