CREDIT REPAIR LAWS IN INDIANA

The credit repair laws in Indiana aim to protect people who are in despair to improve their credit scores. Whether you are looking for credit repair services or plan to build a credit repair business in Indiana, it’s important to learn about this law. 

The average credit score in Indiana is 712 which means that many people in the state are good payors. However, this does not indicate that the residences are financially secure. Or don’t need to improve their credit score. Indiana is ranked 27th as the poorest state in the USA with an 11.9% poverty rate. Out of 6,517,430 residences, there are 775, 823 people who are living below the poverty line in the state. 

Indiana has an average mortgage debt of $125,918. This is about 60% of the average mortgage debt in the USA which is $208,180. Add to that number is the state’s non-mortgage debt which is $23,583. This includes its average credit card debt which is $4,796. Thousands of people in Indiana need credit repair services to help improve their credit scores. Or for others, build their credit.

This is why the credit repair business is a growing industry in the state. Being said that, the state has credit laws to regulate credit repair business owners and protect consumers against unfair and deceptive business practices. If you are planning to start a credit repair company in Indiana, it is critical to abide by the state’s federal law. To avoid illegalities that may result in the closure of the business.

Learn about the prohibited acts, consumer statement, contract, surety bond, and damages permitted in Indiana Credit Repair Laws.

Many people in Indiana are seeking professional help to build or improve their credit. This is sometimes taken advantage of by companies who make false and deceptive advertising that promise buyers things that cannot be delivered. The credit repair law in Indiana aims to protect people from falling into scams and make an informed decisions. As a business owner, you have a high responsibility to know and practice the credit repair law in Indiana to avoid legal issues.

 

The Prohibited Acts under Credit Repair Laws in Indiana

• No credit repair business or service provider shall receive or charge any payment before the complete performance of services that a credit repair business has agreed to perform for or on behalf of a consumer. Unless the credit repair business or company has: (1) obtained a surety bond issued by a surety company admitted to do business in Indiana; or (2) established an irrevocable letter of credit.
• The state prohibits any person or credit repair business to receive or charge any payment for referring a buyer to a creditor who may or will extend credit to the buyer if the extension of credit is made upon substantially the same terms as those available to the general public.
• No person or credit repair business in Indiana shall make or advise a buyer to make a false or misleading statement concerning the buyer’s creditworthiness, credit standing, or credit capacity.
• Credit repair business or any credit repair services provide are NOT allowed to use a false or misleading representation in an offer to sell the services of a credit repair company. For instance:

• • Guaranteeing to “erase bad credit” unless the representation discloses that this can be done only if a person’s credit history is inaccurate or obsolete;
  • Guarantee an extension of credit regardless of the buyer’s previous credit history unless the representation discloses the eligibility requirements for obtaining the extension of credit.
  • Requiring a buyer to waive a right protected by a state or federal law.
  • To take a power of attorney from a buyer for any purpose other than inspecting documents as provided by law.

 

What should the written statement between the consumer and the credit repair company contain following the credit repair law in Indiana?

Before executing a contract or agreement with a buyer or receiving payment, a credit repair company must provide the buyer with a written statement with the following information:

• A complete and detailed description of the credit repair services to be performed by the credit services organization for the buyer and the total cost of the services.
• A statement explaining the buyer’s right to proceed against the bond or surety account.
• The name and address of the: (1) surety company that issued a bond; or (2) depository and the trustee of a surety account and the account number of the surety account.
• A complete and accurate statement of the buyer’s right to review any file on the buyer maintained by a consumer reporting agency as provided under the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.).
• A statement that the buyer’s file is available for review, been denied, and for a minimal charge at any other time.
• A complete and accurate statement of the buyer’s right to dispute the completeness or accuracy of an item contained in a file on the buyer maintained by a consumer reporting agency.
• A statement that accurate information cannot be permanently removed from the files of a consumer reporting agency.
• A complete and accurate statement indicates when consumer information becomes obsolete and when consumer reporting agencies are prevented from issuing reports containing obsolete information.
• A complete and accurate statement of the availability of non-profit credit counseling services.

 

Contract and Cancellation of Contract Following the Indiana Credit Repair Laws

The contract should be written, dated, and signed by both the buyer and the credit repair service provider with the following information:

• A statement in at least 10 point boldface type in immediate proximity to the space reserved for the signature of the buyer that reads:
• “You, the buyer, may cancel this contract at any time before midnight of the third business day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right.”.
• The terms and conditions of payment, including the total amount of all payments to be made by the buyer to the credit services organization or another person.
• A complete and detailed description of the services to be performed and the results to be achieved by the credit repair service provider for or on behalf of the buyer. This should include all guarantees and all promises of full or partial refunds and a list of the adverse information appearing on the consumer’s credit report that the credit repair service provider expects to have modified and the estimated date by which each modification will occur.
• The principal business address of the credit repair company or credit repair service provider. Including the name and address of its agent in Indiana authorized to receive service of process.

The contract shall be accompanied by two (2) copies of a form captioned “NOTICE OF CANCELLATION” attached to the contract and that contains the following statement in at least 10 point boldface type:

NOTICE OF CANCELLATION

You may cancel this contract, without any penalty or obligation, at any time

before midnight of the third business day after the date the contract is

signed. If you cancel, any payment made by you under this contract will be

returned within ten days following receipt by the seller of your cancellation

notice, or any other written notice, to _____________________________________

(name of seller)

_______________________________________________________________________________

(address of seller) (place of business)

not later than midnight _______________________________________________________

(date)

“I hereby cancel this transaction”. ___________________________________________

(date)

_______________________________________________________________________________

(buyer’s signature)

 

The credit repair company shall give a copy of the completed contract and all other documents required by the credit services organization to the buyer at the time the contract and the documents are signed.

 

The Surety Bond Per Credit Repair Law in Indiana for Credit Repair Business in Indiana

• Before doing business in Indiana, a credit repair company must obtain a surety bond in the amount of twenty-five thousand dollars ($25,000), issued by a surety company authorized to do business in Indiana in favor of the state for the benefit of a person that is damaged by a violation of this chapter.
• The Attorney general may waive the bonding requirement and instead of the bond, accept an irrevocable letter of credit for an equivalent amount issued in favor of the state for the benefit of a person that is damaged by a violation of this chapter.

 

Damage Claims and Alternative Actions under the Credit Repair Law Indiana

 

A person that is damaged by a credit repair company’s violation of this chapter may:

• Recover the greater of two times the number of actual damages or one thousand dollars ($1,000) and attorney’s fees.
• Bring an action against the bond or irrevocable letter of credit required to recover an amount equal to the person’s actual damages.

 

** Disclaimer: We give our best to provide accurate information about the credit repair law in Indiana. However, the rules and regulations of the state may change anytime. We recommend doing more research or seeking legal advice concerning this matter**

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