As a consumer, it’s important to understand your rights and responsibilities and learn about consumer legislation and regulation, in order to become informed decision-makers and take appropriate action to protect your assets.
Know Your Credit Rights
The Federal Trade Commission (FTC), the federal agency charged with consumer protection, outlines your rights very specifically under the Equal Credit Opportunity Act. The premise of the act is that your creditors are not allowed to discriminate based on race, sex, national origin, marital status, age, or whether or not you receive public assistance. Your creditors must let you know of the decision on your application within 30 days, and if you request, they must provide the reason within 60 days. The FTC site also has information on who to contact if you have been discriminated against.
Additional Consumer Protection Legislation
Truth in Lending Act—Requires all credit grantors to provide you with the annual percentage rate (APR) of any loan prior to signing. APR reflects the true cost of the credit.
Fair Credit Billing Act—Allows for the prompt correction of errors on a credit account and prevents damage to your credit record while you are settling disputes.
Fair Credit Reporting Act—Protects consumers from incorrect credit reporting to credit bureaus. Allows for privacy. Permits the consumer to put a written explanation limited statement in their credit report. Provides for removal of outdated information after seven years (bankruptcy after 10 years). Credit reporting agency subscribers composed of banks and merchants, etc., may not access and individual’s credit record unless authorized. This authorization is standard procedure when you sign credit and loan applications, life insurance applications, employment applications, security clearance requests, etc. Read the fine print on the applications for more details.
Fair Debt Collection Practices Act—Prohibits debt collection agencies from abusive collection practices. Allows consumers to dispute a debt and to stop any unreasonable collection activities such as calling before 8 a.m. or after 9 p.m., harassment (vs. strong collection tactics), false statements, threatening action that isn’t permissible, and unfair practices.
Additional Online Resources
A list of additional state and federal consumer financial rights and who to contact with complaints.
An independent agency of the United States government responsible for consumer protection in the financial sector.
My FICO provides you with access to your FICO score (Fair Issac Corporation) as well as free information about credit reports and scores (there is a fee for the score). The FICO score is the score used most frequently by lenders to determine a consumer’s credit risk.
AnnualCreditReport.com was set up by the three main credit reporting agencies in the United States—Equifax, TransUnion, and Experian—to furnish free annual credit reports, as required by federal law.