We consumers must be aware of our legal rights when it comes to credit and credit cards. In the United States there are Laws to protect us against discrimination and bad practices involving loans and credit. Here’s a brief summary of three of these Federal Laws.
The Equal Credit Opportunity Act (ECOA)
This Act guarantees all customers of credit card companies, retail establishments, loan and finance companies, credit unions and banks an equal opportunity to credit.
The Law states:
It is strictly prohibited under The Equal Credit Opportunity Act to discriminate on the basis of: Race; Color; Sex; Religion; National Origin; Marital Status; Age (as long as you are of legal age to enter into a contract); Receipt of public assistance payments; or because you have chosen to exercise your rights under federal consumer credit protection laws.
Here are some of the key protections under this Act:
1. When applying for credit or a loan, creditors cannot ask you about your race, sex or national origin. Nor can this information be a factor in determining whether to give you the credit or loan.
2. You are entitled to your own credit history in own name, as an individual, even if you are married. If you’re married and you have joint accounts, you’ll also have a joint credit history.
3. Your marital status cannot be an issue when applying for unsecured credit.
4. You never have to tell a creditor that you are divorced or receiving support payments. You can disclose these payments if you believe they will help prove your credit worthiness.
5. If you are rejected for credit or a loan, the lender must tell in writing why you have been rejected.
Fair Credit and Charge Card Disclosure Act
Charge card and credit companies must provide you with information about the terms of your loan. Anything like cash advances, Annual Percentage Rates (APR), or annual fees may vary from one company to another. When you apply and then again when you are issued a card, the company must disclose all fee rates in writing to you. If a card company changes its rates, you must receive in writing the terms and conditions of the changes.
Fair Credit Billing Act
This Act requires your credit card company to promptly correct credit and charge card billing errors. Here’s what you need to do to ensure those rights:
1. Write a letter to your card company if you discover an error on your bill immediately. The letter must be received by the card company within 60 days after the bill was mailed to you.
2. You must state your name, credit card account number and the disputed amount in the letter.
3. Include a copy of the bill and any receipts that will reinforce your claim of error. Keep a copy of everything you send to the card company.
4. The credit card company must let you know that they have received your letter and/or correct the error within 30 days.
5. If the amount is disputed, the card company has 90 days or two billing cycles to write you back.
6. During this 90 days, the card company can’t report the disputed amount to a credit reporting bureau as overdue. And if your claim is confirmed, you will be refunded any interest incurred during that 90 days.
A smart consumer is an educated consumer! Know your rights and do your homework.
For more information about these and other credit card issues you can go to the FTC web site at: http://www.ftc.gov
**Please check with a financial professional before making financial decisions. This article is not intended as investment or financial planning advice.**
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