Consumer Protection By Law


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In addition to the many responsibilities that the consumer has in regard to credit and the maintenance of credit status, the consumer also has rights and protections that are guaranteed by law. The most important of these regulations and protections are found in the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA). Enforcement of such laws and standards falls under the jurisdiction of the Federal Trade Commission (FTC). There are also compliance issues that should be noted, namely, the OFAC regulations and now more recently, the Patriot Act.

Equal Rights and Credit Rights


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The Equal Credit Opportunity Act (ECOA) prohibits discrimination according to race or gender in regard to making credit related decisions. Each individual is to have an equal opportunity to achieve access to the credit system. In years past, minorities were frequently denied these opportunities, which is what created the necessity for such legislation. With this law in place, if you feel you have been denied credit for these reasons, you have an avenue to get help in fighting back.

The Fair Credit Reporting Act (FCRA) relates primarily to the information contained in the individual consumer's credit file and how it can be used and manipulated. Included in these regulations are specific information listed in the credit report, how this information is used, and privacy issues relating to such information. All companies who lend money or extend credit, plus any credit information collection agency, must fully comply with the statues contained herein. This act was put forth to protect consumers from predatory lending practices, unfair consumer data collection, and other abuses which were prevalent in the industry prior to its conscription.

What These Laws Mean For You

Under the protections provided by the laws above, consumers enjoy much more protection than they have in decades past. The consumer has the right to know who has viewed his/her credit report during the past year. Because so many employers now use credit reports as a part of their screening process for potential employees, the consumer has the right to review employment related access to his credit report during the two years that precede his request.


The consumer has a right to a copy of his credit report. This credit report, under some circumstances, is to be provided free of charge. This is now the case if your credit report has been used to deny you credit or a loan. In addition, a free credit report must be supplied if the consumer was denied employment, insurance or other opportunity due to information found in the report. The consumer must make the request within 60 days from the denial. When the credit report contains fraud related inaccuracies, the consumer is also entitled to a free credit report, but only once the consumer initiates the claim.

If the consumer makes a successful challenge to credit report errors, he has the right to have the corrections to his report made within 30 days. Negative information that is, for the most part, more than seven years old is not included on the credit report. In the case of bankruptcies, however, the negative effects to the credit report can last for ten years. Deletions to credit report should normally take 30-90 days to show up. This is all known as the dispute process, and is an avenue for consumers to fight back against incorrect or fraudulent information on their credit report.

Who Has Access to Your Credit Report

The consumer has legal protections relating to who is able to have access to his/her credit report. The consumer usually must consent before a potential employer can view his credit report or be notified after. Furthermore, only those who have what is termed a legally recognized need to view the credit report are given access to it. This group would include those from whom the consumer is requesting credit, prospective landlords, and now more commonly, insurance companies. It is the responsibility of the consumer to be thoroughly informed as to exactly what his rights are. The FTC, or the Federal Trade Commission’s website , is an excellent resource for those seeking such knowledge, providing easy access to a wealth of information via the Internet.

 

The ECOA prohibits discrimination according to race or gender in regard to making credit related decisions. Each individual is to have an equal opportunity to achieve access to the credit system. In years past, people of color and women were frequently denied these opportunities, which is what created the necessity for such legislation.

The FCRA relates primarily to the information contained in the individual consumer's credit file. Included in these regulations are specific information listed in the credit report, how this information is used, and privacy issues relating to such information.

The consumer has the right to know who has viewed his credit report during the past year. Because so many employers now use credit reports as a part of their screening process for potential employees, the consumer has the right to review employment related access to his credit report during the two years that precede his request.

The consumer has a right to a copy of his credit report. This credit report, under some circumstances, is to be provided free of charge. These circumstances include being on welfare or being unemployed and attempting to find employment during the 60-day period from the request for the report. In addition, a free credit report must be supplied if the consumer was denied employment, insurance or credit due to information found in the report. The consumer must make the request within 60 days from the denial. When the credit report contains fraud related inaccuracies, the consumer is also entitled to a free credit report.

If the consumer makes a successful challenge to credit report errors, he has the right to have the corrections to his report made within 30 days. Negative information that is, for the most part, more than seven years old is not included on the credit report. In the case of bankruptcies, however, the negative effects to the credit report can last for ten years. Deletions to credit report should normally take 30-90 days to show up.

The consumer has legal protections relating to who is able to have access to his credit report. The consumer usually must consent before a potential employer can view his credit report. Furthermore, only those who have what is termed a legally recognized need to view the credit report are given access to it. This group would include those from whom the consumer is requesting credit, landlords and insurance companies. It is the responsibility of the consumer to be thoroughly informed as to exactly what his rights are. The FTC is an excellent resource for those seeking such knowledge, providing easy access to a wealth of information via the Internet.

 

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