14th Day of 30 Day Credit Tips: Know Your Rights
Do you know your credit/financial rights as a consumer?
FCBA – The Fair Credit & Billing Act is a federal law enacted in 1974 as an amendment to the Truth in Lending Act designed to protect consumers from unfair credit billing practices. It provides guidelines for both consumers and creditors for addressing billing errors in open end credit accounts, such as credit card or charge card accounts including procedures to manage disputes regarding billing statements.
In addition to creating a mechanism for dealing with billing errors, the FCBA contains additional regulations, including the following:
▪ Billing statements must be sent at least fourteen days before the payment is due for open end credit accounts that have a grace period prior to adding finance charges.
▪ If banks report payments as delinquent to credit bureaus they must also report a charge is disputed.
▪ Credit card companies may not prohibit merchants from offering discounts to people who pay with cash or check.
▪ Banks may generally not use money in checking or savings accounts to pay a delinquent credit account with the same bank.
FCRA – The Fair Credit Reporting Act promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAS.
A 2015 study released by the Federal Trade Commission found that 23% of consumers identified inaccurate information in their credit reports.
Under the Fair and Accurately reflect Credit Transactions Act (FACTA), an amendment to the FCRA passed in 2003, consumers are able to receive a free copy of their consumer report from each credit reporting agency once a year.
The free report can be requested by telephone, mail, or through the government-authorized website: annualcreditreport.com. Consumer reports obtained through annualcreditreport.com make it easy to identify and dispute inaccurate information.
Consumer Reporting Agencies (CRAs) are entities that collect and disseminate information about consumers to be used for credit evaluation and certain other purposes, including employment.
Credit bureaus, a type of consumer reporting agency, hold a consumer's credit report in their databases. CRAs have a number of responsibilities under FCRA, including the following:
1 CRAs must maintain reasonable procedures to ensure the maximum possible accuracy of the information contained within a consumer's report;
2 Provide a consumer with information about him or her in the agency's files and take steps to verify the accuracy of information disputed by a consumer;
3 If negative information is removed as a result of a consumer's dispute, it may not be reinserted without notifying the consumer in writing within five days; and,
4 Remove negative information seven years after the date of first delinquency (except for bankruptcies (10 years) and tax liens (seven years from the time they are paid).
The three big CRAs—Experian, Equifax, and TransUnion do not interact with information furnishers directly as a result of consumer disputes. They use a system called E-Oscar. In some areas of the country, however, there are other credit bureaus.
CFPB – The Consumer Financial Protection Board protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.
CFPB jurisdiction includes credit unions, banks, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collections and other financial companies operating in the United States.
The bureau is an independent unit located inside and funded by the Federal Reserve, with interim affiliation with the Treasury Department. It writes and enforces rules for financial institutions, examines both bank and non-bank financial institutions, monitors and reports on markets, as well as collects and tracks consumer complaints.
Furthermore, as required under Dodd–Frank and outlined in the 2013 CFPB–State Supervisory Coordination Framework, the CFPB works closely with state regulators in coordinating supervision and enforcement activities.
For more information check out www.ftc.gov and www.consumerfinance.gov.