Consumer Credit Protection

Consumer credit protection law regulates the financial relationship between individual consumers and the businesses that sell loans, mortgages, and provide various forms of credit. All consumer credit protection laws are intended to hold businesses responsible for fraudulent, unfair, and deceptive practices. There are a variety of laws at both the federal and state levels that regulate consumer credit.

Examples of consumer credit law:

♦ Fair Debt Collections Practices Act
Fair Credit Reporting Act
Fair Credit Billing Act

What is the Fair Debt Collection Practices Act (FDCPA)?

The Fair Debt Collection Practices Act (FDCPA) is meant to prevent abusive practices by debt collectors. The Act helps the consumer ensure fair debt collection. The consumer can dispute the claims of a debt collector, and ask for validation of his debt information. The FDCPA has laid down guidelines to show how a debt collector may conduct his business and how he may not. It also sets down a consumer’s debt collection rights. There are penalties for violations of the Act.

What is the Fair Credit Reporting Act?

The Fair Credit Reporting Act (FCRA) regulates how a consumer’s credit information may be collected, disseminated and used. The FCRA is one the important Acts that are the basis of a consumer’s rights in the matter of consumer credit. The FRCA ensures that the consumer’s rights are protected and that a consumer can get any incorrect or inaccurate information in his credit report to be corrected.

What is the Fair Credit Billing Act?

The Fair Credit Billing Act (FCBA) protects the consumer from unfair billing practices. The Act also provides a way for the consumer to deal with errors in billing in credit accounts such as credit cards and charge card accounts.

What is predatory lending?

One particularly prevalent and troubling form of unfair business activity is predatory lending, which typically refers to the practice of a lender using deception to convince  borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to fight back. A financial service provider making predatory loans may systematically fail to disclose the true terms and conditions of the borrower's financial obligations or otherwise conceal the risks from the borrower.  Other illegal practices include excessive fees, abusive prepayment penalties, unnecessary products, and mandatory arbitration of any disputes. Unwary consumers subjected to these loans frequently go through devastating foreclosures. Although predatory lending is most often used in the context of home financing, the term also applies to payday loans, credit cards or other forms of consumer debt when the interest rates are considered unreasonably high.