Fighting Credit Problems
There are a wide variety of laws that protect you from being treated unfairly in the areas of consumer finance, from protecting the accuracy and privacy of your credit information, to ensuring you are aware of credit terms, and for assisting you in understanding denials of credit, as well as disputing inaccurate information contained in your credit card statements as well as your credit reports. If you believe you have been treated unfairly, please call us for a free telephone consultation at (312) 782-5808 or contact us. Examples of some consumer protection laws are:
Equal Credit Opportunity Act
If you are turned down for credit and do not get a written explanation why, call us.
The Equal Credit Opportunity Act prohibits the creditor from discriminating in any transaction on the basis of race, color, religion, national origin, sex or marital status, or age (provided that the applicant has the capacity to pay the contract). The ECOA also prohibits other conduct:
- The Exercise of Any Right under the Consumer Credit Protection Act. It is unlawful for any creditor to discriminate because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. For example, a collector which brings suit against the consumer, when it would not have done so otherwise, because the consumer filed an FDCPA claim against it violates the ECOA.
- Failure to Provide a Declination Letter. Within thirty (30) days of application for credit, the creditor must inform the consumer of the action taken on the application. The creditor’s notice must state that credit has been granted, denied, or that further specific information is needed. The denial of the application entitles the consumer to obtain a copy of his credit report without cost.
Truth In Lending Act
The Truth In Lending Act requires the disclosure of credit terms prior to entry into a consumer credit contract. These disclosures which include the annual percentage rate, amount financed, finance charge, amount and timing of payments, etc. must be in writing in a form the consumer may keep, common violations include:
- The Two Note Case. The two note case is where the consumer is required to sign a contract which does not give the TILA disclosures, either containing no terms of financing or only partial incomplete disclosures. At a later date, the consumer is required to sign a contract containing the TILA. The TILA information comes too late; the consumer is already bound. Common areas of this violation are car sales and home improvements. The seller will have the consumer sign a contract without the TILA disclosures and later have the consumer sign another contract containing the TILA disclosures.
- Spiking. A contract which imposes a security interest in the consumer’s residence (other than the first mortgage) must provide a three day right of rescission. Sometimes in home improvement contracts the contractor will begin work before the expiration of the rescission period. This practice is called “spiking” and violates the TILA. Also, the failure to give the proper notice including the correct number of forms also violates the TILA.
- Hidden Finance Charges. The inflation of the purchase price in a credit transaction in excess of the price in a cash transaction is a hidden finance charge. An example is where the seller charges a lower purchase price when the item is purchased for cash ($100) but charges a greater amount when the item is financed ($120) We have seen this practice in the sale of health club memberships, the sales of motor vehicles, etc.
Fair Credit Reporting Act
The Fair Credit Reporting Act, 15 U.S.C. § 1681, regulates the collection, dissemination, and use of consumer information, including consumer credit information. Under the Act, you have, among other things, the following rights:
- You have the right to access your credit report, and every year, you are entitled to a free credit report.
- You have the right to dispute incomplete or inaccurate information.
- Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information.
- Consumer reporting agencies may not report outdated negative information. In most cases, a consumer reporting agency may not report negative information that is more than 7 years old, or bankruptcies that are more than 10 years old.
- You may limit “prescreened” offers of credit and insurance you get based on information in your credit report.
Fair and Accurate Credit Transactions Act
Under the Fair and Accurate Transactions Act, 15 U.S.C. § 1684c(g), no person that accepts credit cards or debit cards shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of sale transaction.
Problems With Loans
The client has signed a loan agreement with a bank, mortgage broker, loan company, car company, etc. Many of loan documents fail to properly provide a consumer with their rights. As a result, you may be able to stop a foreclosure under the Truth in Lending Act.
We are also interested in looking at any loan that:
- Requires more than four payments in a year.
- Charges a high rate of interest.
- Is a “Payday” or “Title” loan secured by a car.
- Refinancing loans secured by your house.
- Loans secured by personal property.
- Loans made to buy furniture.
- Loans for home-repairs.
- Loans, which include charges for insurance or some, other unusual fee.
The consumer signs a second mortgage or gets a loan from a mortgage broker that does not comply with Truth in Lending Act. It is very common to have errors in the loan documents. The consumer may even be able to rescind the loan or renegotiate it for substantial savings. Other potential problems include:
- You were charged a payoff fee, discharge fee, fax fee or any other fee on your loan that was not disclosed to you before the closing.
- You were charged an escrow waiver fee by a mortgage company.
- You have money that was not directly deposited to your account after you paid it.
- You had to pay insurance on your property, including the full value of the ground.