If you are constantly harassed by loan sharks and debt collectors, if you are a victim of unfair credit collection practices, it is time to know your rights. Yes, the Government of the United States protects your rights as a borrower. This article provides a detailed list of all the federal laws and consumer credit rights based on which you can seek legal help. 

All your consumer credit rights as a citizen of the United States of America are firmly protected by the Consumer Credit Protection Act (CCPA) of 1960. This act is divided into various parts. Each part addresses the protection of different aspects of the loan taken by you. For instance, this Act prohibits any discrimination based on religion, gender, national origin, age, and other arbitrary factors. Instead, pertinent factors such as your credit history, monthly expenses, existing debts, and income determine the denial or approval of credit. 

What are the main rights established under the Consumer Credit Protection Act?

There are a few basic consumer credit rights that have been introduced under this Act to ensure fair practices. Since 1960, when the Act was brought into force, it has grown in its purview. It now includes five main parts, each of which has its distinct purposes. 

Let us look at these parts and the rights that they bestow in detail. 

1. The Truth in Lending Act

Enacted in 1969, this Act ensures that the creditors maintain absolute transparency with the lenders. According to these consumer credit rights, companies are to provide the debtors with complete information which is true. If the debtor happens to have any confusion about the financial terms or any other aspect of the loan, the organization is to entertain every such doubt, in detail. This important Act or TILA stipulates that the following information needs to be disclosed by the lenders to the debtors:

1. The term of the loan in question, 
2. The annual percentage rate at which the loan is being given,
3. The total cost to be borne by the borrower including the rate of interest is to be discussed and disclosed.
4. Any other fee that the borrower will be expected to pay. 
5. This Act aims to present a clear picture to the borrower and prevent them from being misled into drawing loans under false claims. 
6. Any period billing services should also be disclosed to the borrower before the signing of the documents is completed. 
7. Advertisements that are deceptive in nature are strictly prohibited.
8. This legislation provides the consumer with a three-day grace period within which they may opt out of a loan even after paperwork proceedings are completed. 

2. The Fair Credit Billing Act

The Fair Credit Billing Act (FCBA) was enacted in 1974 and is a crucial part of Consumer Credit Rights. This Act protects consumer credit rights related to billing disputes. The Act addresses calculation errors, charges made to the wrong person, wrong date entries, charges not authorized by the account holder, and other similar mistakes. If you as a borrower are facing any issue, and it falls under the purview of this Act, these are the steps to be taken.

Step 1. A letter stating the error is to be sent to the creditor.

Step 2. Such a letter is to be sent within sixty days of the error. 

Step 3. The letter must be sent along with a copy of the error/receipt as proof.

For an error to fall under the jurisdiction of this Act, it must satisfy the following conditions,

1. The account in question should be an open-end credit account.
2. This account can also be a revolving charge account.
3. FCBA does not apply to installment contracts, debit cards, and loans.  

The creditor is to send a reply to the letter with acknowledgments of the complaint. They must solve the billing dispute within 90 days, thereafter. 

3. The Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) of 1974 plays a very important role in consumer credit rights. Discrimination by lenders/creditors when considering loan applications is strictly prohibited under this Act. These are the grounds on which discrimination is prohibited: Gender, religion, nationality or ethnicity, race, color, and any non-credit related matters. For example, a creditor cannot deny loans to a person solely based on the age of the person or public assistance received by them

4. The Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) is a piece of federal legislation that protects debtors against third party debt collectors. Third party debt collectors are often employed/outsourced by companies. Borrowers have complained of their harsh ways of debt collection often laced with threats. The Act establishes a restriction on the extent of the action of the third party collectors. For example, a borrower may only be contacted three times a day and not more. 

If the creditor or the debt-collector happens to flout these stipulated guidelines, they might be sued by the debtor. They might also be liable to be damages to the debtor along with the cost of proceedings. To learn more, seek guidance from the Iowa Debt Relief Lawyer. 

5. The Electronic Fund Transfer Act

The Electronic Fund Transfer Act (EFTA) provides protection to consumers in the following cases:

1. Transfer of funds when made electronically
2. Transfer of funds made through debit cards, automated teller machines (ATMs), 
3. Automatic withdrawals made from a bank account. 
4. In case of transaction errors, and incidences of card theft. 
5. The Act stipulates specific guidelines that financial institutions are to abide by in case of errors. 
6. It acts as a protector and limits the liability of a card holder in cases of card theft.
7. This Act also lays down the responsibilities of financial institutions to disclose pertinent information about how accounts are managed. 

Wrapping It Up!

The Consumer Credit Protection Act is a milestone. Before its enactment, rights were not paid much heed when it came to debt collection and credit reporting practices. Lenders would often harass and take advantage of consumers. With the introduction of CCPS, all institutions are now bound to disclose loan terms, costs, other charges, and even interest rates. 

Do let us know if you found the article informative and helpful.

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