Fair Credit Protection Act
The Fair Credit Protection Act (the act), commonly referred to as the Consumer Credit Protection Act, is a federal consumer protection law that does just what its name implies: It protects the credit and identity of American consumers. Basically, the act lays the ground rules for how creditors can access your credit information, how they can report on your credit information and how they can interact with you regarding your credit information.
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Geography
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Because the Fair Credit Protection Act is a federal law, meaning it was enacted by the U.S. Congress, the act applies in every state in the United States. It doesn't matter whether you live in California or Rhode Island, your rights under the Fair Credit Protection Act are the same.
Types
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The Consumer Credit Protection Act is actually a compilation of several other subacts that collectively provide credit protection. The Consumer Credit Protection Act includes, for example, the Fair Credit Reporting Act, which requires credit agencies and credit reports to provide honest and accurate information regarding your credit history. The Consumer Protection Act also includes the Fair Debt Collection Practices Act, which protects consumers by placing limitations on the manner creditors can attempt to collect debts.
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Features
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One of the most important features of the Consumer Credit Protection Act includes the right of consumers to access their credit reports and correct their reports by reporting incorrect information. Other important features include limitations on the amount of money a creditor can garnish from your wages, and the maximum interest rate a creditor can charge. Finally, the act also requires lenders to provide truth-in-lending disclosures that clearly specify how much you will pay in finance charges over the life of a loan.
Warning
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While the Consumer Credit Protection Act provides important protections for American consumers, the act generally relies on consumers for self-enforcement. For instance, unless you examine your own credit report to identify any incorrect information, it is unlikely the act will provide any benefit to you. Nobody else will examine your credit report for errors.
Watchdog Role
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The federal watchdog agency for the Consumer Credit Protection Act is the Federal Trade Commission (FTC) Bureau of Consumer Protection. The FTC provides more accessible information on consumer rights under the act, and it also takes complaints from consumers who believe their rights have been violated. The FTC does not investigate individual complaints, but instead compiles complaints into a general database that helps the FTC identify major violators of the act. Individual complaints primarily must be resolved through private negotiations with, and lawsuits against, the violating company.
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References
- Photo Credit safe with money 2 image by amlet from Fotolia.com
