Consumer Credit Law

Truth In Lending Act (enacted in 1968) – Requires creditors to provide consumers with accurate and complete credit costs and terms.

Fair Credit Reporting Act (enacted in 1970) –Ensures the information contained in a credit report is accurate and will be used in a confidential manner. Consumers have the right to dispute any information, which may be derogatory or erroneous. Inaccurate information must be corrected or deleted and a consumer explanation statement of 100 words or less can be included in the report. A credit bureau must also delete adverse information, which is more than 7 years old and information on bankruptcy, which is more than 10 years old.

Equal Credit Opportunity Act (enacted in 1974)– Prohibits a creditor from discriminating against a consumer on the basis of age, sex, marital status, reliance on income from a public assistance program, race, color, religion or national origin.

Fair Credit Billing Act (enacted in 1974) – Applies to overdraft checking, credit card and charge accounts. It allows consumers to correct erroneous information in a fast and effective manner and can be used for:

§ Billing errors.

§ Unauthorized use of a consumer’s account.

§ Goods or services charged to a consumer’s account but not received or not provided as promised.

§ Charges for which the consumer requests an explanation or written proof of purchase.

Fair Debt Collection Practices Act (enacted in 1977) – Applies to individuals (most commonly known as debt collectors) who collect on personal, family and household debts owed to creditors. This includes car loans, mortgages, charge accounts and money owed for medical bills.

Both state and federal laws protect consumers from unfair debt collection practices. Under these laws, a third party collector is prohibited from:

§ Using abusive language to coerce a consumer into making payments.

§ Contacting a consumer at unreasonable hours for the consumer’s time zone (interpreted to mean before 8:00 am & after 9:00 pm).

§ Making excessive calls (more than once daily).

§ Contacting the consumer at work, unless he/she agrees to it.

§ Making any false statements, such as the consumer will be arrested if the payment isn’t made.

§ Threatening to notify the employer or friends that the consumer has not paid his/her bills.

§ Using false pretenses to gain entry to the consumer’s home with the intent to either identify or take something of value.

§ Attempting to collect more than what is owed.

§ Sending the consumer misleading letters that may appear to be from a government agency or a court of law.

§ Communicating with the consumer by postcard or any type of correspondence, which contains language or symbols indicating that the letter is related to a debt collection.

§ Contacting the consumer by telephone or mail after he/she has submitted a written request to the creditor or collection agency for them to stop.

Consumers who do not want to be contacted by a debt collector at all can do one or all of the following:

§ Notify the creditor in writing that they refuse to pay.

§ Notify the creditor in writing that they want them to stop all further communication.

§ Provide the creditor with your attorney’s name and number, and inform them to communicate with him/her only.

Violators of the Fair Debt Collection Act are subject to penalties of up to $1000 per violation. Consumers who believe that their rights have been violated can contact the Federal Trade Commission or see an attorney who specializes in consumer rights.

Telemarketing – The process of randomly contacting consumers by telephone usually for the purpose of selling goods or services. The Federal Trade Commission’s (FTC) Telemarketing Sales Rule requires telemarketers to:

§ Disclose the total cost and other terms of sale before the consumer makes any payment for the goods or services.

§ Tell the consumer if they don't allow refunds, exchanges or cancellations.

§ Provide the consumer with the odds of winning a prize, inform him/her that no purchase is necessary and tell the consumer how to get instructions for entering without buying anything.

§ Provide the seller's name, disclose that it's a sales call and tell the consumer exactly what they're trying to sell.

It is illegal for telemarketers to:

§ Misrepresent what they are offering.

§ Call before 8 a.m. or after 9 p.m.

§ Threaten, intimidate or harass consumers, or call again if the consumer has asked them not to.

§ Request advance payment to help repair the consumer’s credit record, recover money lost to other telemarketers or help the consumer get credit or loans.

Additional Protection – Under the Telephone Consumer Protection Act, Federal Communications Commission rules requires telemarketing companies to maintain a "Do Not Call" lists of consumers who have asked not to be called again.

The FCC rules also prohibit:

§ Automatic dialing machines and prerecorded voice message devices from calling emergency phone lines, guest or patient rooms in a hospital, nursing homes or similar establishment, paging or cellular phone numbers or any service for which the person called will be charged for the call.

§ Prerecorded voice message devices from calling residential phone lines unless it's an emergency or the person being called has agreed in advance.

§ Prerecorded calls using automatic dialing machines from tying up your phone line for more than 5 seconds (or 25 seconds depending on your local telephone exchange) after you hang up.

These FCC rules apply whether or not the calls are made within a state or between states. Some states have registration and other requirements for telemarketers who solicit their residents. Consumers can check with their state or local consumer protection agency.