If you want to start your profitable credit repair business in [STATE], you need to understand [STATE] state credit repair laws, bond requirements, licensing, and statute of limitations. Read this book to understand the basics of credit repair and then scroll down below for important details on [STATE] state credit repair laws and regulations.
$0 - A bond is not required in this state
There are federal and state laws for Kentucky. You should be aware of both.
The Credit Repair Organizations Act (CROA) is a federal law passed in September 1996 that regulates organizations whose purpose is increasing consumer’s credit score through credit repair. One of the most important things the CROA did is make it illegal for credit repair organizations to make false claims. Don’t worry though, staying compliant is pretty easy after you get familiar with the law! This law is moderated and enforced by the Federal Trade Commission (FTC), so the FTC has the authority to close down any credit repair organizations that are operating outside the parameters of these laws (like fraudulent or illegal activities).
The main sections include mandates that:
Simply put, these laws were put in place to protect people from credit repair companies using scammy business practices. As long as you’re not trying to be sketchy and scam people, you should be able to stay compliant easily!
To read the Credit Repair Organizations Act in full, visit the United States House of Representatives’ record of the act here.
Kentucky has laws that govern how to start (and run!) a credit repair business in Kentucky. Here are the relevant regulations and Kentucky laws governing credit repair businesses that you need to be aware of:
Note: Kentucky does not have a comprehensive statutory scheme, but does regulate credit repair business under its telephone solicitation rules, as follows.
367.46955 Prohibited telephone solicitation acts and practices
It is a prohibited telephone solicitation act or practice and a violation of KRS 367.46951 to 367.46999 for any person making a telephone solicitation to engage in the following conduct:
(1) Advertising or representing that registration as a telemarketer equals an endorsement or approval by any government or governmental agency;
(2) Requesting a fee in advance to remove derogatory information from or improve a person's credit history or credit record;
(3) Requesting or receiving a payment in advance from a person to recover or otherwise aid in the return of money or any other item lost by the consumer in a prior telephone solicitation transaction;
(4) Requesting or receiving payment of any fee or consideration in advance of obtaining a loan or other extension of credit when the telemarketing company has guaranteed or represented a high likelihood of success in obtaining or arranging a loan or other extension of credit for a person;
(5) Obtaining or submitting for payment a check, draft, or other form of negotiable paper drawn on a person's checking, savings, or bond or other account without the consumer's express written authorization, or charging a credit card account or making electronic transfer of funds except in conformity with KRS 367.46963;
(6) Procuring the services of any professional delivery, courier, or other pickup service to obtain immediate receipt or possession of a consumer's payment, unless the goods are delivered with the opportunity to inspect before any payment is collected;
(7) Assisting, supporting, or providing substantial assistance to any telemarketer when the telemarketing company knew or should have known that the telemarketer was engaged in any act or practice prohibited under this section;
(8) Making a telephone solicitation to anyone under eighteen (18) years of age. When making a telephone solicitation the telemarketer shall inquire as to whether the person is eighteen (18) years of age or older and the answer shall be presumed to be correct;
(9) Utilizing any method to block or otherwise circumvent the use of a caller identification service when placing an unsolicited telephone solicitation call;
(10) Directing or permitting employees to use a fictitious name or not to use their name while making a telephone solicitation;
(11) Threatening, intimidating, or using profane or obscene language;
(12) Causing the telephone to ring more than thirty (30) seconds in an intended telephone solicitation;
(13) Engaging any person repeatedly or continuously with behavior a reasonable person would deem to be annoying, abusive, or harassing;
(14) Initiating a telephone solicitation call to a person, when that person has stated previously that he or she does not wish to receive solicitation calls from that seller;
(15) (a) Making or causing to be made an unsolicited telephone solicitation call if the residential number for that telephone appears in the current publication of the zero call list maintained by the Office of the Attorney General, Division of Consumer Protection. Any holder of a residential telephone number may notify the division and be placed on a zero call list indicating the wish not to receive unsolicited telephone solicitation calls by notification to the division. The telephone numbers of persons requesting to be on the zero call list shall remain on the list until the person rescinds his or her name from the list.
(b) The zero call list shall be updated, published, and distributed on a quarterly basis in electronic and hard copy and may be made available in other formats at the discretion of the division. After the publication of the list each quarter each telemarketing company, telemarketer, and merchant shall be deemed to be on notice not to solicit any person whose telephone number appears on the list. The list shall be made available to requesters either on a statewide or county by county basis;
(16) Making telephone solicitations to a person's residence at any time other than between 10 a.m.--9 p.m. local time, at the called person's location;
(17) Selling or making available for economic gain any information revealed during a telephone solicitation without the express written consent of the consumer;
(18) Making a telephone solicitation to any residential telephone using an artificial or prerecorded voice to deliver a message, unless the call is initiated for emergency purposes by schools regulated by the Kentucky Department of Education or the call is made with the prior express consent of the called party; or
(19) Engaging in any unfair, false, misleading, or deceptive practice or act as part of a telephone solicitation.
HISTORY: 2002 c 21, § 2, eff. 7-15-02; 1998 c 581, § 3, eff. 7-15-98
Legislative Research Commission Note (7-15-02): Under the authority of KRS 7.136, the Reviser of Statutes has corrected a clearly erroneous statutory reference in subsection (5) of this section as enacted in 2002 Ky. Acts ch. 21, sec. 2, by changing "KRS 367.46953" to "KRS 367.46963."
I identified no significant cases construing the act.
For additional information about starting a credit repair company in [STATE] contact your state or an attorney.
A BOND IS NOT REQUIRED IN KENTUCKY.
Kentucky credit repair businesses must be knowledgeable about the statute of limitation governing debt in Kentucky because this will guide your business decisions and enable you to best help your clients. The statue of limitations essentially limits the time that a creditor can legally sue a consumer for payments for a debt. Statutes of Limitation (SOL) do vary by state and debt type. In general, it is usually between 3 to 6 years, but sometimes longer.
To learn more about the statute of limitation laws for your state, click here.
We’re not aware of a state requirement for a “credit repair license” to operate a credit repair business in Kentucky. However, many find getting training and a certification useful because it:
The American Credit Repair Academy http://try.creditrepaircloud.com/academy/; offers training, resources, and credit repair certification
Use software to automate the tasks of a credit repair business in Kentucky:
All of this is available with Credit Repair Cloud
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Legal disclaimer: Our software products and resources offer credit information, not legal advice. We make every effort to ensure the accuracy of the information and to clearly explain your options. However, we do not provide legal advice (i.e.; the application of the law to your individual circumstances). For legal advice, please consult an attorney, your city or your state.