Legal Rights from Creditors

Legal Rights

There are several laws that protect you from creditor harassment and credit abuse. This is just a general overview of these laws. If you feel that you have a case against a creditor, you should contact a lawyer to learn your options in detail or a qualified credit repair company.

Fair Credit Reporting Act

According to this act, consumers have the right to review their credit report and to have the information on the report corrected if necessary. Until recently, consumers were not allowed to view their own credit reports. This act promotes the accuracy and privacy of information in reports and requires reporting agencies to maintain correct and complete files. Under the Fair Credit Reporting Act:

Only those with legitimate business reasons can access a credit report.
Credit bureaus are responsible for investigating and changing incorrect data on reports.
When denied credit, you have 30 days to request a free copy of your credit report.
Credit bureaus should re-issue corrected reports to lenders and employers.
You have the right to a free report if you can certify
You are unemployed and plan to look for a job within 60 days,
You are on welfare, or
Your report is inaccurate due to fraud.
You may request that agencies do not distribute your name for unsolicited offers.
You have the right to sue consumer reporting agencies for violation of this act.

Equal Credit Opportunity Act

This act requires creditors to give fair and equal consideration to every person trying to obtain credit. It does not guarantee loan applications or require all creditors to have the same standards. Under the Equal Credit Opportunity Act, lenders cannot discriminate on the basis of :
Sex
Marital Status
Race
Religion
National Origin
Age
Income from Assistance Programs, or
Exercised Rights under the Consumer Protection Act.
The only acceptable criteria for judging client applications are the ability and intent of the client to repay the loan. Creditors are prohibited from asking questions about your sex, race, color, religious affiliation, national origin, or plans to have children on the application. Spouses have the right to have their credit histories listed separately, but one partner can rely on the credit history from a joint account. Child support or alimony may be considered as income on an application. Age cannot be used to deny credit, but your age may be used to estimate how long you will work.

If your circumstances change, such as divorce or retirement, your credit length, interest, or other features cannot be changed. Lenders must notify credit applicants of a decision for or against loans within 30 days. If creditors unfairly discriminate against you, they can be liable for up to $10,000 in damages.

Fair Credit Billing Act

The Fair Credit Billing Act assures the prompt correction of errors on open-ended credit accounts and protects credit ratings while credit is disputed. This means that consumers who are currently disputing an error on their credit report or credit card cannot have their account charges as delinquent. Consumers are responsible for notifying the creditor within 60 days of receiving the bill and the creditor must respond within 30 days of notification.

Fair Debt Collection Practices Act

Under this act, debt collectors cannot use unfair, deceptive, or abusive practices to collect debt. It does not technically apply to banks, department stores, and other lenders who collect their own debts, but no reliable lender is permitted to use such practices. Some of the provisions of this act include:

Debt collectors can only contact people other than the debtor to locate the debtor.
Debt collectors can only make reasonable efforts to communicate with the debtor.
After making contact, debt collectors must send the debtor a written notice detailing the amount of debt, name of the creditor, and giving a 30 day time limit for the debt to be disputed.
Debt collectors cannot harass, oppress, or be abusive when collecting debt. The may not use threats, obscene language, publicize the debt, make annoying or anonymous telephone calls, misrepresent the identity of the collector, the status of the debt, or the consequences for not paying.
Consumers may sue collectors for punitive and actual damages. Check into debt relief programs for more help.