CROA and software
The Credit Repair Organizations Act is the federal statute that regulates companies that charge consumers to repair their credit. Codified at 15 U.S.C. §1679 et seq. It exists because the credit-repair industry has a long history of taking up-front fees and delivering nothing.
What CROA covers
A "credit repair organization" under §1679a(3) is any person who uses interstate commerce to sell, provide, or perform a service intended to improve a consumer's credit record, in exchange for payment.
That definition catches:
- A traditional credit-repair company that bills you monthly to dispute items on your behalf
- A "credit consultant" who charges to write dispute letters and send them in your name
- An agency that runs a roster of clients and disputes for them
What CROA requires of those companies
- A written contract with the consumer before any services are performed
- A 3-day right of cancellation, in writing, with a separate cancellation form
- No advance fees — payment can only be collected after services are performed
- Specific disclosures about consumer rights under FCRA
- Surety bonds and state registration in many states
These are non-trivial obligations. Most consumer protection actions against credit-repair companies are CROA actions, not FCRA actions.
Why software you use yourself isn't a CRO
§1679a(3)(B) defines a CRO as a person who provides a service "in return for the payment of money or other valuable consideration." Software you license to draft your own letters doesn't fit — you're not paying for someone to dispute on your behalf, you're paying for a drafting tool. You file the dispute. You sign the letter. You mail it.
This is the structural reason you (the consumer) are the one mailing the letters. See why you mail the letters.
What changes when an agency uses CHAI Agency
When a credit-repair agency uses CHAI Agency or CHAI Agency Pro to manage clients on the clients' behalf, the agency is the CRO. Not Credit Hack AI. CROA obligations attach to the agency:
- The agency owes the consumer a written contract.
- The agency owes the consumer a 3-day cancellation right.
- The agency cannot collect advance fees.
- The agency may need to register and post a surety bond depending on the state.
Agencies are responsible for their own compliance. Use of any software does not by itself satisfy CROA.
What about whitelabel?
Whitelabel branding doesn't change the legal analysis. A CHAI Agency Pro customer who whitelabels the experience is still a CRO under their state's framework if they're charging consumers to repair credit on the consumers' behalf. Branding is a UI choice, not a liability shield.
Not legal advice
This article describes the structural relationship between CROA and software-as-a-tool. It is not legal advice for any specific business arrangement. Agencies should retain counsel familiar with credit-repair regulation in every state where they operate.
Last updated 11 days ago.
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