People have very less knowledge about consumer laws. They should be aware of them when they deal with their credit.

1-The Lending Act

According to this law, when you go to a creditor, he must tell you the true cost of borrowing, so that you can assess the actual amount of charges. This information must be provided in writing, along with the finance charge and the APR before you sign the contract. The method of calculating the balance on which a finance charge is paid must also be disclosed.


This act facilitates you to change your mind if you choose your home as security in a transaction.

2-3 day right of rescission

The first 3 day right of rescission provides you with 3 business days to cancel the transaction and the creditors are bound to give you this notice before the transaction. Before signing any contract you must ask for this information. It's your right.

2- The Fair Credit Reporting Act

This law regulates the activities carried out by credit reporting agencies
or credit bureaus and gives the FTC
responsibility for enforcement. If any company, with whom you have signed a
contract, carries out an irresponsible act against you, then report to FTC.

3- The Fair Credit Billing Act

Many creditors don't correct your billing
errors, which cost you extra charges and damage your
credit score. This law establishes procedures that require the creditors
to promptly correct any billing errors and forces creditors to credit your payments.
The consumer is also allowed to withhold payment on damaged goods.

4- The Fair Debt Collection Practices Act

Many creditors harass the borrowers through phone calls. Too many calls asking repeatedly about the money they lent bring a huge stress on the borrower. This act establishes the guidelines for collectors to follow in contacting the borrower. They cannot call you at your place of employment, or contact you before 8 am or after 9 pm, unless you have agreed with them. The act also underlines the fact that creditors have to send you a written report of your supposed debt and what you will do if you think you can't give them the money.

5- The Equal Credit Opportunity Act

By this law creditors are forbidden to discriminate in the granting of credit due to sex, marital status, race, religion or age.

6- The Electronic Funds Transfer Act

This law provides protection to a consumer in all stages of modern banking techniques. These include ATM, telephone transfers, computer transactions, etc.


The limits for the first time user's liability in case of lost and unauthorized
use of debt or electronic cards are nearly same as for the credit
cards. In case you notify the bank within 2 days, you are liable for $50.
If you miss the deadline you will be liable for $500. After 60 days you will
be liable for the entire amount.

7- The Credit Repair Organization Act

This law prohibits any credit repair
organization to force a client to make a false and misleading statement
to a credit bureau. Consumers have 3 days right of cancellation which has to
be written on the contract

This law gives the consumer 3 day right of cancellation, which needs to be in writing on the contract and must direct you on how to cancel it. This document must have the details of all the services, guarantees, timeframe for the services that will be provided and the cost for the customer.

These laws are for consumer rights protection. Many credit companies break these laws and due to lack of proper education, people get distressed. If any company breaks any law you can report to the credit bureaus.