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Consumer Credit Law; For Your Protection

Education is the first line of defense against fraud and deception; it can help you make well-informed decisions before you spend your money. Today’s exercise, read up!

Fair Debt Collection Practices Act (FDCPA):

The law outlines consumers’ rights to dispute overdue bills placed with collection agencies, an original credit using a different name to collect the debt, or a lawyer collecting a debt for a creditor.

The FDCPA prevents debt collectors from using unfair, abusive, or deceptive practices to collect overdue bills. Some regulated practices include:

  • A collector can contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree.
  • A debt collector also may not contact you at work, if the collector knows that your employer disapproves of such contacts. A collector should not make excessive calls to you.
    You can stop a collector from contacting you by writing them a letter, but if the debt is yours, you still owe it and the original creditor may sue you for repayment.
  • A collector is prohibited from intimidating the consumer by threatening to notify his employer or friends that he has not paid his bills. A collector can only contact third parties to find out where you live or work, but cannot disclose that you owe money to anyone other than you or your attorney.
  • A collector may not attempt to collect more than what is owed.
  • A collector may not use offensive language to force a consumer to make payments.

Fair and Accurate Credit Transactions Act:
This act replaces the Fair Credit Reporting Act and provides for everyone to receive one free credit report per year from each of the three major credit bureaus, TransUnion, Experian and Equifax. To access your free report, visit or call 1-877-322-8228. It also provides for increased accuracy in reporting, prevention of identity theft and restricts the marketing of financial products using sensitive information that is shared with affiliates.

The Truth in Lending Act – is designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement and all costs.

Equal Credit Opportunity Act – This law stops a creditor from discriminating against a consumer on the basis of age, sex, or marital status, reliance on income from a public assistance program, and race, color, religion, or national origin.

Fair Credit Billing Act (FCBA)

This law protects you against billing errors and provides a system to dispute them.
The FCBA settlement procedures apply only to disputes about “billing errors.” For example:

  • Unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
  • Charges that list the wrong date or amount;
  • Charges for goods and services you didn’t accept or weren’t delivered as agreed;
  • Mathematical errors;
  • Failure to post payments and other credits, such as returns;
  • Failure to send bills to your current address – provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and
  • Charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.

To take advantage of the law’s consumer protections, you must:

  • Write to the creditor at the address given for “billing inquiries,” not the address for sending your payments, and include your name, address, account number and a description of the billing error.
  • Send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you.

Send your letter by certified mail, return receipt requested, so you have proof of what the creditor received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

Published Apr 27, 2009.