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A Quick Overview Of
Six
Major Consumer Credit Laws
This
is nothing more than a list of major, consumer-related credit laws as I
understand them. This is just an overview, there is much more
to
these laws than what is provided here. This information
is in no way to be considered legal advice of any kind.
Before applying any of the laws listed here to your own
situation, it is highly recommended that you do further research on
these laws, and consult an attorney if appropriate.
Truth
in Lending Act (1969):
Federal
law that mandates disclosure of information about the cost of credit.
Both the finance charge (i.e. all charges to borrow money, including
interest) and the annual percentage rate or APR (i.e. the percentage
cost of credit on a yearly basis) must be displayed prominently on
forms and statements used by creditors. The law provides
criminal
penalties for willful violators, as well as civil remedies.
It
also protects you against unauthorized use of your credit
card.
If it is lost or stolen, the maximum amount you have to pay is $50.
Fair Credit Reporting Act
(1971):
Federal
law that covers the reporting of debt repayment information.
It
establishes when a credit reporting agency may provide a report to
someone; states that obsolete information must be taken off (seven to
ten years); gives consumers the right to know what is in their credit
report; requires that both a credit bureau and information provider
(i.e. department store) have an obligation to correct wrong
information; gives consumers the right to dispute inaccurate
information and add a 100-word statement to their report to explain
accurate negative information; and gives consumers the right to know
what credit bureau provided the report when they are turned down for
credit.
Fair Credit Billing Act
(1975):
Federal
law that covers credit card billing problems. It applies to all
open-end credit accounts (i.e. credit cards and overdraft checking).
States that consumers should send a written billing error notice to the
creditor within 60 days (after receipt of first bill containing an
error), which the creditor must acknowledge within 30 days. The creditor
must investigate and may not damage a consumer's credit rating while a
dispute is pending.
Equal Credit Opportunity
Act (1975):
Federal
law that ensures that consumers are given an equal chance to receive
credit. Prohibits discrimination on the basis of gender,
race,
marital status, religion, national origin, age or receipt of public
assistance. Lenders cannot ask about your plans for having
children or refuse to consider consistently received alimony or child
support payments as income. If you are denied credit, you have a legal
right to know why.
Fair Debt Collection
Practices Act (1978):
Federal
law that prohibits debt collectors from engaging in unfair, deceptive
or abusive practices when collecting debts. Collectors must send a
written notice telling the name of the creditor and the amount owed;
collector may not contact consumer if he or she disputes in writing
within 30 days (unless collector furnishes proof of the debt);
collectors must identify themselves on the phone and can call only
between 8 am and 9 pm unless a consumer agrees to another time; and
collectors cannot call consumers at work if they are told not to.
Fair Credit and Charge Card
Disclosure Act (1989):
A
part of the Truth in Lending Act that mandates a box on credit card
applications that describes key features and cost (i.e. APR, grace
period for purchases, minimum finance charge, balance calculation
method, annual fees, transaction fees for cash advances and penalty
fees such as over-the-limit fees and late payment fees).
