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ECU FINA 2244 - Consumer Credit Protection

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Consumer Credit Protection1.) Truth-In-Lending Act (TILA): requires creditors in consumer transactions to disclose basic information about the cost and terms of credit to the consumer – standardizes credit terms and methods of calculation, and helps people to shop for the most favorable credit termsa. transactions must disclose credit cost in dollars (finance charge) and interest rate of finance charge (annual percentage rate or APR)b. Regulation Z – items that must be listed if part of the finance charge: service, activity, carrying and transaction charges; loan fees and points; charges for credit life and credit accident and health insurance, and fees for credit reports and appraisalsc. Credit CARD Act - places limits on raising rates and on late fees. No cards for consumersunder 21, unless consumer has an independent means of income or has a cosigner over 21.2.) Consumer Leasing Act: does for consumer leases what TILA does for consumer credit – applies topersonal property leases for less than $50,000 - not apartments, not car rentals3.) Fair Credit Billing Act (FCBA): addresses problems with correcting inaccurate or unauthorized charges on bills. Prohibits mailing of unsolicited credit cards. In case of billing error, consumers must notify the creditor in writing within sixty days of the billing of a disputed charge. Creditors must answer the complaint within thirty days of receipt and has ninety days to resolve the problemand notify the consumer.The Act also establishes procedures to report lost or stolen credit cards. Liability for unauthorized charges is $50. ATM cards are covered under a different act. If you lose your ATM card, you must notify the financial institution within 2 days to limit liability to $50. If you notify the FI within 60 days but after 2 days, your liability goes up to $500. If you do not report the theft of your ATM card within 60 days after receiving the first statement containing unauthorized transfers, you are liable for all amounts.4.) The Fair Credit Reporting Act (FCRA): regulates credit bureaus, which are consumer reporting agencies. FYI, no limit is placed on the information that consumer reporting agencies may include in their files. You have:a. the right to see information reported abut one to a creditor that results in credit being deniedb. the right to have a response to one’s complaint about inaccurate information within thirty (30) daysc. the right to know who has asked for copies of one’s credit information within the past yeard. the right to withhold permission to a bureau which wishes to provide a report to an employer or release a report containing medical informatione. FACT - Fair and Accurate Credit Transactions Act - consumer can see one free annual credit report5.) The Equal Credit Opportunity Act: prohibits credit discrimination on the basis of race, sex, color, religion, national origin, marital status, receipt of public benefits, the good faith exercise of credit-related rights, or age.6.) The Fair Debt Collection Practices Act: meant to reduce unfair, deceptive, and abusive collection techniques used by some debt collectors.*Creditors have the right to garnish wages to pay debts and/or to sell the debt to a debt collection agency or pay the agency a commission to collect the debt.*Within five (5) days of initial communication from a debt collector, you are entitled to receive certain information related to the collection of your debt. You should receive a letter with the following: the amount of debt, the name of the creditor to whom the debt is owed, a statement that unless you dispute the debt within 30 days the collector will assume that it is valid, and astatement that the debt collector must show proof of the debt if you advise them within 30 days of initial notification that you dispute the debt.*FORBIDDEN PRACTICES: threats of violence or arrest, obscene language, publication of a list of delinquent consumers, harassing phone calls, discussion of your debts with other people (such as parents or employers), and using false or misleading representation in collecting a


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