Section 22.2

Credit Protection Laws Credit Protection Laws Section 22.2Section 22.2

Understanding Business and Personal Law


Borrowing Money and Buying on Credit

What You’ll Learn

How to identify and describe credit How to identify and describe credit protection laws (p. 493)protection laws (p. 493)

How to explain your rights and duties How to explain your rights and duties under credit protection laws (p. 493)under credit protection laws (p. 493)




Why It’s Important

Knowing about credit protection laws will Knowing about credit protection laws will help you be a smarter consumer.help you be a smarter consumer.




Legal Terms

Equal Credit Opportunity Act (p. 493)Equal Credit Opportunity Act (p. 493)Fair Credit Reporting Act (p. 493)Fair Credit Reporting Act (p. 493)Fair Credit Billing Act (p.493)Fair Credit Billing Act (p.493)Fair Debt Collection Practices Act (p. 494)Fair Debt Collection Practices Act (p. 494)




Credit Protection Laws Equal Credit Opportunity ActFair Credit Reporting ActFair Credit Billing ActFair Debt Collection Practices Act

Section OutlineSection Outline




Pre-Learning Question Pre-Learning Question

How does the government help protect your rights as a user of credit?




The government has established laws The government has established laws to protect your rights as a consumer to protect your rights as a consumer as well as your credit.as well as your credit.

Credit Protection Laws Credit Protection Laws




The The Equal Credit Opportunity ActEqual Credit Opportunity Act ensures that both businesses and ensures that both businesses and consumers are given an equal chance consumers are given an equal chance to obtain credit. to obtain credit.

Equal Credit Opportunity Act Equal Credit Opportunity Act




The law makes it illegal for banks and The law makes it illegal for banks and businesses to discriminate against businesses to discriminate against credit applicants because of theircredit applicants because of their


sexsexraceracemarital statusmarital statusnational originnational origin




religionreligionage age public assistance income public assistance income





The The Fair Credit Reporting ActFair Credit Reporting Act prohibits the abuse of a valuable prohibits the abuse of a valuable consumer asset-—credit. The act consumer asset-—credit. The act deals with unfavorable reports issued deals with unfavorable reports issued by credit bureaus.by credit bureaus.

Fair Credit Reporting Act Fair Credit Reporting Act




Credit reports, which contain much Credit reports, which contain much personal data, are frequently issued to personal data, are frequently issued to


banksbanksinsurance companiesinsurance companiesbusinessesbusinessesprospective employers prospective employers




You have the right to know all You have the right to know all personal information that is in a personal information that is in a consumer reporting agency’s files and consumer reporting agency’s files and the sources of the information.the sources of the information.





You also have the right to be told the You also have the right to be told the name of anyone who received a copy name of anyone who received a copy of your credit report in the past year of your credit report in the past year (two years, if the credit report relates (two years, if the credit report relates to a job application).to a job application).





When errors are made in bills sent by When errors are made in bills sent by credit card companies and businesses credit card companies and businesses that give credit, the that give credit, the Fair Credit Billing Fair Credit Billing ActAct can help you. can help you.

Fair Credit Billing Act Fair Credit Billing Act




If you believe an error has been made If you believe an error has been made on a bill, notify the creditor in writing on a bill, notify the creditor in writing within 60 days of the date of the within 60 days of the date of the statement and follow the format of the statement and follow the format of the sample letter given.sample letter given.

Fair Credit Billing Act Fair Credit Billing Act




22.222.2

Sample Dispute LetterSample Dispute Letter

DateDate

Your NameYour Name

Your AddressYour Address

Your City, State, Zip CodeYour City, State, Zip Code

Your Account NumberYour Account Number

Name of CreditorName of Creditor

Billing InquiriesBilling Inquiries

AddressAddress

City, State, Zip CodeCity, State, Zip Code

DateDate

Your NameYour Name

Your AddressYour Address

Your City, State, Zip CodeYour City, State, Zip Code

Your Account NumberYour Account Number

Name of CreditorName of Creditor

Billing InquiriesBilling Inquiries

AddressAddress

City, State, Zip CodeCity, State, Zip Code




22.222.2


Dear Sir or Madam:Dear Sir or Madam:

I am writing to dispute a billing error in the I am writing to dispute a billing error in the

amount of $_____ on my account. The amount of $_____ on my account. The

amount is inaccurate because (describe the amount is inaccurate because (describe the

problem). I am requesting that the error be problem). I am requesting that the error be

corrected, that any finance and other corrected, that any finance and other

charges related to the disputed amount be charges related to the disputed amount be

credited as well, and that I receive an credited as well, and that I receive an

accurate statement.accurate statement.

Dear Sir or Madam:Dear Sir or Madam:

I am writing to dispute a billing error in the I am writing to dispute a billing error in the

amount of $_____ on my account. The amount of $_____ on my account. The

amount is inaccurate because (describe the amount is inaccurate because (describe the

problem). I am requesting that the error be problem). I am requesting that the error be

corrected, that any finance and other corrected, that any finance and other

charges related to the disputed amount be charges related to the disputed amount be

credited as well, and that I receive an credited as well, and that I receive an

accurate statement.accurate statement.




22.222.2


Enclosed are copies of (use this sentence to Enclosed are copies of (use this sentence to

describe any enclosed information, such as describe any enclosed information, such as

sales slips, payment records) supporting my sales slips, payment records) supporting my

position. Please investigate this matter and position. Please investigate this matter and

correct the billing error as soon as possible.correct the billing error as soon as possible.

Sincerely,Sincerely,

Your nameYour name

Enclosures: (List what you are enclosing.)Enclosures: (List what you are enclosing.)

Enclosed are copies of (use this sentence to Enclosed are copies of (use this sentence to

describe any enclosed information, such as describe any enclosed information, such as

sales slips, payment records) supporting my sales slips, payment records) supporting my

position. Please investigate this matter and position. Please investigate this matter and

correct the billing error as soon as possible.correct the billing error as soon as possible.

Sincerely,Sincerely,

Your nameYour name

Enclosures: (List what you are enclosing.)Enclosures: (List what you are enclosing.)




Under the Under the Fair Debt Collection Fair Debt Collection Practices ActPractices Act, it is illegal for debt , it is illegal for debt collectors to threaten consumers with collectors to threaten consumers with violence, use obscene language, or violence, use obscene language, or contact consumers by telephone at contact consumers by telephone at inconvenient times or places.inconvenient times or places.

Fair Debt Collection Practices Act Fair Debt Collection Practices Act




Debt collectors are not allowed to Debt collectors are not allowed to impersonate government officials or impersonate government officials or attorneys, obtain information under attorneys, obtain information under false pretenses, or collect more than false pretenses, or collect more than is legally owed.is legally owed.

Fair Debt Collection Practices Act Fair Debt Collection Practices Act




Match the law with its description.

1.1. This act gives you 60 days to notify This act gives you 60 days to notify a creditor in writing that you a creditor in writing that you believe an error has been made on believe an error has been made on a bill. a bill.




ANSWERANSWER

Fair Credit Billing Act




2.2. This act makes it illegal for debt This act makes it illegal for debt collectors to threaten consumers collectors to threaten consumers with violence or use obscene with violence or use obscene language.language.




ANSWERANSWER

Fair Debt Collection Practices Act




3.3. This act gives you the right to This act gives you the right to know all personal information know all personal information about you that is in a consumer about you that is in a consumer reporting agency’s files and the reporting agency’s files and the sources of the information.sources of the information.




ANSWERANSWER

Fair Credit Reporting Act




Reviewing What You Learned

1. What is the purpose of the Equal Credit Opportunity Act?

Section 22.2 Assessment





Ensures that businesses and consumers are given equal chance to obtain credit.


Answer





2. What does the Fair Debt Collection Practices Act make it illegal for debt collectors to do?






To threaten consumers with violence, use obscene language, or contract consumers by telephone at inconvenient times or places.


Answer





Debt collectors are not allowed to impersonate government officials or attorneys, obtain information under false pretenses, or collect more than is legally owed.


Answer





Critical Thinking ActivityCredit Protection Laws Do you think credit protection laws are necessary? Why or why not?





Critical Thinking Activity AnswerCredit Protection Laws Answers will vary but will probably recognize that consumers are entitled to some protection.





Legal Skills in ActionCredit Protection Choose one of the credit protection laws discussed in this section and research when and why it was made into a law. Write a one-page report about your findings.





Legal Skills in Action AnswerCredit Protection Reports will vary but should document their sources of information.

Credit Protection Laws Credit Protection Laws End of Section 22.2End of Section 22.2

Documents

Section 22.2