Fair Credit Reporting Act
The Fair Credit Reporting Act promotes the accuracy and privacy of the data contained in the files of the credit reporting agencies. It protects your right to know what kind of information appears in your credit report and allows you to correct mistakes.
Under this law you have the following rights:
- Be advised if your credit report is used against you.
- Verify the data that are being reported on the credit report.
- Dispute the incorrect information with the credit bureaus. The information must be corrected or removed, usually 30 days after your claim. Credit bureaus should not disclose adverse information that is older than seven years old; for bankruptcy cases the limit is ten years.
- Access to your credit report is limited to: creditors, employers, insurers, and other businesses duly recognized by the CRA (Credit Reporting Agency). A client approval is required to provide a credit report to employers or prospective employers.
- You can request that your name be excluded from CRA lists for unsolicited credit and insurance offers.
- If your rights are violated, you may seek legal advice.
Under federal law, you are also entitled to a free copy of your credit report if a company has taken adverse action against you, such as denying credit, insurance or employment based on what is disclosed in your credit report, and you request it within 60 days of receiving notice of the adverse action. The notice will give you the name, address and telephone number of the consumer reporting company that provided the information.
The Fair Credit Reporting Act requires that, upon request, each of the national credit reporting agencies - Equifax, Experian and TransUnion - annually provide you a free copy your credit report. To order your credit report, visit www.annualcreditreport.com or call 1-877-322-8228. All parents who want to teach their children money management skills should properly handle their money themselves. This is where many well-meaning parents and mothers fail.
Fair Credit Billing Act
This law requires credit card companies to quickly correct billing errors in credit cards as well as in charge cards. However, there are certain actions you need to take to protect your rights.
If you find an error on your bill, immediately write a letter to the customer service department of the credit card company. The letter must reach the credit card company within 60 days of the error. You should include your name, credit card number and the amount of the mistake. Briefly describe the situation. Be sure to include a copy of the invoice as well as any related receipts. Make sure that you keep a copy of the letter and its attachments.
The credit card company must acknowledge receipt of your letter or correct the mistake within the next 30 days. If the credit card company rejects your claim, you may request for reconsideration within 90 days (or two billing cycles, whichever is the shortest time). During this period, the credit card company cannot report to the credit reporting agencies that the amount corresponding to the claim is outstanding. If your complaint is upheld, any interest that was charged on the claim amount must be removed.
The FCBA generally applies only to credit accounts, credit cards, department store accounts and overdraft accounts. It does not apply to loans or credit sales that have a fixed monthly payment, such as a car loan or a mortgage.
The error resolution procedures set forth by the FCBA only apply to the "billing errors." Following are some examples of applicable instances:
- Unauthorized charges. Federal law limits your liability for these charges to $50.
- Charges with an incorrect date or amount posted.
- Charges for goods and services you did not accept or were not delivered or provided as agreed.
- Failure to register payments or other credits on your account, such as returns.
- Failure to mail bills to your home – as long as you notified your creditor in writing of your change of address at least 20 days prior to the end of the billing cycle.
- Charges for which you requested an explanation or written proof of purchase.
What happens while my bill is in dispute?
While the investigation is going on, you can withhold payment of the disputed amount (and the related charges). You must pay the rest of the bill, including the finance charges corresponding to the amount that is not in dispute.
During the investigation, the creditor cannot take any legal action or attempt to collect the disputed amount (including finance charges). They cannot close or restrict the use of your account, but the amount in dispute can be deducted from your credit limit.
Will it affect my credit rating?
While the bill is in dispute, the creditor may not threaten to harm your credit rating or report you as delinquent. However, the creditor may report that you are challenging or disputing the validity of your bill. You cannot be denied credit just because you are disputing a bill.
What if the bill is wrong?
If your bill contains an error, the creditor must explain in writing the corrections to be made on your account. In addition to crediting your account, the creditor must remove all finance charges, late fees or other charges associated with the billing mistake.
If the creditor determines that you owe a portion of the disputed amount, you must obtain an explanation in writing. You may request a copy of the documents proving that you owe the alleged amount.
Equal Credit Opportunity Act
The Equal Credit Opportunity Act prohibits credit discrimination based on sex, race, marital status, religion, ethnic origin, age, or receipt of public assistance. Creditors may ask for this information (except religion) in certain situations, but cannot use it to discriminate when deciding whether to grant credit.
This law protects consumers who deal with companies that regularly extend credit. Everyone involved in the decision to grant credit, including real must obey this law. Companies or businesses applying for credit also are protected by this law.
Your rights under the Equal Credit Opportunity when you apply for credit are:
• They cannot discourage you from applying or reject your application on the basis of race, color, religion, national origin, sex, marital status, age, or just because all or part of your income comes from a public assistance program.
• They cannot take into account your race, national origin, or sex, although you may be asked to provide this information voluntarily.
• They cannot impose different terms and conditions based on your race, color, religion, national origin, sex, marital status, age or just because all or part of your income comes from a public assistance program.
• They cannot ask if you are widowed or divorced. Credit grantors can only use the following terms: married, unmarried or separated.
• They cannot ask your marital status when you apply for a separate, unsecured account.
• They cannot ask about your spouse, except: If your spouse is applying jointly, if your spouse is authorized to use the account, if you depend on your spouse's income or on alimony or child support income from a former spouse, or if you live in a community property state.
• They cannot ask about your family planning methods.
• They cannot ask if you receive alimony or child support, unless previously told that you are not required to provide this information if you do not depend on that income to get credit.
In deciding whether to grant credit, creditors cannot:
Take into consideration your race, color, religion, national origin, sex, marital status or the fact that you are a participant of a public assistance program.
Take into consideration your age, except if you are too young to sign contracts or are at least 62 years old and the credit grantor extended you more favorable terms because of your age.
Use age as a basis to define other factors important to establish your creditworthiness.
Take into consideration if you have a phone account in your name; however, they can ask if you have a phone.
Take into consideration the racial composition of the neighborhood where you want to buy, refinance, or improve a house with the borrowed funds.
When evaluating your income, credit grantors cannot:
• Refuse to consider reliable income from a public assistance program in the same way as other income.
• Undervalue income based on your sex or marital status.
• Undervalue or refuse to consider income because it comes from a part-time job, Social Security or from pensions or annuities.
• Refuse to take into account regular payments of alimony, child support or separate maintenance, but they can ask for proof that you receive these payments on a consistent basis.
• Open credit by using your maiden name, or under your married name, or under the combined maiden and married names.
• Get a loan without a co-signer, provided you meet the creditor's policy.
• Use a co-signer that is not your spouse, if it is required.
• Maintain your own accounts after you change your name, marital status, reach a certain age or after retirement, unless the credit grantor has evidence that you have no intention or ability to pay.
• Know whether your credit application was accepted or rejected within 30 days of submitting a complete application.
• Know the reasons for the rejection of your application.
• Knowing the specific reasons for why you are being offered less favorable terms than you requested.
Some tips for women:
A good payment history is typically required in order to obtain credit. Some married, separated, divorced or widowed women are in a disadvantage because they do not have a credit history under their own name – either they lost it upon marriage or their creditors have been reporting the account under their spouse's name.
If you are married, separated, divorced or widowed, contact each of the major national credit reporting agencies to ensure that all relevant credit-related information is properly displayed under your name.
What to do if you suspect you have been discriminated against:
• Complain to the credit grantor.
• Consider suing the credit grantor in a federal district court. If you win the lawsuit, you may be eligible to receive compensation for damages, and if the court finds that the behavior of the credit grantor was deliberate, you can also request an amount for punitive damages.
• Report breach of this law to the appropriate government agency.
To report violations of the ECOA you may contact: Federal Trade Commission by phone: 1-877-FTC-HELP (1-877-382-4357); TDD: 1-866-653-4261, or visit the website: www.ftc.gov.
We are all responsible for the timely payment of our debts, but sometimes there are circumstances beyond our control that prevent us from complying with all of the provisions. You must keep in mind that if your payment is late, you may be contacted by a debt collector.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is a federal law enacted for the protection of the rights of the consumers against illegal debt collection practices. According to this Act, a creditor or the collection agency that acquired the debt owed to the original creditor has the legal right to collect the debt from you.
This law establishes guidelines for the collection of the debt and clearly lists the regulations as well the unfair practices. As a consumer, you have several rights in spite of owing money.
The following are your rights as a consumer with debts that have been referred to a collector:
• Refuse to take the call.
• Hang up the phone.
• Answer the call to request no further calls and to collect in writing from now on.
• Send a letter to request no further calls.
• Tell them not to call at inconvenient times.
• Ask them to call at a specific time.
• Tell them not to call your workplace.
• Asking for evidence of the debt.
• Requesting them to contact your lawyer.
• Submit a cease and desist letter to halt further communication.
• You may pursue legal action if they violate your rights.
The law states that:
• Debt collectors may only contact you between 8 AM and 9 PM.
• Debt collectors may not contact you at work if they know your employer objects.
• Debt collectors may not harass, oppress, or abuse you.
• Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.
• Debt collectors must identify themselves to you over the phone.
• Debt collectors must stop contacting you if you request so in writing.
Electronic Funds Transfer Act
The Electronic Funds Transfer Act (EFTA) establishes the rights, obligations, and responsibilities that creditors and consumers have when funds are transferred electronically, such as transactions that are carried out with ATM cards or debit cards, over the phone or via computer. This law limits your liability if your debit card is lost or stolen.
Under EFTA, creditors must provide:
• Clear, written information about the services provided when a client opens an account.
• Access to the electronic funds transfer accounts, usually by using an ATM card or a debit card.
• Notification if the conditions of the account change, such as higher fees, consumer liability increase, or more stringent limits on the frequency or amount of transfers.
• Transaction receipts for ATMs, including information such as the date of transaction, the type and amount of the transaction, and the location of the ATM.
• A monthly statement that provides a breakdown of the transactions that were processed during that period, the account number, fees that were charged, account balance, and an address and phone number for inquiries.
The following are the responsibilities of the consumers:
• If your credit card or debit card are lost or stolen, you must report the loss to the bank no later than two days after realizing this.
• If you lose your ATM card and notify the bank within two days, then you would only be liable up to $50 of any unauthorized transfers made with your card. If you fail to notify the bank within two days, you may be liable for up to $500, but no more.
If you discover an error or an unauthorized transfer in your statement, you have 60 days from the date the statement was sent to you to notify the bank about the problem so they can take care of it.
Credit Card Act
Credit cards can be expensive. There are many consumers who regularly use them. With the implementation of this law consumers can rest assured that they will be more protected; however, credit cards should still be used with caution.
The Credit Card Act states that lenders cannot raise interest rates during the 12-month period following the opening of an account, except under the following circumstances:
• If the credit card has a variable interest rate.
• If you are late by more than 60 days in the payment.
• If you do not comply with the payment agreement reached with your lender.
The introductory interest rate must remain fixed for at least six months. Afterward, the rate may rise according to what is specified in the contract.
If interest rates are to be raised, lenders are required to warn the consumer 45 days in advance. When there is a change in the terms of the contract, you have the option to cancel the card. You must be very careful, as the lender may close your account and increase your monthly payment.
Credit card companies are not required to send you the 45-day advance notification if:
• The card has a variable interest rate.
• The introductory rate period expired and has risen to a predetermined level.
• You did not comply with the payment agreement reached with your lender.
Your bill discloses the time it would take you to pay off your debt if you only send the minimum payment each month. It also indicates the payment that you would need to send each month if you wanted to fully repay the debt within three years.
If you want your lender to approve transactions that exceed you credit limit, you will be need to request this in advance. Otherwise, such transactions will be rejected. This is to prevent credit card companies from charging special fees to consumers who exceed their credit line.
Some costs that increased with this law are:
• New inactivity charges.
• Increased fees for minimum finance charges.
• Higher late payments fees.
• Higher rates in foreign transactions.
• Additional charges for transfers and cash advances.
• Higher or new annual fees.
Under this law, creditors must provide their clients a list of credit counseling agencies that can provide guidance to help them deal with their financial problems. CONSUMER has certified counselors who can present you alternatives if you are facing problems in paying your credit cards. For specific questions about your credit card, interest rates, or if you are interested in filing a complaint, you should directly contact your lender.
It is essential to regularly review your credit card invoice and your bank (or credit union) statement. These documents may contain mistakes that could harm your credit history or reflect improper charges or transfers. If you find an error or discrepancy, immediately notify the lender and dispute the error.
The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) establish procedures for resolving billing errors and inaccuracies in the electronic transfer of funds, including:
• charges or electronic fund transfers that you or any other authorized account user did not realize
• charges or electronic fund transfers that are incorrectly identified or reflect a wrong amount or date
• mathematical errors
• failure to properly post payments, credits, or electronic fund transfers
• failure to send your billing statements to your current place of residence, if you recently moved, provided that you duly notified your creditor in writing at least 20 days before the end of the billing period
• charges or electronic fund transfers for which you request proof, due to the fact that you do not recognize said transactions
The FCBA generally only applies to open-end accounts, including credit cards, revolving charge accounts (such as department store accounts), and overdraft checking. It does not apply to loans or credit, which are paid according to a fixed schedule until the entire amount is repaid. The EFTA applies to electronic fund transfers, such as those involving automatic teller machines (ATMs), debit transactions at point-of-sale, and other electronic banking transactions.
For more information, visit http://www.consumer.ftc.gov/topics/credit-and-loans
Your Debts and Debt Collectors
You are responsible for the timely payment of your debts. If you fall behind in repaying your creditors or an error is made on your account, you may be contacted by a debt collector. A debt collector is any person other than the creditor, who regularly collects debts owed to others. This includes lawyers who collect debts on a regular basis. You are entitled to be treated fairly by debt collectors.
The Fair Debt Collection Practices Act (FDCPA) applies to personal, family, and household debts. This includes money owed on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts. Under the Fair Debt Collection Practices Act (FDCPA):
• Debt collectors may contact you only between 8 AM and 9 PM.
• Debt collectors may not contact you at work if they know your employer disagrees.
• Debt collectors may not harass, oppress, or abuse you.
• Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.
• Debt collectors must identify themselves to you on the phone.
• Debt collectors must stop contacting you if you request them in writing.
Solving credit problems
Your credit report affects your purchasing power, as well as your chances of finding a job, renting or buying an apartment or a house, and getting insurance. When correct adverse information appears on your credit report, only the passage of time can ensure its removal. A credit reporting agency can report accurate adverse information on your credit report for seven years, and bankruptcy for 10 years. Information on a legal judgment against you that you did not pay can be reported for seven years or until the statute of limitations has passed, whichever comes later. There is no time limit for the reporting of the records of a criminal conviction, information reported in response to a request for a job that pays more than $75,000 a year, and information reported because you've applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the period of seven years during which correct adverse information may appear in your report. Generally, the seven-year period begins to run starting on the date in which the event occurred.
If you are having trouble paying your bills, immediately contact your creditors. Propose to them a repayment plan that reduces your cash disbursement to a more manageable level. Do not wait until your account has been turned over to a debt collector.
Here are some additional tips for solving credit problems:
• If you want to dispute the accuracy of a credit report, an invoice or the denial of a credit application, contact the corresponding company in writing by sending a certified letter with return receipt requested.
• When challenging a billing mistake, include your name, account number, dollar amount in question, and the reason why you believe that your bill is wrong.
• If you are still in doubt, request for a verification of the debt in writing.
• Keep all of your original documents, especially receipts, sales invoices and billing statements. You will need them if you dispute a credit bill or statement. Only send copies. It may take more than one letter to correct the problem.
• Be skeptical of businesses that promise instant solutions to credit-related situations.
• Be persistent. Resolving credit problems can take a lot of time and effort of your part.
• There is nothing a credit repair company can do for you for a fee that you could have done yourself at a very low cost or no cost at all.
If you are not disciplined enough to create a workable budget, to negotiate a repayment plan with your creditors, or to control the bills that you receive and start piling up, consider contacting a credit counseling agency. Many of these organizations are nonprofit and will provide options to deal with your financial problems. But not all of them are reputable. Also, just because an organization claims to be nonprofit does not guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, or hide the real costs of their services by not openly disclosing that the clients' first payment is not disbursed to their creditors. They also pressure their clients to make voluntary contributions that only worsens their situation.
Various credit counselors provide their services in person, via Internet, or by telephone. If possible, seek agencies that provide one-on-one counseling. Many universities, military bases, credit unions, housing authorities, and branches of the US Cooperative Extension Service oversee nonprofit credit counseling programs. Your financial institution, local consumer affairs department, friends, or your relatives may be a good information source that could lead you to reputable companies.
Serious credit counseling organizations can advise you on how to manage your money and debt, help you prepare a budget, and provide free educational information. Counselors are trained and certified in the areas of credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, and often entail follow up sessions.