Summary of Consumer Credit Laws
The Consumer Credit Protection Act, passed by Congress in 1968, is actually a series of laws designed to offer consumer protection in credit transactions. The main component Acts are as follows:
The Truth in Lending Act covers four major areas under its Regulation Z of the Federal Reserve System: disclosure, advertising, rescission (cancellation of a credit contract or agreement), and liability. Interest rates must be fully disclosed in writing and truthfully advertised; you have a right to cancel credit involving your home as security within three business days; and your liability as a credit card holder is limited to $50 per card in the use of unauthorized use or nothing if notification is made prior to its unauthorized use.
The Fair Credit Reporting Act (FCRA) covers operations of credit bureaus. It requires that credit bureaus investigate and correct errors in credit reports. If you are denied credit, you are entitled to review your file free of charge within 30 days. You also have a right to view your file anytime for a modest fee. Some bureaus will also supply you with a written report. The credit bureau must correct errors in your file.
The Equal Credit Opportunity Act (ECOA), passed in 1974 and amended in 1976, prohibits discrimination in granting credit on the basis of sex, marital status, race, religion, or age. The main provisions cover credit granting and credit reporting.
The Fair Credit Billing Act (FCBA) protects consumers' credit while challenges to incorrect billings are made. You must notify the creditor of any incorrect billing within 60 days of receipt of the bill in question. The creditor must acknowledge the complaint within 30 days and investigate and resolve it within 90 days. During the dispute period, payment is suspended; you cannot be billed for interest provided you do not owe the debt in question; and your credit report cannot be adversely affected.
The Fair Debt Collection Practices Act limits debt collectors (collection agencies) from harassing you and contacting you at inconvenient times and places. If you are represented by an attorney and tell this to the collector, all contacts must then be made through that attorney. You can stop a debt collector from contacting you by writing and telling them to stop. Once they receive this letter, they cannot legally contact you again except to inform you of a specific legal action being taken.
The Electronic Funds Transfer Act provides consumer protection in the new area of electronic banking. The Act covers new technologies such as automatic teller machines (ATMs), point-of-sale terminals, telephone transfers, and computer transactions. In case of unauthorized use of automatic teller cards, other debit cards, and mistakes in electronic transfer, the consumer's liability is limited to $50 only if the financial institution is notified within two business days. You can lose as much as $500 if you do not report within two days. If you do not report an unauthorized transfer that appears on your statement within 60 days, you risk unlimited loss.