Backyard Credit Repair - Keeping the Neighborhood at Home.

Consumer Debt and Credit Repair Laws

1. Consumer Credit Protection Act (CCPA)
2. The Truth in Lending Act (TILA)
3. The Restriction on Garnishment Act
4. The Credit Repair Organizations Act
5. The Fair Credit Reporting Reform Act (FCRA)
6. The Equal Credit Opportunity Act (ECOA)
7. Fair Debt Collection Practices Act (FDCPA)
8. Electronic Fund Transfers Act (EFTA)
9. The Fair and Accurate Credit Transaction Act (FACTA)
10. Uniform Commercial Code Laws (UCC Laws)
11. Fair Debt Collection Practices Act (FDCPA)

1. Consumer Credit Protection Act (CCPA)

The Consumer Credit Protection Act (CCPA) (1969, P.L. 90-321) is the collection of federal statutes found in Title 15 of the United States Code. Congress has amended the CCPA on several occasions by adding individual federal statutes, called subchapters, each focusing on a specific consumer issue. The following are a list of the subchapters found in the CCPA.

Subchapter I of the CCPA is the Truth in Lending Act. Refer to number 2.

Subchapters II and IIA of the CCPA are the Restriction on Garnishment Act and the Credit Repair Organizations Act . Refer to numbers 3 and 4.

Subchapter III of the CCPA is the Fair Credit Reform Act. Refer to number 5.

Subchapter IV of the CCPA is the Equal Credit Opportunity Act. Refer to number 6.

Subchapter V of the CCPA is the Fair Debt Collection Practices Act. Refer to number 7.

Subchapter VI of the CCPA is the Electronic Funds Transfer Act. Refer to number 8.

2. The Truth in Lending Act (TILA)

The purpose of this act was to ensure the meaningful disclosure of significant credit terms to consumers. The act requires sellers and lenders to disclose certain credit terms with uniform terminology, location, and meaning in the contract, regardless of where the parties sign the agreement.

The most specific requirements imposed by TILA are found in Regulation Z. TILA, along with Regulation Z, contain provisions regarding the issuance of credit cards, liability for unauthorized use of credit cards, credit card billing error resolution procedures, notice and disclosure requirements for credit card solicitations, disclosure requirements for high-rate mortgages and reverse mortgages, and rescission provisions for various types of transactions in which a security interest is retained in a consumer’s principal residence.

3. The Restriction on Garnishment Act

This law provides a maximum level of wage garnishment for any judgment debtor and prohibits an employer from terminating an employee based solely on the fact that the employee’s wages have been garnished.

4. The Credit Repair Organizations Act

This act pertains to credit repair organizations that provide services to individuals with debts resulting from consumer credit transactions. This law prohibits certain types of deceptive practices, requires mandatory disclosures in any contract signed by a customer of a credit repair organization, and allows the customer three business days from the date the contract is signed to rescind the contract.

5. The Fair Credit Reporting Reform Act (FCRA)

The Fair Credit Reporting Act created rules that govern reporting of information as it appears on credit reports. Initially, the parameters of reporting guidelines in the Fair Debt Collection Practices Act were vague. Most information could remain on a consumer's credit report for approximately 7 years (Bankruptcy could be reported for up to 10 years) but the limits of when the seven-year period began and ended were not clearly defined. In 1996 the Consumer Credit Reporting Reform Act was created to clarify the credit reporting guidelines that are set forth in the Fair Credit Reporting Act.

In accordance with the Fair Credit Reporting Act, the following information that was reported to a credit bureau on or after January 1, 1998 is not permitted to appear on a consumer's credit report. Information that was reported to a credit bureau earlier than January 1, 1998 may not be subject to the same requirements:

Bankruptcies that date back more than 10 years from the date of entry of the order of relief from or the date of adjudication.
Civil suits, civil judgments, or records of arrest that date back more than 7 years from the date of entry or that exceed the statute of limitations.
Paid liens that date back more than seven years from the date of the report.
Accounts that were placed for collection or charged off which date back more than seven years beginning 180 days after the last payment was due prior to the account being turned over to collections or charged off.
Any other derogatory information other than records of conviction for crimes that date back more than 7 years from the date of the report.

The above referenced guidelines are not applicable for any consumer report to be used in connection with any of the following:

A credit transaction involving or expected to involve a principal amount of $150,000 or more.
Underwriting life insurance, which may be expected to include a value of $150,000 or more.
Pre-screening for employment of any individual at a salary of $75,000 or more.

Other consumer reporting guidelines:

Bankruptcy

For the protection of the consumer, consumer reports are required to meet other guidelines. If the source that provides information regarding a bankruptcy indicates what chapter was filed, the reporting agency must include the chapter on the credit report. Additionally, if a bankruptcy is withdrawn before "final judgment" and the agency has received information confirming that it was withdrawn, the agency must indicate it on the consumer report.

Accounts that are voluntarily closed by the consumer

When including information that is relative to a consumers account on a report, if an agency receives verification that the consumer voluntarily closed the account, they are responsible for indicating on the report, that the consumer voluntarily closed the account.

Disputes

An agency is responsible for noting that there is a dispute over information that is reported on a consumer report if the consumer directly notifies the agency.
It is the agency's responsibility to investigate and record the status of the disputed information or delete the information from the consumer report.
There is a 30-day time frame that begins on the day the agency receives the formal notice of dispute from the consumer, during which the investigation must be completed. If, during the course of the investigation, the agency receives additional "relevant" information pertaining to the dispute, they are responsible for extending the investigation period for an additional 15 days.
The agency does not have to provide a 15 day extension if, during the initial 30 day period, it determines that the information that a consumer has supplied to support their dispute is "inaccurate," "incomplete," or unverifiable.
If, after investigating the dispute, the agency determines that the furnisher of the disputed information (creditor) provided "inaccurate or incomplete," information, the agency must correct the information as it is reported on the file, or delete the incorrect information.
If information is deleted as a result of a dispute investigation and it is in excess of three days since receiving notice of dispute from a client, the agency must mail written notice to the consumer of the results of the investigation within 5 business days.
The written notice has to include a statement that the investigation is complete and a copy of the consumer report that reflects any changes that resulted from the dispute investigation. It must also include a notice advising that the consumer has the right to add a statement to their file that disputes the "accuracy and completeness of the information" (see consumer statement.)
The agency must provide a confirmation of the consumer's right to have the agency provide notification to any person who previously had received a copy of the incorrect report within 5 business days. Specifically, the agency must submit a copy of the corrected report to any person who received the report within two years prior for employment purposes, and to any person who received the incorrect report "for any other purpose" within six months prior to the correction.
If the consumer requests, the bureau is responsible for including a description of the procedure that was used to determine the accuracy and completeness of the information within 15 days after receiving the request.
If an agency deletes information as the result of the dispute within three business days or less from the day that the agency received a notice of dispute from a client, they may notify the consumer by telephone of the deletion.
The agency is responsible for reviewing all the "relevant information" that a consumer provides but they can end the investigation if the consumer does not provide enough information to support their investigation. The agency may also terminate the investigation if they "reasonably determine" that the dispute is "frivolous" or "irrelevant" and they must notify the consumer within 5 days.
The notification must include the reason for terminating the investigation and it must identify information that is required to investigate the dispute.
When an agency provides notification of the results of an investigation to a consumer, they must include a notice that the consumer has the right to request that the agency submit notification to other agencies through an automated system that enables them to share information with other bureaus.

Reinserting previously deleted material

Information that has previously been deleted from a report file may only be re-added if the creditor who is reporting the information "certifies" that the information to be re-added is "complete and accurate."

Within 5 days of the reinsertion of information, the agency must notify the consumer in writing.

The agency is responsible for providing information identifying the party that provided the information that lead to the reinsertion of information on a report.

The agency must also provide the address and contact information for the party who provided the information, and they must provide notification to the consumer that the consumer has the right "to add a statement disputing the accuracy and completeness of the disputed information."

Consumer reporting agencies are responsible for taking "reasonable procedures to prevent the reappearance of information" that has previously been deleted.

Agencies that maintain files on a nationwide basis must have an automated system that allows parties who provided the information to the agency (creditor) to be able to report "incomplete or inaccurate information," as determined by the investigation to other reporting agencies.

Your right to include a consumer statement

If you disputed information that appears on your credit report and the credit bureau determines that you have not provided enough information to warrant changing the report or deleting the information, you are entitled to prepare a statement to be added to your credit report. The statement must be limited to 100 words.

Preparing a statement will give you an opportunity to fully explain the reason why you are disputing the information despite the fact that you were unable to provide enough supporting evidence to have the information changed or removed.

Guidelines governing how creditors report information to the credit bureau(s)

They cannot report information that they know is incorrect.
They cannot ignore information that contradicts information that they have on file.
They must notify the credit bureau if a debtor disputes information with them.
They must indicate when a consumer voluntarily closes an account.

They must investigate a consumer dispute within 30 days of receiving notice.

6. The Equal Credit Opportunity Act (ECOA)

The purpose of the ECOA is to prohibit discrimination in credit transactions on one or more of nine bases: race, color, religion, national origin, sex, marital status, age, the fact that all or part of income derives from a public assistance program, or the fact that an applicant has in good faith exercised any right under the compendium of statutes in the Consumer Credit Protection Act.

The ECOA applies to every aspect of credit transactions, from advertising of credit availability to the termination of existing credit. The act applies whether the credit is business or consumer credit, whether the obligation involves a finance charge or installment payments, or whether the person aggrieved by the discrimination is an individual or a business organization. The ECOA applies to the extension of credit where the right to defer payment of an obligation is granted.

7. Fair Debt Collection Practices Act (FDCPA)

The fair debt collection practices act offers protection from illegal and unethical debt collection tactics. It also contains the rules for penalties that can be levied . The FDCPA also notes when state law can override federal law when it comes to collection or credit disputes.

The FDCPA restricts debt collectors from engaging in conduct including the following:

Contacting a third party who does not owe the debt, such as a relative, neighbor, or your employer. Co-signers to the debt, however, may be contacted by the debt collector;
Threatening to refer your account to an attorney, harm your credit rating, repossession or garnishment, without actual intention of action on the threat. Please note that a debt collector may warn you of an actual impending intention to refer your case to an attorney or to report your debt to a credit agency. What they cannot do is use a false threat to try to intimidate you into paying;
Making repeated telephone calls or telephone calls at unreasonable times. The act defines unreasonable times as contact before 8:00 AM or after 9:00 PM, unless you have given the debt collector permission to contact you during those hours;
Placing telephone calls to an inconvenient place. For example, contacting you at work in violation of a policy by your employer that is known to the debt collector or following a request by you that they not contact you at work;
When placing a telephone call to you at work, informing your employer of the purpose of the call, unless first asked by the employer;
Using obscenity, racial slurs or insults;
Sending letters which appear to have come from a court;
Seeking collection fees or interest charges not permitted by your contract or by state law;
Requesting post-dated checks with the intention to prosecute if they bounce;
Suing in courts far removed from your place of residence;
Making certain false representations in association with efforts to collect the debt, including the false claim that the person contacting you in relation to the debt is an attorney, falsely claiming to have started a lawsuit, using a false name, or using stationery that is designed to look like an official court or government communication;
Using false claims to collect information about the debtor, such as pretending to be conducting a survey;
Threatening you with arrest if you do not pay the debt.

8. Electronic Fund Transfers Act (EFTA)

The purpose of the EFTA is to establish the basic rights, responsibilities, and obligations of consumers and financial institutions involved in transactions using electronic money transfer. The act provides limitations on the liability of consumers for the unauthorized use of access devices such as the codes, cards, or devices used to reach funds through an automated teller machine (ATM). It requires federal institutions to provide certain disclosures to consumers prior to issuing an access device, and sets out procedures for the investigation of the unauthorized use of an access device.

9. The Fair and Accurate Credit Transaction Act (FACTA)

The Fair and Accurate Credit Transactions Act of 2003 (FACT Act or FACTA, Pub.L. 108-159) is a United States federal law, passed by the United States Congress on December 4, 2003, as an amendment to the Fair Credit Reporting Act. The act allows consumers to request and obtain a free credit report once every twelve months from each of the three nationwide consumer credit reporting companies (Equifax, Experian and TransUnion). In cooperation with the Federal Trade Commission, the three major credit reporting agencies set up the website, annualcreditreport.com, to provide free access to annual credit reports. These reports will not contain credit scores and may be a little more difficult to decipher.

10. Uniform Commercial Code Laws (UCC Laws)

The Uniform Commercial Code (UCC or the Code) is one of a number of uniform acts that have been disseminated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America. This objective is deemed important because of the prevalence today of commercial transactions that extend beyond one state (for example, where the goods are manufactured in state A, warehoused in state B, sold from state C and delivered in state D). UCC laws deal primarily with transactions involving personal property (movable property), not real property (immovable property).

These laws or codes govern many subjects regarding such as sales, leases, contracts and securities. They govern transactions that are paid by personal or corporate check.

There are many state adaptations and variations to the federal law which cover addendums and legal stipulations when satisfying a debt.

11. Fair Debt Collection Practices Act (FDCPA)

The fair debt collection practices act offers protection from illegal and unethical debt collection tactics. It also contains the rules for penalties that can be levied. The FDCPA also notes when state law can override federal law when it comes to collection or credit disputes.