By Tammy Fink
Special to GUIDON
October is Consumer Awareness Month and the Financial Readiness Office wants you to know your rights.
Truth in Lending Act
The Truth in Lending Act was established in 1968 and is a federal law which is designed to encourage informed use regarding consumer credit. This law requires lenders to disclose their terms, the costs associated with borrowing and how they are calculated.
TILA introduced the Annual Percentage Rate calculation mandated for all consumer lenders. From its inception until mid-2011, the authority over this law was the Federal Reserve Board. In July 2011, its authority shifted from the FRB to the Consumer Financial Protection Bureau.
TILA gives consumers the right to cancel certain credit transactions and it regulates the use of credit cards. It offers a resource for fair and timely resolution of credit billing disputes. TILA does not regulate the costs of consumer credit, with the exception of some particular high-cost mortgage loans. It does, however, require standardized disclosure of costs and charges.
Fair Credit Billing Act
The Fair Credit Billing Act was enacted in 1974 as an amendment to TILA. It protects consumers from unfair billing practices, and is one tool to address billing errors when dealing with open-ended credit, such as credit cards.
If you have discrepancies in your billing statement, contact the creditor in writing. Send disputes to the billing inquiries address, not the payments address. Your disputes must be delivered within 60 days of the statement date. Making disputes by phone is not protected under FCBA.
FCBA also dictates that your billing statement must be sent to you at least 14 days prior to the due date. If the creditor reports delinquent actions, it must show any disputes in progress on your credit file. A delinquent credit account with your bank cannot debit your accounts for the delinquent credit you owe them without obtaining a request for garnishment on those accounts.
This law also covers items purchased on credit that fail to meet your standards of quality. Attempt to resolve the issue with the merchant first, then seek a refund from a credit issuer.
(Editor’s note: Fink is a Personal Financial Readiness specialist at FRO.)