To amend the Credit Repair Organizations Act to clarify the applicability of certain provisions to credit monitoring services, and for other purposes.

Summary: Credit Monitoring Clarification Act - Amends the Credit Repair Organizations Act to cite conditions under which provision to a consumer of credit reports, credit score analysis, and assistance in a case of identity theft shall not be considered as an activity to improve a consumer's credit status, which is subject to regulation under such Act.

Exempts from regulation under such Act any person (credit repair organization, or CRO) representing that it can modify or remove, or assist the consumer in modifying or removing, any information in the consumer's credit report if the CRO gives clear and conspicuous notice, before the consumer pays or agrees to pay it, that: (1) neither the consumer nor anyone else has the right to have accurate and current information removed from a credit report; and (2) the consumer has the right to dispute any inaccurate information by contacting the credit bureau directly. Requires a CRO, to qualify for this exemption from regulation, also to give the consumer, before payment or agreement to pay, a specified disclosure entitled "Your Rights Concerning Your Consumer Credit File."

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Monitoring Clarification 
Act''.

SEC. 2. CLARIFICATION RELATING TO CREDIT MONITORING SERVICES.

    (a) In General.--Section 403 of the Credit Repair Organizations Act 
(15 U.S.C. 1679a) is amended--
            (1) by striking ``For purposes of this title'' and 
        inserting ``(a) In General.--For purposes of this title''; and
            (2) by adding at the end the following new subsection:
    ``(b) Clarification With Respect to Certain Credit Monitoring 
Services Under Certain Circumstances.--
            ``(1) In general.--Subject to paragraph (2), the following 
        shall not be considered activities described in clause (i) of 
        subsection (a)(3)(A):
                    ``(A) The provision of, or provision of access to, 
                credit reports, credit monitoring notifications, credit 
                scores and scoring algorithms, and other credit score-
                related tools to a consumer (including generation of 
                projections and forecasts of such consumer's potential 
                credit scores under various prospective trends or 
                hypothetical or alternative scenarios).
                    ``(B) Any analysis, evaluation, and explanation of 
                such actual or hypothetical credit scores, or any 
                similar projections, forecasts, analyses, evaluations 
                or explanations.
                    ``(C) In conjunction with offering any of the 
                services described in subparagraph (A) or (B), the 
                provision of materials or services to assist a consumer 
                who is a victim of identity theft.
            ``(2) Conditions for application of paragraph (1).--
        Paragraph (1) shall apply with respect to any person engaging 
        in any activity described in such paragraph only if--
                    ``(A) the person does not represent, expressly or 
                by implication, that such person--
                            ``(i) will or can modify or remove, or 
                        assist the consumer in modifying or removing, 
                        adverse information that is accurate and not 
                        obsolete in the consumer's credit report; or
                            ``(ii) will or can alter, or assist the 
                        consumer in altering, the consumer's 
                        identification to prevent the display of the 
                        consumer's credit record, history, or rating 
                        for the purpose of concealing adverse 
                        information that is accurate and not obsolete;
                    ``(B) in any case in which the person represents, 
                expressly or by implication, that it will or can modify 
                or remove, or assist the consumer in modifying or 
                removing, any information in the consumer's credit 
                report, except for a representation with respect to any 
                requirement imposed on the person under section 611 or 
                623(b) of the Fair Credit Reporting Act, the person 
                discloses, clearly and conspicuously, before the 
                consumer pays or agrees to pay any money or other 
                valuable consideration to such person, whichever occurs 
                first, the following statement:
                            ```NOTICE: Neither you nor anyone else has 
                        the right to have accurate and current 
                        information removed from your credit report. If 
                        information in your report is inaccurate, you 
                        have the right to dispute it by contacting the 
                        credit bureau directly.''';
                    ``(C) the person discloses, clearly and 
                conspicuously, to the consumer the following 
                statement--
                            ``(i) in writing; and
                            ``(ii) except as provided in subparagraph 
                        (D), before the consumer pays or agrees to pay 
                        any money or other valuable consideration to 
                        such person, whichever occurs first:
                    ```Your Rights Concerning Your Consumer Credit File
                    ```You have a right to obtain a free copy of your 
                credit report once every 12 months from each of the 
                nationwide consumer reporting agencies. To request your 
                free annual credit report, you may go to 
                www.annualcreditreport.com, or call 877-322-8228, or 
                complete the Annual Credit Report Request Form and mail 
                it to: Annual Credit Report Request Service, P.O. Box 
                105281, Atlanta, GA 30348-5281. You can obtain 
                additional copies of your credit report from a credit 
                bureau, for which you may be charged a reasonable fee. 
                There is no fee, however, if you have been turned down 
                for credit, employment, insurance, or a rental dwelling 
                because of information in your credit report within the 
                preceding 60 days. The credit bureau must provide 
                someone to help you interpret the information in your 
                credit file. You are entitled to receive a free copy of 
                your credit report if you are unemployed and intend to 
                apply for employment in the next 60 days, if you are a 
                recipient of public welfare assistance, or if you have 
                reason to believe that there is inaccurate information 
                in your credit report due to fraud.
                    ```You have the right to cancel your contract with 
                a credit monitoring service without fee or penalty at 
                any time, and if you have prepaid for more than one 
                month of a credit monitoring service, you will receive 
                a pro rata refund if you cancel.
                    ```The Federal Trade Commission regulates credit 
                bureaus and credit monitoring services. For more 
                information contact:
                    ```Federal Trade Commission
                    ```Washington, D.C. 20580
                    ```1-877-FTC-HELP
                    ```www.ftc.gov.''';
                    ``(D) in the case where a consumer pays or agrees 
                to pay for the service during a telephone call, an in-
                person conversation or other oral communication, the 
                person discloses to the consumer the following 
                statements:
                            ``(i) during the telephone call, in-person 
                        conversation or other oral communication and 
                        before the consumer pays or agrees to pay for 
                        the service, whichever occurs first--
                                    ``(I) you have a right to obtain a 
                                free copy of your credit report once 
                                every 12 months from each of the 
                                nationwide consumer reporting agencies;
                                    ``(II) if the contract is for a 
                                credit monitoring service, the 
                                following additional statement: `You 
                                may cancel the credit monitoring 
                                service without fee or penalty at any 
                                time'; and
                                    ``(III) if the consumer is billed 
                                for a credit monitoring service on 
                                other than a monthly basis, the 
                                following additional statement: `You 
                                will receive a pro rata refund if you 
                                cancel'; and
                            ``(ii) within 30 days of the telephone 
                        call, in-person conversation or other oral 
                        communication, the written statement provided 
                        for in subparagraph (C); and
                    ``(E) in any case in which the person offers a 
                subscription to a credit monitoring program to a 
                consumer--
                            ``(i) the consumer may cancel the credit 
                        monitoring service at any time upon written 
                        notice to the person without penalty or fee for 
                        such cancellation; and
                            ``(ii) in any case in which the consumer is 
                        billed for the credit monitoring service on 
                        other than a monthly basis, the person shall 
                        make a pro rata refund to the consumer of any 
                        fee prepaid by the consumer. The pro rata 
                        refund shall be calculated from the date that 
                        the person receives the consumer's notice of 
                        cancellation until the end of the period. The 
                        person shall issue the refund required under 
                        this subparagraph to the consumer within 60 
                        days of receipt of the consumer's notice of 
                        cancellation.''.
    (b) Clarification of Nonexempt Status.--Section 403(a) of the 
Credit Repair Organizations Act (15 U.S.C. 1679a) (as so redesignated 
by subsection (a) of this section) is amended, in paragraph (3)(B)(i), 
by inserting ``and is not for its own profit or for that of its 
members'' before the semicolon at the end.
    (c) Revision of Disclosure Requirement.--Section 405(a) of the 
Credit Repair Organizations Act (15 U.S.C. 1679c) is amended by 
striking everything after the heading of the disclosure statement 
contained in such section and inserting the following new text of the 
disclosure statement:
    ``You have a right to dispute inaccurate information in your credit 
report by contacting the credit bureau directly. However, neither you 
nor any `credit repair' company or credit repair organization has the 
right to have accurate, current, and verifiable information removed 
from your credit report. The credit bureau must remove accurate, 
negative information from your report only if it is over 7 years old. 
Bankruptcy information can be reported for 10 years.
    ``You have a right to obtain a free copy of your credit report once 
every 12 months from each of the nationwide consumer reporting 
agencies. To request your free annual credit report, you may go to 
www.annualcreditreport.com, or call 877-322-8228, or complete the 
Annual Credit Report Request Form and mail it to: Annual Credit Report 
Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can 
obtain additional copies of your credit report from a credit bureau, 
for which you may be charged a reasonable fee. There is no fee, 
however, if you have been turned down for credit, employment, 
insurance, or a rental dwelling because of information in your credit 
report within the preceding 60 days. The credit bureau must provide 
someone to help you interpret the information in your credit file. You 
are entitled to receive a free copy of your credit report if you are 
unemployed and intend to apply for employment in the next 60 days, if 
you are a recipient of public welfare assistance, or if you have reason 
to believe that there is inaccurate information in your credit report 
due to fraud.
    ``You have a right to sue a credit repair organization that 
violates the Credit Repair Organizations Act. This law prohibits 
deceptive practices by credit repair organizations.
    ``You have the right to cancel your contract with any credit repair 
organization for any reason within 3 business days from the date you 
signed it.
    ``Credit bureaus are required to follow reasonable procedures to 
ensure that the information they report is accurate. However, mistakes 
may occur.
    ``You may, on your own, notify a credit bureau in writing that you 
dispute the accuracy of information in your credit file. The credit 
bureau must then reinvestigate and modify or remove inaccurate or 
incomplete information. The credit bureau may not charge any fee for 
this service. Any pertinent information and copies of all documents you 
have concerning an error should be given to the credit bureau.
    ``If the credit bureau's reinvestigation does not resolve the 
dispute to your satisfaction, you may send a brief statement to the 
credit bureau, to be kept in your file, explaining why you think the 
record is inaccurate. The credit bureau must include a summary of your 
statement about disputed information with any report it issues about 
you.
    ``The Federal Trade Commission regulates credit bureaus and credit 
repair organizations. For more information contact:
    ``Federal Trade Commission
    ``Washington, D.C. 20580
    ``1-877-FTC-HELP
    ``(877-382-4357)
    ``www.ftc.gov.''.
    (d) Effective Date.--Section 403(b)(2)(E) of the Credit Repair 
Organizations Act shall take effect upon the enactment of this Act. The 
requirements for written disclosures under sections 403(b)(2)(B), 
403(b)(2)(C) and 403(b)(2)(D), as applicable, shall take effect 90 days 
after enactment of this Act.
    (e) Disclosure Updates.--The written disclosures required under 
section 403(b)(2)(D) and section 405(a) of the Credit Repair 
Organizations Act (15 U.S.C. 1679 et seq.) (as amended by this Act) 
shall, if any changes are made to the centralized source contact 
information for obtaining a free credit report, be updated by the 
parties distributing the disclosures.