Rating: 
Auther Created By:
Amy Nickson On 4th Apr,16
Wiki Article Picture: 
federal laws to safeguard the credit-card-holders

There are some consumer protection Acts that have been put into effect in order to protect all the credit card users from fraudulent activities since 1970s. These Acts have been implemented by the federal government. These federal laws are very useful for all of you in order to protect the personal information, interest rate, charges and other terms related to your finance. This Act has been enacted to protect the consumers legal rights. Here goes an overview of 5 Consumer Credit Protection Acts to help you to get a clear knowledge which will help you to know about the legal terms and to protect your rights as well. Read more to know in details:

1. Fair Credit Reporting Act

The Federal Trade Commission or the FTC has formulated the Federal fair Credit Reporting Act (FCRA) to maintain the privacy and the preciseness of information that is provided in the files of different credit reporting agencies.

Certain aspects that the law is meant to enforce are as follows.

  • As per the law, you have the legal right to ask for your credit report. All the major credit bureaus, (Experion, Trans Union and Equifax) are required to provide you with a copy of your credit report, every year, for free on request basis. In case any unfavorable action has been taken by any company against you, then you can apply for a free copy of the credit report.
  • You have legal right to find out who has asked for a copy of your credit report in the last year.
  • You have the authority to file a dispute in case you find out that the information on your credit report are not right or there are some discrepancies.

Read more - Consumer’s rights under Fair Credit Reporting Act to fix credit issues

2. Fair Debt Collections Practices Act

A distressed borrower should get a clear idea of the FDCPA law in order to have a validation of his/her debts. This law helps the borrower to defend against the third party collection abuses. If you think that the debt collector is breaking the law in any way, you can file complaints with the FTC. This rule prohibits the collectors from certain bad practices such as:

  • The FDCPA prevents debt collectors from calling any debtor at odd hours. They have no permission to call a borrower before 8 am or after 9 pm.
  • The FDCPA prohibits debt collectors from informing the employer regarding credit report of a debtor without his/her permission.
  • The FDCPA prohibits debt collectors from using fake identities to collect debts.
  • The FDCPA prevents them from using abusive words or threaten debtors for collecting money.

Read more: Fair Debt Collection Practices Act

3. Fair Credit Billing Act

If you’ve opted and using your credit cards, then it's your responsibility to keep each and every track of your credit record. Thus, you’ll be able to identify the negative listing on your report and can take initiative to remove the errors. Because, negative listing can lower down your credit score. With the help of this act, a consumer has all the right to talk to the creditors about the negative listings or mistakes in his/her credit record and can make the changes as well. Moreover, this act protects a consumer against inaccurate billing charges. The Fair Credit Billing Act limits the consumer's financial liabilities for unauthorized charges to $50 if he/she meets some criteria. Such as:

  • If the merchandise which you ordered but not received.
  • If you charged doubly or any incorrect charges.
  • Any stuffs, goods which you didn’t expect for.

4. Truth in lending act

This act protects the consumer from unfair lending practices at the time of opting credit cards or loans. Under this act:

  • The issuer should disclose the terms, interest rates, other costs related to the loan or line of credit in writing and of course in a plain language.
  • Any promotional card offer with APR or other advantage should be available publicly not to a specific customer. And the policy should be mentioned in the application.
  • The lender should use a standard calculation in order to specify the interest rate or other charges.
  • This act prevents the lenders from signing unsolicited cards.

5. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act

This Act prevents consumers from fake billing and interest rate hikes. This act is very strong and elaborate in detail. Some great and active regulations are as follows:

  • The rule prohibits excessive interest rate increase on balances.
  • Prevents lenders from advertising 1,000 feet of a college campus.
  • Lenders should provide 45 days of notice on rate, fee and on charge increases.
  • This law banned the double cycle billing.
  • Consumers have the right to reject credit card rate increases. He/she has right to pay off their debts under the actual terms.
  • Prohibits lenders to charge “non-use” or “dormancy” fees.

Bottom lines

These are actually few numbers of federal laws which will help you to protect from collection harassment. Every responsible credit card users should be aware of these laws.

BBB-A--Rating