Under
the Truth in Lending Act, Title 1 of the Consumer Credit Protection
Act. The main purpose of this law is to assure meaningful disclosure
of consumer credit and lease terms, including those in advertisements,
so that consumers can easily compare terms and shop wisely for credit.
All lending institutions are required to comply with this law when
advertising "consumer credit". If Advertisers of consumer
credit and consumer leases do not comply with this law they may
be subject to law enforcement actions by the Federal Trade Commission.
In addition, anyone actually harmed by a non-complying company may
sue for actual damages, 25% of the total amount of monthly payments
under the lease (not less than $100 or more than $1000); also court
cost and reasonable attorney fees. The following must be disclosed:
What
the annual percentage rate (APR) is on you loan
·
The length of the loan
· Total cost of the loan
· When the payments are due and the amounts of payment
· What are the charges for late payment
· Are there any prepayment penalties?
· What collateral is assigned to the loan if any
· The cost of other miscellaneous items, such as credit card
insurance
Also,
the Truth in Lending Act sets regulations of finance companies that
issue credit cards. An amendment, which prohibits the issuance of
UN-requested credit cards, was added to the law in 1970. In addition,
the bill limits the liability for cardholders who have been victims
to unauthorized use of their cards to just $50.
THE
FAIR CREDIT REPORTING ACT
The
Fair Credit Reporting Act became effective on April 25th, 1971.
The Act sets certain guidelines which Credit Bureaus and Creditors
must follow when reporting a consumers credit history. Credit Bureaus
must function within this law. The Act gives consumer certain rights
and protects the consumers privacy. This Act provides a legal precedence
to appeal the denial of credit, which could be the refusal of insurance,
or conflicts in the employment process and a loan. Under this law
you are entitled to:
Gives
you the right to the information on your credit file (except medical
records)
To
be accompanied by your spouse or a friend when you go in person
to the credit bureau to receive your credit report
To
get your credit file for free when you have been turned down for
credit, insurance or employment in the last 30 days
To
know who have received a consumer credit report on you
To
have inaccurate, erroneous, out dated and obsolete information
investigated or reinvestigated unless the request is frivolous
To
have adverse information deleted after seven years (except bankruptcy
which remains 7 to 10 years)
To
sue a credit reporting agency for damages, for willful noncompliance
or violating the law. If you win, you can collect attorney fees
and court cost, plus punitive damages
To
withhold your file from any business or company that are not legitimate
To
a 100-word consumer statement in order to supplement your credit
history from the negative information. This is done if a dispute
cannot be resolved. This is your side of the story.
To
get the names and addresses of the credit-reporting agency responsible
for preparing a consumer report, which was use to deny you credit,
insurance or employment
THE FAIR
DEBT COLLECTION PRACTICES ACT
The
Fair Debt Collection Practices Act sets certain guidelines for Collection
Agencies about what they can and cannot do when trying to collect
a debt. This law protects consumers from being harassed by bill
collectors. This law applies to anyone who is in the business of
collecting debts, any creditor who uses a name other than his own
and anyone who collects debts from another person or attempts to
collect. The Act does not apply to banks, lenders or businesses
that collect their own accounts under their own names. The Federal
Trade Commission (FTC) is the enforcement agency that oversees this
law. So if you have a complaint against a collection agency, file
your complaint with the FTC within 30 days of the violation; also
file one with Attorney General in your State. Noncompliance with
this law can result in the collector being sued by the debtor (you)
for damages, punitive damages up to $10,000, court cost and attorney
fees. If you choose to sue, you have up to 1 year to do so from
the date of your compliant.
Under this law, collection agencies cannot do
the following:
Use abusive or profane language or
behavior.
Cannot harass, oppress or abuse any
person, threaten violence or harm property or reputation when
trying to collect a debt
Cannot use the telephone to annoy,
by calling and hanging up, calling and not identifying themselves
Make you pay for any of their calls
(no collect calls)
Cannot call the debtors home during
inconvenient hours unless the debtor gives permission to do
so
Cannot publish or advertise a list
of people who owe money, this includes postcards in the mail
Call or visit you at your place of
employment, unless allowed by your employer
Write to anyone other than the person
who owes the money, or an attorney
Use a name that is not theirs in order
to fool you, misrepresenting themselves as a governmental agency
or any other firm
Cannot continue to contact debtor after
being told not to
Threaten a law suit unless they really
plan to do so.
THE
EQUAL CREDIT OPPORTUNITY ACT
The
Equal Credit Opportunity Act Title VII of the Consumer Credit Protection
Act was enacted by congress to eliminate discrimination against
women and minorities who are trying to procure credit. The law requires
creditors to apply the same standard of "credit worthiness"
equally to all applicants (it does not give you the right to automatic
credit) The entire bill prohibits discrimination on the basis of
race, color, religion, nationality, age and receiving public assistance.
Creditors
cannot ask about your plans for parenthood
When applying for an unsecured separate account, the creditor cannot
ask about your marital status, unless you live in a community property
State (Arizona, California, Idaho, Louisiana, New Mexico, Texas,
Washington and Nevada) you do not have to choose a courtesy title
such as, Miss, Ms, or Mrs. on a credit application
Creditors cannot use unfavorable information about a spouse or former
spouse when deciding to extend you credit
Creditors may ask about alimony and child support only if the applicant
believes that supplying this information will increase the chances
of loan approval
The creditor has the right to inquire as to how many dependents
you have in order to ascertain your spendable income, providing
he ask this of everyone
If there is a change in women's marital status (divorced, widowed,
separated or legally changes her name) the creditor cannot automatically
require her to reapply for an existing loan. The only exception
is if there is a problem with a loan where a former husband's income
had been taken into consideration at the time the loan was approved.
When denied credit, you must be informed in writing, the name and
address of the agency administering compliance or which credit bureau
they used and the specific reason for the denial. Also, a disclosure
of the applicants right to a statement of the reasons must be included.
If your salary or income is enough to warrant the loan, the lender
cannot ask you to get a cosigner
The
Credit Practices rule prohibits lenders from using certain remedies,
such as confessions of judgment; wage assignments; and non-possessor,
non-purchase money, security interests in household goods. The rule
prohibits lenders from misrepresenting a cosigner's liability and
requires that lenders provide cosigners with a notice explaining
their credit obligation as a cosigner. It also prohibits the pyramiding
of late charges. Supplement to the law on page 122-23.
(LAW NOT PROVIDED IN GUIDE)
THE FAIR CREDIT
& CHARGE CARD DISCLOSURE ACT
The
Fair Credit and Charge Card Disclosure Act requires new disclosures
on credit and charge cards, whether issued by financial institutions,
retail stores or private companies. Information such as APR's, annual
fees and grace periods must be provided in tabular form along with
applications and pre-approved solicitations for cards. The regulations
also require card issuers that impose an annual fee to provide disclosure
before annual renewal. Card issuers that offer credit insurance
must inform customers of any increase in rate or substantial decrease
in coverage should the issuer decide to change insurance providers.
Seepage148or www.law.cornell.edu/uscode/15
THE FAIR CREDIT
BILLING ACT
According
to the Fair Credit Billing Act, it requires fast action on the part
of creditors and lenders when billing errors occur in the consumers
billing statements. You are protected from:
Charges
made by unauthorized user of your credit cards
Charges
incorrectly identified by amount or date of purchase
Charges
for goods or service not accepted or not delivered as originally
agreed upon
Failure
to accurately reflect payments, returns or other credit to your
account
Bills
delivered to the incorrect address, particularly those that have
accumulated when a change of address card was properly filed
The
right to withhold money on any balance due on defective merchandise
or service from use of a credit card
If
you believe your bills are inaccurate, This is what to do and what
will happen in the process:
1. Contact the creditor within 60 days of the error in writing and
include in the letter your name, account number and the amount,
which you believe is in error. Explain why you believe there is
a mistake.
2. Be sure to send the letter to the special address for billing
inquiries
3. Put your letter in a separate envelope from your payment, mail
it certified mail
4. While waiting for a response, you don't have to pay any charges
on the questionable amount. But you do have to pay the current correct
charges.
5. Your account must be corrected or you must be informed why the
creditor believes the bill is correct within 90 days.
6. If the creditor made a mistake you will not be charged finance
fees. If no error was found, you do have to pay accumulated finance
charges and the amount due.
7. Not Happy! You have 10 days to respond before the creditor imposes
additional finance charges or other charges.
The Federal
Trade Commission enforces a variety of federal antitrust and consumer
protection laws. The Commission seeks to ensure that the nation's
markets function competitively, and are vigorous, efficient, and free
from undue restrictions. The Commission also works to enhance the
smooth operation of the marketplace by eliminating acts or practices
that are unfair or deceptive. In General, the Commission's efforts
are directed toward stopping actions that threaten consumers' opportunities
to exercise informed choice. Complaints from consumers about creditors,
collection agencies, credit bureau's and other companies under the
consumer protection laws are filed with the FTC.
One
of the divisions of the FTC that mostly concerns consumers is the
Division of credit practices-Bureau of Consumer Protection. The Division
of credit practices enforces many of the nation's consumer credit
statutes, including:
The
Equal opportunity Act- which prohibits
credit discrimination on the basis of sex, race, martial status,
religion, national origin, age, or receipt of public assistance.
The
Fair Credit Reporting Act-, which insures the accuracy and privacy
of information, kept by credit bureaus and consumer reporting agencies.
It give consumers the right to know what information credit bureau's
and consumer reporting agencies are distributing about them to creditors,
insurance companies, and employers
The
Truth in lending Act- which requires creditors to disclose in
writing certain cost information, such as the annual percentage
rate (APR), before consumers enter into credit transactions
The
Fair Credit Billing Act-and The Electronic Fund Transfer Act-
which establish procedures for resolving mistakes on credit card
and fund transfer accounts (ATM)
The
Fair Debt Collection Practices Act- which prohibits debt collectors
from engaging in unfair, deceptive, or abusive practices, including
over charging, harassment, and disclosing consumer debts to third
parties. Other laws include:
The
Credit practices Rule and The Fair Credit and Charge Card disclosure
Act.
THE FEDERAL TRADE COMMISION
ADDRESSES & PHONE NUMBERS
