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Consumer Protection Laws to Guard Your Wallet

It’s wonderful that there are government agencies set up to protect consumers from unethical, unfair, abusive, and/or careless business actions. However, the laws are only effective when consumers know about them and exercise their rights to pursue recompense for shady business transactions or treatment. Here’s your chance to learn about some of them and arm yourself with knowledge that could save you money and hassle.

Consumer protection laws are government regulations at both the federal and state levels. The main government organization that promotes consumer protection is the Federal Trade Commission, which works to:

  • Prevent business practices that are anti-competitive, deceptive, or unfair to consumers;
  • Enhance informed consumer choice and public understanding of the competitive process, and;
  • Accomplish this without unduly burdening legitimate business activity.

Fair credit reporting

Access to credit and the ability to manage your credit report are crucial to financial success in the U.S. After all, credit history and score can be used for insurance, employment, and loan applications. For this reason, there are laws in place to protect consumers when they obtain or attempt to obtain credit or information on their credit report.

Equal Credit Opportunity Act (ECOA) — The ECOA forbids creditors from discriminating against applicants based on non-financial factors, including race, color, religion, national origin, sex, marital status, age, or acceptance of government assistance. Lenders may still ask for this information, but it can’t be used to decide whether to give credit and it can’t be used to set the credit terms.

Fair Credit Reporting Act, Consumer Credit Reporting Reform Act, and the Fair and Accurate Credit Transaction Act of 2003 — These acts work to protect consumers from incorrect credit report information that can harm their financial standing and from the invasion of privacy in the collection and dissemination of information. Consumers have the right to know who is gathering information about them and what type of information is gathered. You are also allowed an opportunity to challenge and correct that information.

Fair Credit and Charge Card Disclosure Act — Creditors must provide full disclosure about the terms of any credit card offer, including annual fees, interest rates, and late fees.

Lending and banking protection

Truth in Lending Act — This is like the FCCCDA above but for loans. Lenders are required to provide written disclosures about the terms and costs of consumer loans, including the costs associated with borrowing, how the costs are calculated, and the Annual Percentage Rate (APR) of the loan.

Purchases

These acts protect your purchasing decisions beyond standard warranty contracts and return policies.

Home Ownership and Equity Protection Act — This act works to curtail predatory lending practices when it comes to home loans. It’s not a bad idea to read the restrictions on lenders to make sure you’re not being taken advantage of while applying for a mortgage.

Consumer Leasing Act — Because of this act, lessors are required to provide a clear disclosure of important terms in all lease agreements and a list of all costs charged for a lease.

Electronic Fund Transfer Act — This act minimizes a consumer’s liability if someone uses their ATM or debit card without permission.

Privacy policies

Unfairness and Deception — Under Section 5 of the FTC Act, the FTC enforces the promises made by companies to consumers about their privacy and the precautions the company takes to secure personal information of customers.

Gramm-Leach-Billey Act (GLB Act) — The FTC works to protect consumers’ personal information held by financial institutions.

Identity Theft and Assumption Deterrence Act — This made identity theft a federal crime and gives consumers specific rights when they become (or believe they have become) the victim of identity theft.

Hopefully this knowledge will give you more confidence when making purchases, applying for loans or credit cards, and managing your credit score!

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