Consumer Credit Law
The Fair and Accurate Credit Transactions Act of 2003 was signed into law by President George W. Bush on December 4, 2003. The purpose of the act is to ensure that all citizens are treated fairly when applying for a mortgage or other forms of credit. Additionally, the act:
- Gives every consumer the right to a free copy of their credit report from
- all three major credit bureaus, every year.
Helps to prevent identity theft before it happens by requiring merchants to leave all but the last 5 digits of a credit card number off store receipts.
- Creates a national system of fraud detection to make identity thieves more likely to be caught.
- Establishes a nationwide system of fraud alerts for consumers to place on their credit files.
- Requires regulators to devise a list of red flag indicators of identity theft.
- Requires lenders and credit agencies to take action before a victim even knows a crime has occurred.
The Fair Credit Reporting Act (FCRA) is a federal law that regulates the activities of credit reporting bureaus. Private credit reporting agencies (Experian, Equifax, Trans Union) keep records of financial payment histories, public record data and personal identification information. The credit reporting agencies sell the information to creditors so that they can make decisions as to whether or not you should be offered credit. The FCRA also punishes those who are not authorized to obtain credit reports, as well as employees of the credit reporting agencies who furnish credit reports to unauthorized persons.
Under the FCRA, if you are denied credit, insurance, employment or rental housing due to information in your credit report, you may obtain a free copy of your credit report within 60 days of being denied. If you dispute the accuracy of information in your credit report, the credit-reporting agency must investigate the information with the source and verify, update or delete the information within 30 days.
Truth in Lending Act is a federal law that sets minimum standards for the information that a creditor must provide in an installment credit contract. This information includes: the amount being financed, the amount of the required minimum monthly payment, the total number of monthly payments and the annual percentage rate (APR) and must be provided to the debtor prior to entering into the consumer credit contract. The Truth in Lending Act also regulates the advertising of credit, enabling consumers to make accurate comparisons of credit offered.