According to the Federal Reserve Consumer Reports, Americans have over $813 billion revolving credit debt as of Sept. 2010. The U.S. Census Bureau estimates that in 2010, 181 million Americans carry over 1.4 billion credit cards. Federal and California Fair Credit Acts help protect consumers' privacy, establish rights regarding information maintained by lenders and protect credit card users from abusive debt collection activities.
Debt Collection Limitations
California's Fair Debt Collection Practices Act supplements the federal Fair Debt Collection Practices Act. Federal and state laws prohibit abusive behavior by debt collectors when consumers default on credit card debts. Abuse includes profane language, threats of harm and harassing calls. Under California Civil Code Section 1788, agencies cannot call consumers before 8 a.m. or after 9 p.m. Debtors have the right to specify the hours they prefer to be called or to demand that all contact cease. All correspondence from collection agents must protect consumers' privacy by ensuring envelopes contain no information revealing the subject matter. Debt collectors must always identify themselves by name or the agency they represent.
Contact with Employers
Under California Civil Code Sections 622 through 627, debt collectors may contact a debtor's employer to verify employment and business address, or to notify employers of court-ordered wage garnishment. Agencies must first contact employers in writing. California debtors have the right to prohibit debt collectors from calling or writing them at work. Debtors also have the right to demand debt collectors cease all contact; however, this may leave the collectors with no recourse except to seek court-ordered garnishment.
Records of Personal Information
The federal Fair Credit Reporting Act requires all credit card issuers and credit bureaus such as Experian and Equifax to maintain accurate records. Consumers have the right to information about data maintained, to protection of the privacy of the records and to have errors corrected within 30 days. If information furnished to a lender by a credit bureau results in an adverse decision -- such as refusal of credit -- the lender must notify the consumer about the reason for the adverse decision and the source of the information. Consumers have the right to a free copy of any reports used to make adverse decisions.
Chargeback Rights
California's Song-Beverly Credit Card Act of 1971 supplemented the federal Fair Credit Reporting Act. This California statute -- outlined in Civil Code Section 1747-1748 -- is also referred to as the "chargeback rights" law. It defines required actions by credit card issuers and merchants when consumers dispute a credit-card charge. Card holders have 60 days from the first statement received that contains the disputed charges to request -- in writing -- that the charges by removed and why. If a bank issued the credit card it must credit the consumer's account and resolve the issue with the merchant. If the credit-card owner waits over 60 days he must use the "claims and defenses" process which limits protests to amounts over $50, plus the charges must involve a merchant located within 100 miles of the buyer. However, under California law, the merchant's location is the same as the consumer's home for purchases made by mail or telephone from the buyer's home.
Consumer Complaints
The California Attorney General's office answers questions and accepts complaints at its public inquiries line. The Attorney General's unit may contact the collection agency on the California's consumer's behalf to resolve the problem or educate the collection agency about California's laws. The Federal Trade Commission enforces the Federal Fair Debt Collection Practices Act. Consumers can contact the FTC's Consumer Response Center.
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