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6 Consumer Credit Protection Laws You'll Wish You'd Known About!October 20, 2016
Did you ever have a time when, as a child, your dreadful neighborhood bully was about to accost you, but your elder brother or sister appeared just in time to rescue you? Just as your older sibling acted as a savior when you were a kid, there are certain systems and laws in place that look out for the consumers of this country, especially when it comes to protecting you from unfair practices by card issuers, fraudulent transactions, and inaccurate information registered on credit reports. As a cardholder, here are the top six credit laws that protect you.
1. Truth in Lending Act
This act protects you from unfair lending practices even before you've applied for credit. For example, this law states that the card company must communicate in writing – and in simple language – the terms, interest rate and other costs of any loan or line of credit. Moreover, the issuer is prohibited from promoting offers just for advertisement's sake – the said offers must actually be available to applicants who meet the qualifying criteria.
2. Fair Credit Billing Act
This law covers you against inaccurate billing charges. This can include, for example, goods that you ordered but never received, merchandise that you didn't accept or were not as promised and double charges or other incorrect charges. In fact, it's a smart move to pay for expensive items through credit cards, as you can then dispute these transactions if the goods do not meet your expectations
3. Fair Credit Reporting Act
Thanks to this act, you can dispute inaccurate items in your credit history. It empowers you to demand a free copy of your credit report once a year, and also any time that you have been denied credit. Furthermore, this law dictates that harmful information must eventually be removed from your credit report. Late payments and defaults cannot be displayed after seven years; bankruptcies must be dropped after ten.
4. Fair Debt Collections Practices Act
This is a boon for distressed borrowers as it protects them from third-party collection abuses. Collectors are prohibited from misrepresenting themselves for the purpose of the call, being abusive or making false threats. They also are not allowed to discuss your debt with anyone other than your spouse without your permission. Moreover, they are barred from calling you multiple times, or when you are at work (if you inform them that it may cost you your job).
5. CARD Act of 2009
This act is an important piece of legislation that ended many deceptive practices. A few highlights include:
- Issuers must give cardholders 45 days' notice before raising their rates. Additionally, card companies cannot raise a consumer's rates if the consumer defaults on a payment due to another institution.
- Card issuers cannot change the payment due date without your agreement; it must remain the same each month.
- The law also bars card companies from calculating interest based on the double-cycling billing formula – this means that interest can no longer be charged on balances that have already been paid or just paid off.
The Consumer Financial Protection Bureau (CFPB), which oversees many financial products, including credit cards, was established by this law. The act empowers the CFPB to regulate financial instruments without waiting for an act of the Congress, and also allows it to investigate complaints from cardholders. For example, in 2014, the CFPB enabled stay-at-home spouses and partners to include household income during the process of applying for a credit card.
Thanks to regular revision and strict enforcement of credit laws, credit cards can now be used for anything – from building credit scores to financing mortgages. This is because consumers no longer have to be afraid that they'll get caught up in the deceptive practices of card companies and be forced to pay exorbitant charges and high interest rates. In fact, if you know certain tricks of the trade, not only can you ensure that you don't have to pay a single penny towards card charges, but you can also get unsecured credit of up to $250,000 or more at 0% interest! This credit can be used for anything, from meeting a down payment on your home to funding your small business. At Fund&Grow, for a flat fee, we help our clients qualify for this kind of financing and manage the entire process. So if you know someone who is in need of funds, call us today at (800) 996-0270 and we'll do our best to help them out.