Know Your Rights Under The New Credit Laws
Over the last few years, new credit laws were enacted to protect consumers from the predatory practices by lenders and credit card companies. A lot of the momentum behind the creation of these laws can be found in the rash of toxic mortgages and shady dealings that cropped up a few years back and led to the beginnings of our current economic slump.
To keep consumers from being taken advantage of by their creditors, these laws were created to define what can and cannot be done and to protect the consumer from devastating financial harm. Even though these laws have been on the books for some time, not everyone is aware of how they can affect them, so we will examine them, one by one.
The Fair Credit Reporting Act
One of the most important of all the new credit laws, this one was created to make sure that the credit bureaus accurately supply credit information to lenders when requested and that the consumer has a right to know what is in it, who requested it, and to dispute any item that it contains. If your credit is denied, you also have the right to know which credit bureau supplied the negative information and the lender must tell you which bureau they received the report from.
The Equal Credit Opportunity Act
This law was created to prevent any lender or credit provider from discriminating against an applicant on the basis of receiving public assistance, race, creed, marital status, age or country of origin. The creditor may ask for this information, as long as they tell you why they need it but they still may not use it as a basis for determining your credit worthiness.
This law is not restricted to the traditional lenders, either. It also includes small finance companies, department stores, credit card companies, credit unions and even real estate brokers. Even business owners are now protected from discrimination, just like the average consumer.
The Credit Billing and EFT Statements Act
Because keeping track of all credit transactions and electronic transfers falls to the consumer rather than the reporting agencies, reporting discrepancies and errors are your responsibility. What this law provides you is the right to dispute any errors to the reporting agency, including credit bureaus, creditors and banks, and only covers open end accounts like credit cards, revolving charge accounts and overdraft checking accounts. Electronic transfers are also covered, including ATMs, POS debit transactions and electronic banking.
The Fair Debt Collection Practices Act
The last of the new credit laws, this one lays down guidelines on what debt collectors can and cannot do when it comes to seeking repayment from debtors that are in arrears. This includes direct agents of the creditor, debt collection agencies, and even lawyers retained for the purpose of debt collection.
This law prevents any collector from engaging in deceptive, unfair or abusive actions while trying to collect any personal debt. They have to identify themselves correctly, cannot threaten or harass you, and cannot threaten to have you arrested. They are also limited to contact that you approve, and cannot exceed those constraints and you must send that in writing to their offices as soon as possible.
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