Florida Credit Repair Laws: Do You Need a Company to Dispute Errors?

Do you need a credit repair company to dispute errors?

No. The FCRA gives everyone the right to dispute information they believe is inaccurate or incomplete directly with Equifax, Experian, and TransUnion, and filing a dispute is free. As the Federal Trade Commission (FTC) explains, no company can legally get information that's both accurate and current taken off your credit report. Our step-by-step guide to disputing a credit report error yourself walks through the process.

Some people still choose to pay for help, which is legal. If you do, it helps to know the rules these companies must follow.

Florida's Credit Service Organizations Act

Florida regulates paid credit repair in sections 817.7001 through 817.706 of the Florida Statutes. The law applies to a "credit service organization": generally, a business that, for payment, sells or performs (or says it can perform) services to improve a person's credit record, history, or rating, to help them get credit, or advises them about either. Some are exempt, including certain lenders, banks, and credit unions, 501(c)(3) nonprofit organizations, and Florida-licensed attorneys acting within their practice.

Key rules for covered companies include:

• Limits on upfront fees. A credit service organization may not charge or receive money before it has fully performed the services it agreed to perform, unless it has a $10,000 surety bond and a trust account at a federally insured bank or savings institution in Florida. Even then, money received in advance must be held in that trust account until the services are fully performed (s. 817.7005).
• A written information statement before you sign or pay. It must describe your right to review your credit file and to dispute information directly with the credit bureaus. It must state that accurate information cannot be permanently removed from a credit bureau's file, describe the services and the total cost, and explain your right to make a claim against the bond or trust account (ss. 817.702 and 817.703).
• A written, dated, signed contract that describes the services, any guarantees or refund promises, the total payments, and the estimated time to perform the services (s. 817.704).
• A five-day right to cancel. You may cancel the contract without penalty until midnight of the fifth day after you sign it. The contract must include a detachable "Notice of Cancellation" form, and any payment must be returned within 10 days after the company receives your cancellation (s. 817.704).
• No false or misleading statements. A credit service organization may not make, or advise you to make, false or misleading statements to a credit bureau or creditor, and may not use deceptive practices when selling its services (s. 817.7005).
• No waivers. Any attempt to have you waive your rights under the act is void and is itself a violation (s. 817.705).

Violations can be a third-degree felony (s. 817.705). A buyer harmed by a violation may sue for damages: at least the amount paid, plus reasonable attorney's fees and costs, and possibly punitive damages (s. 817.706).

The federal Credit Repair Organizations Act

A federal law, the Credit Repair Organizations Act (CROA), also applies nationwide. In general, it requires credit repair companies to:

• Give you a written disclosure called "Consumer Credit File Rights Under State and Federal Law" before you sign a contract
• Use a written contract that spells out the services, total cost, and how long the services will take
• Give you three business days to cancel without charge
• Not charge you until the promised services are fully performed
• Not make false or misleading claims, or advise you to make false statements to credit bureaus or creditors

When both laws apply, a company generally has to follow both. That's why Florida's five-day cancellation window and the federal three-business-day window can both show up in a contract.

Red flags of credit repair scams

The FTC warns consumers to be cautious of any company that:

• Insists on payment before it does anything
• Promises to get accurate negative information taken off your report, or guarantees a specific score or result
• Tells you not to contact the credit bureaus yourself
• Tells you to dispute everything on your report, including information you know is accurate
• Tells you to lie on credit applications, or offers to create a "new credit identity," for example by using an Employer Identification Number (EIN) instead of your Social Security number. The FTC warns this is a scam that can lead to fines or prison.
• Doesn't explain your legal rights or what you can do yourself for free

Where Floridians can report a problem

• Florida Attorney General: MyFloridaLegal.com accepts consumer complaints.
• Federal Trade Commission: ReportFraud.ftc.gov
• Consumer Financial Protection Bureau: consumerfinance.gov/complaint

Doing it yourself

Disputing on your own takes some time and organization, but the steps are straightforward. Get your free reports at AnnualCreditReport.com, review them for common errors, write a clear dispute (see our letter template), and keep track of what happens after you dispute. Results vary, and accurate, timely information can legally stay on your report.

Clear Credit Coach is based in Florida and is education-only. We sell a do-it-yourself guide and offer a free checklist. We are not a law firm and not a credit repair organization, we don't perform services on anyone's behalf, and we don't contact credit bureaus or creditors for you.

Education only. This article is general educational information, not legal or financial advice. Clear Credit Coach is not a law firm or a credit repair organization and doesn't contact credit bureaus or creditors on your behalf. Results vary, and accurate, timely information can legally stay on your credit report.