Federal Credit Protection Act

Consumers are protected under a series of credit protection acts to help mitigate unethical lending practices. The Federal Credit Protection Act, also known as the Consumer Credit Protection Act, encompasses these acts and sets standards for the credit card and lending industries. Consumers should learn their rights to better navigate disputes with creditors and ensure they are treated fairly.

Equal Credit Opportunity Act

Consumers are protected from discrimination under the Equal Credit Opportunity Act of 1974. This federal law "prohibits discrimination in credit transactions on the basis of certain personal characteristics, such as race, color, religion, national origin, sex, marital status or age," explains the Federal Reserve bank website. Creditors are also prevented from denying a credit application because of a client's economic hardship. For example, whether a consumer receives public assistance cannot be a consideration on a credit application.

Fair Credit Billing Act

Not all information reported on your monthly bills is correct. The Fair Credit Billing Act of 1974 requires that a credit card company immediately fix any error on your bills without penalty to your credit score. This includes crediting your bill when charges have been incorrectly applied. It also allows you to dispute any billing errors on your credit card statements or refuse payment for any damaged goods.

Fair Credit Reporting Act

Credit bureaus update your credit score each month based on information received from creditors. Occasionally, false information is reported that can cause your score to be negatively impacted. The credit bureaus have a responsibility through the Fair Credit Reporting Act of 1970 to remove inaccurate or misleading information from your credit report. Under this law, consumers have a right to see all information contained in their credit files and can request corrections to errors.

Truth in Lending Act

According to the Federal Reserve Bank, the Truth in Lending Act requires that lenders use standardized procedures for calculating the cost of credit and for communicating credit terms so you can tell how much it will cost to borrow money. This act also limits your liability to $50 in the event your credit account is compromised due to identity theft or unauthorized charges or if your credit card is lost. Credit card companies also are prevented from issuing consumers credit cards in the mail as a form of solicitation.