Federal Laws That Protect Consumers And Credit Cardholders

The start of the year is a good time to get informed and review your rights as a consumer and as a credit cardholder. The government has provided Federal Laws specifically for this purpose so you want to make sure that you personally benefit from your consumer rights and privileges.

1. Fair Credit Reporting Act

The FCRA has a couple of provisions that help consumer protect their personal credit. For instance, everyone is entitled to receive one free copy of a credit report annually from each of the three major credit bureaus (Equifax, Experian, TransUnion).

The three bureaus have set up a website where consumers can request for their free annual credit report, so you may want to get free copies of your three reports to make sure that all information in your file are accurate.

Consumers also have the right to dispute errors they find in their credit report by sending a dispute letter to the bureau that issued their report. The bureau is mandated to respond to your complaint accordingly by conducting an investigation which can take up to 30 days. If the dispute is valid, the credit bureau should make the necessary changes and notify the two other bureaus about these updates. The bureau will also send the complainant an updated copy of his/her credit report at no charge.

Other instances that entitle you to access your personal credit report for free are the following: you are currently unemployed and plans to look for work within the next 60 days; you suspect to be a victim of ID theft or fraud.

The FCRA also prohibits unauthorized access of your credit report so all inquiries made should be reflected on your file. In addition, negative records such as defaults, charge offs, foreclosure or Chapter 13 bankruptcy should not remain in your report for more than seven years.

2. Fair Debt Collection Practices Act

This Act protects you against third-party collectors or debt collection agencies that resort to wrongful practices when collecting debts. Read all the stipulations of the Fair Debt Collection Practices Act and if a collector is guilty of a violation, file a complaint to the FTC (Federal Trade Commission) immediately.

For instance, a collector cannot call before 8 a.m. or after 9 p.m or contact you at your workplace; cannot discuss details of your debts to anyone without your consent; or resort to threats or harassment to force payment.

You also have the right to order Cease and Desist through a letter which means the collector must stop all its attempts to contact you. However, it's important to understand that the Cease and Desist order does not change the fact that you are responsible to pay for your debts, unless the charges are incorrect.

3. The Credit CARD Act

Amendments have been made to the Credit CARD (Card Accountability, Responsibility, and Disclosure) Act to protect credit card owners. For example, issuers cannot implement sudden changes or increases with your interest rate without first giving a 45-day advance notice. Furthermore, credit card companies are now prohibited from implementing the double-cycle billing method and "universal clause" as they did in the past years.

Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of www.newhorizon.org such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended Bad Credit Credit Cards.

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