Know Your Rights: What Every Consumer Needs to Know About Debt and the Law

by Jay Sutton

Without a doubt, building good credit history is extremely important to one's life. Without good credit you can be certain that there are many things that you can be deprived of.

The important of building credit goes far beyond life's necessities and wants, such as buying clothes and groceries. It is more than petty cash advances or cash back rewards. Building your credit is akin to building your life as well.

Why? Simply because the way you handle your credit will have an impact on your way of life, your career, the way transact business with other people, and even on the place where you live.

Your credit history and creditworthiness is one of the most important factors employers, lenders, property owners, and/or business owners will consider.

For these reason, why it is imperative for you to learn and understand how credit is granted or rejected. It is also imperative to know what to do in case you have been unduly cared for, coerced or harassed.

In the United States, the Federal Government has enacted various state and federal laws that control credit. These rights have been stated as provisions on Fair Debt Collection Practices Act ("FDCPA") and Fair Credit Reporting Act ("FCRA").

Under these federally enacted laws, every consumer is entitled to the rights stated therein. It can not be said enough that it is imperative that consumers arm themselves with the knowledge of their rights as to not become victims to mistreatments, unduly practices that are regularly practiced by some unsuspecting debt collectors and lenders.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is one of the written laws of the United States, which has been included in the United States Code under Title VIII of the "Consumer Credit Protection Act."

The main purpose and focus of this law is to guarantee "ethical practices" by debt collectors when attempting to collect consumer debt. It states the guidelines in which must be followed. It also states what your rights are and what you can expect from a debt collector. In addition, it also seeks to present consumers with an opportunity to obtain and dispute legalization of any information regarding a particular debt so as to guarantee the data's correctness.

In essence, Fair Debt Collection Practices Act encourages just, rational, and non-discriminatory treatment of consumers by forbidding debt collectors from utilizing unjust, offensive, and/or misleading actions.

The Fair Debt Collection Practices Act is applicable to qualified debt collectors capable of collecting loans that they didn't create.

However, this act doesn't theoretically pertain to department stores, banks, and other lending institutions that have their own debt collectors. Be advised that lending companies that maintain a good reputation is allowed to make use of the said practices.

Take copious notations of the following provisions under the Fair Debt Collection Practices Act:

1. Debt collectors are only allowed to contact other people, aside from the debtor himself, only to find out any whereabouts of the debtor. They are not allowed to reveal that you are in debt or the amount.

2. Debt collectors aren't allowed to contact the debtor before 8:00 a.m. and after 9:00 p.m. local time. (ie., your local time not theirs).

3. Debt collectors aren't permitted to intimidate, pressure, or make threats to the consumer with legal action to receive payment for a debt unless a lawsuit has been planned, nor can they threaten arrest.

Fair Credit Reporting Act

The Fair Credit Reporting Act upholds the confidentiality, discretion, and truth of information as used in creating customer credit reports. It seeks to control the distribution, collection, and utilization of "consumer credit information."

Under this law, the credit reporting agencies are required to uphold absolute, full, and accurate files and information.

With this act, consumers are entitled to receive their credit reports and to take actions to validate the correctness of information contested by a customer.

The consumers are entitled to such actions under this law:

1. Credit bureaus are permitted to provide credit reports only to those with a lawful business causes

Credit bureaus are not allowed to disclose any information or credit report to institutions that have no legal basis as to their request for a particular credit report information. Only entities such as insurers, employers, creditors, and government agencies are allowed to receive an individual's credit report as part of the evaluation process.

2. The consumer's right to know regarding the denial of credit.

In cases like denied credit, consumers have the right to know about the details of such report. With this, consumers can identify which credit bureau issued such report.

In this way, the consumer will be able to check if there has been any discrepancy.

These are just some of the rights consumers can enjoy under the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. To find more out, visit http://www.fdcpa.gov .

With these laws, the rights of the consumer to a just and fair treatment are upheld.


About the Author

Jay Sutton is website owner of Debt and Credit Solutions who is well-versed in the
knowledge and laws of debt and credit related laws. See http://www.101-debt-solutions.com for more information