The president and CEO of the American Financial Services Association said credit repair scams are harming consumers and increasing fraud risks as Congress prepares to examine financial crime affecting lenders and borrowers nationwide.
“We are focused on credit repair scams because these predatory companies rip off their clients, who spend thousands of dollars thinking these companies will help them, but in the end have nothing to show for the money they could ill-afford to spend in the first place,” said Celia Winslow, AFSA's president and CEO, told Federal Newswire.
“Moreover, credit repair scams contribute to the multi-billion dollar fraud problem confronting the vehicle finance industry,” she said. “And lastly, these scammers create a regulatory tsunami of phony credit reporting complaints, making it challenging for creditors to spot and respond to real complaints as quickly as possible. Credit repair scams have a price, and all of us can end up paying for it.”
AFSA also urged lawmakers to focus on financial fraud ahead of a U.S. House Financial Services Committee hearing examining challenges facing financial institutions and consumers. In a Feb. 27 statement, the organization said rising fraud and affordability concerns are increasing costs for Americans and forcing lenders to invest heavily in prevention efforts.
The group highlighted automated credit repair services that generate large volumes of duplicative credit disputes, arguing that consumers often pay thousands of dollars for services that provide little value while creating regulatory costs tied to processing fraudulent complaints.
AFSA supports bipartisan legislation known as the Ending Credit Repair Scams Act (ESCRA), which aims to protect consumers from companies that promise to rebuild credit histories while charging recurring fees without delivering meaningful results, according to the organization.
Founded in 1916, AFSA represents consumer credit providers, including vehicle finance companies, and advocates for responsible lending policies and consumer protections across the financial services industry.
