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Consumer Protection Laws

Credit is a valuable commodity. The significance of how much credit you have and how you use it goes far beyond shopping. Whether you have good or poor credit can affect where you live and even where you work, because your credit record may be considered by prospective employers. That is why it is important to understand how credit is awarded or denied, and what recourse you have if you are treated unfairly. The major laws regulating credit are outlined below.

Fair Credit Reporting Act
The Fair Credit Reporting Act promotes the accuracy and ensures the privacy of information in consumer credit reports. It requires consumer reporting agencies to maintain correct and complete files.

You have the right to review your credit report and to have erroneous information corrected. This is the essence of the Fair Credit Reporting Act, which controls the use of credit reports and promotes accuracy, fairness, and privacy of consumers' credit information.

Issuing Credit Reports
Consumer reporting agencies (also called credit bureaus), the institutions who compile and issue credit reports, are required to assist you in interpreting your report. Reports can be issued only to those with a legitimate business reason, such as creditors, employers, insurers, government agencies reviewing your status for licensing or benefit purposes, or any third party for whom you request a report.

Credit Report Errors
If you find an error on your report, you should notify the consumer reporting agency in writing immediately. The agency is responsible for investigating and modifying or removing any inaccurate data.

The source of the error must then notify all consumer reporting agencies to which the information was sent. If you are not satisfied with the correction, you have the right to add a brief statement about the nature of the dispute.

Denial of Credit
Should a credit application be turned down because of information contained in your credit report, the lender is required to provide the name, address, and telephone number of the credit bureau that issued the report. You then have 60 days to request a free copy from the consumer reporting agency, which must disclose to you all information in the report, its source, and recipients of the report over the past year (two years if for employment purposes).

You have the right to have the consumer reporting agency reissue corrected reports to lenders who received an erroneous report within the last six months, or to employers who received one in the past two years.

Consumer reporting agencies must provide you access to the information in your credit report, as well as identify those who recently requested the information. There is no charge for obtaining your report if you have been denied credit. Otherwise, there may or may not be a charge, depending upon the state in which you live.

Limiting Access
You may exclude your name and address from consumer reporting agency lists used by creditors and insurers to make unsolicited offers of credit and insurance. Requests made by telephone are good for two years. For permanent exclusion from such lists, you must complete a form available from the consumer reporting agencies. To request exclusion from Equifax, Experian, and TransUnion (the three major consumer reporting agencies) , call (888) 567-8688.

Consumers have the right to sue consumer reporting agencies, users, and providers in state and federal court for violations of the Fair Credit Reporting Act.

Free Access To Your Reports
A recent amendment to the federal Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months, from The Federal Trade Commission (FTC), the nation's consumer protection agency, has prepared a brochure, Your Access to Free Credit Reports, explaining your rights and how to order a free annual credit report.

Free reports will be phased in during a nine-month period, rolling from the West Coast to the East beginning December 1, 2004. Beginning September 1, 2005, free reports will be accessible to all Americans, regardless of where they live.

Consumers in the Western states – Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming – can order their free reports beginning December 1, 2004.

Consumers in the Midwestern states – Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin – can order their free reports beginning March 1, 2005.

Consumers in the Southern states – Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas – can order their free reports beginning June 1, 2005.

Consumers in the Eastern states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia – the District of Columbia, Puerto Rico, and all U.S. territories can order their free reports beginning September 1, 2005.

You can order your free annual credit report online at, by calling 877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Equal Credit Opportunity Act
The Equal Credit Opportunity Act (ECOA) ensures that individual creditors apply credit standards in a fair manner so all consumers are given an equal chance to obtain credit. It does not require all creditors to have the same standards, nor does it guarantee approval of loan applications.

In reviewing your credit application, lenders cannot discriminate on the basis of sex, marital status, color, race, religion, national origin, age, reliance on income from a public assistance program, or exercise of rights under the Consumer Credit Protection Act. Your ability and intent to repay funds borrowed are the only acceptable criteria.

Prohibited Information
Credit applications cannot ask about your sex, race or national origin, marital status, or age unless you are applying for the purchase or refinance of your principal residence. Even then, you are not required to answer these questions. The information is required by the federal government to help prevent discrimination, not for evaluation purposes.

You cannot be asked your marital status if you are applying for individual unsecured credit, such as a credit card. Creditors are also prohibited from asking about childbearing plans.

Credit for Couples
Spouses have the right to have their credit histories listed separately, including the accounts they use jointly. Married women have the option of using their birth name or married name. In the case of couples who jointly established credit but whose credit appears in the name of only one spouse, the other partner has the right to rely on that credit history as well.

Divorced Individuals
You do not have to reveal income from alimony, child support, or separate maintenance unless you want it considered by the creditor in the review of your application.

Creditors may ask how old you are, to verify you have reached the legal age to enter into contracts, and may consider your age in estimating how long you will continue to work. However, age may not be used to deny credit to those 62 or older or because the applicant's age exceeds that required for credit insurance.

Changed Circumstances
The terms of your credit may not be changed simply because your life circumstances do. That is, the length, interest, or other features of loans may not be changed, you may not be forced to reapply, and you may not be terminated because you change your name or marital status, reach a certain age, or retire.

Applicant Notification
Lenders must notify credit applicants of their decision within 30 days of receiving a completed application. If credit is denied, the creditor must provide a written statement of the action taken, the reason for denial (or how to request it), the applicant's rights under the ECOA, the name and address of the enforcing federal agency, and the name and address of the creditor. If you believe an act of discrimination has taken place, you have the right to file suit. Creditors found to have discriminated unfairly can be held liable for actual damages and punitive damages up to $10,000.

Fair Credit Billing Act
The Fair Credit Billing Act provides for the prompt correction of errors on open-end credit accounts (department store credit accounts, for example) and protects consumers’ credit ratings while they are settling disputes.

Creditors are prohibited from reporting as delinquent consumers who dispute a charge under this law, which applies to open-end credit instruments, such as credit cards, revolving charge accounts, and overdraft checking. Consumers who question an item are responsible for notifying the creditor in writing within 60 days of receiving the bill. The creditor is then obligated to mail or deliver written acknowledgment within 30 days and may not do anything to damage the consumer’s credit rating while the item is in dispute.

Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act promotes the fair treatment of consumers by prohibiting debt collectors from engaging in unfair, deceptive, or abusive practices.

This act applies to professional debt collectors who collect on loans they have not originated. Though it technically does not apply to banks, department stores, and other lenders who collect their own debts, no reputable lender is permitted to engage in such practices.

  • Debt collectors are permitted to contact persons other than the debtor only to locate the debtor, or make a reasonable effort to communicate with the debtor about the debt.
  • Debt collectors are required to send written notice after making contact, informing the debtor of the amount of the debt, the name of the creditor, and the fact that the debt will be considered valid unless disputed within 30 days.
  • Debt collectors are prohibited from harassing, oppressing, or being abusive in collecting a debt, using threats or obscene language, publicizing the debt, and making annoying or anonymous telephone calls. Debt collectors may not misrepresent the identity of the collector, the status of the debt, and the consequences if it is not paid unless those consequences are lawful and intended to be taken.

Consumers can sue for actual and punitive damages debt collectors who violate the Fair Debt Collection Practices Act.

Questions and concerns about consumer reporting agencies can be directed to: Federal Trade Commission
Consumer Response Center – FCRA

6th & Pennsylvania Avenue, NW
Washington, D.C. 20580
(877) FTC-HELP (382-4357)

Identity Theft
If you are a victim of ID fraud: To file a report contact: FTC @ 1-877-ID THEFT or

For credit cards contact:
Equifax @1-800-525-6285
Experian @ 1-888-397-3742
TransUnion @ 1-800-680-7289

If mail was stolen: To file a report contact: U.S. Postal Service @

If bank accounts are tampered with:
To close accounts contact:
Your local financial institution & TeleCheck @ 1-800-710-9898

If SSN is stolen:
To file a report contact: SNN Fraud Hotline 1-800-269-0271
If you want your name added to the DO NOT CALL (DNC) LIST contact
If you would like to stop credit card solicitation contact 1-888-567-8688

If you are giving away or selling your computer:
To clean your personal information from the hard drive contact
(This website is provided for information purposes and is NOT an endorsement by AAA Fair Credit Foundation.)

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