All financial institutions must comply with the Truth in Savings Act, which requires them to disclose the Annual Percentage Yield, or APY, on savings accounts. The APY tells you how much money you would earn if you kept $100 in the account for one year.
The Act also requires that the institution credit your entire deposit, instead of crediting a portion of your deposit or using a low balance per month method. Institutions must list their fees for bounced checks, stop payment orders, certified checks, wire transfers or similar items, and cannot advertise "free" checking if there are hidden charges or requirements such as a minimum balance.
There are a number of Federal agencies, as well as state and local offices, that regulate banks and other financial institutions. For specific information about how to reach these offices by mail, fax, telephone, E-mail and through the Internet, check the table of contents or the index. Here's an overview of which agencies regulate which financial institutions:
State chartered banks that are not members of the Federal Reserve System - Federal Deposit Insurance Corporation
State chartered banks and trust companies that are members of the Federal Reserve System - Federal Reserve System
Banks with national in the name or N.A. after the name - Comptroller of the Currency, U.S. Department of the Treasury
Federally chartered credit unions - National Credit Union Administration
Federal savings and loans, and Federal savings banks - Office of Thrift Supervision
State chartered banks - State banking authorities
The Equal Credit Opportunity Act guarantees you equal rights in dealing with anyone who regularly offers credit, including banks, finance companies, stores, credit card companies and credit unions. A creditor is someone to whom you owe money. When you apply for credit, a creditor may not:
Credit card issuers offer a wide variety of terms. Consider and compare all the terms, including the following, before you select a card:
If you pay bills in full each month, the size of the annual fee or other fees will be more important. If you carry a balance, the APR and the balance computation method are key terms to consider.
Know your credit card protections. When you have used your card for a purchase and you don't receive the goods or services as promised, you might be able to withhold payment for the goods or services. Card issuers must investigate billing disputes. (See the section on Credit Billing and Disputes, page 26)
If your card is lost or stolen, you are not liable for any charges if you report the loss before the card is used. If the card is used before you report it missing, the most you will owe is $50.
Protect your credit record. Pay bills promptly to keep finance charges low and to protect your credit rating. Keep track of your charges and don't exceed your credit limit. Report any change of address prior to moving, so that you receive bills promptly.
Using an Automated Teller Machine (ATM) or debit card and a personal identification number (PIN), consumers can withdraw cash, make deposits, or transfer funds between accounts and pay for retail purchases. Although a debit card looks like a credit card, the money for the purchase is transferred immediately from your bank account to the store's account.
Some ATMs charge a fee if you are not a member of their network or are making a transaction at a remote location. ATMs must disclose the fee on the terminal screen or on a sign next to the screen.
Report a lost or stolen ATM or debit card to the issuer immediately. If you report an ATM card missing before it's used without your permission, you are not responsible for any unauthorized withdrawals. Federal regulations limit your liability to $50 if you report the loss within two business days after you realize your card is missing, and to $500 if you report the loss between 2 and 60 days. Under Federal law you could lose all the money in your bank account and the unused portion of your line of credit established for overdrafts if you fail to report an unauthorized transfer or withdrawal within 60 days after your bank statement is mailed to you. However, self-imposed industry rules limit your liability to zero if you report the loss within two business days, and to $50 if you report it more than two business days after realizing your card is missing.
Purchases made with a debit card are handled in one of two ways: either you enter your personal identification number, as you would at an ATM, or you sign for the purchase, similar to a credit card transaction. Ask for a debit card that must be used with a PIN to make it harder for thieves to use your lost or stolen cards or account numbers.
Keep your PIN a secret. Don't write your PIN on the card or on a slip of paper kept with your card. Take your ATM receipt after completing a transaction. Reconcile all ATM receipts with bank statements as soon as possible.
When you use a debit card for a point-of-sale purchase, these purchases will be shown on your periodic statement from your bank account. If there is an error on your account, contact the issuer of the card (for example, the oil company) at the address or phone number the company provided.
When you use an electronic funds transfer, federal law does not give you the right to stop payment. It is up to you to resolve the problem with the seller.
Stored-value cards, issued by some financial institutions and merchants, contain cash value stored electronically on the card itself. Stored-value cards and the transactions you make using them may not be covered by the Electronic Funds Transfer Act, which means you may not be covered for loss or misuse of the stored-value card.
The Fair Credit Reporting Act controls how your credit history is kept, used and shared among lenders. It is designed to promote accuracy and ensure the privacy of the information used in credit reports.
The three major national credit bureaus, Experian (formerly TRW), Equifax and TransUnion, have credit files on millions of consumers nationwide. Their toll-free numbers are:
- Equifax 1-800-685-1111
- Experian 1-800-682-7654
- TransUnion 1-800-916-8800
Anyone who takes action against you in response to a report supplied by a credit reporting agency (CRA) -such as denying your application for credit, insurance, or employment- must give you the name, address, and telephone number of the CRA that provided the report.
Make sure your report is accurate. You have a right to know what is in your credit report, including medical information and, usually, the sources of the information. You can get your report for free if a company takes adverse action against you based on the report and you request your report within 60 days of receiving the notice of the action. You are entitled to one free report a year if you can prove that you are unemployed and plan to look for a job within 60 days, if you are on welfare, or if your report is inaccurate because of fraud. Otherwise a CRA may charge you up to $8 for a copy of your report.
If you find inaccurate or incomplete information in your report, contact both the CRA and the company that provided the information to the CRA. Tell the CRA in writing what information you believe is inaccurate. The information provider must investigate and report the results to the CRA. If the information is incorrect, it must notify all nationwide CRAs to also correct your file.
If the reinvestigation does not solve your dispute with the CRA, ask that your statement of the dispute be included in your file. A notice of your dispute must be included anytime the information provider reports the item to a CRA.
An employer or a prospective employer can only get your credit report if you give written consent. Creditors, employers, or insurers cannot get a report that includes medical information without your approval. Only people with a legitimate business need can get a copy of your report.
A CRA can report negative information for seven years, except bankruptcy information which may be reported for ten years. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.
If you want to be removed from lists for unsolicited credit and insurance offers, ask the CRA for a form to complete that will permanently keep your name off the lists drawn from credit file information.
Credit repair companies advertise that they can erase bad credit and create a new credit identity legally, all for a hefty fee. Don't believe it. Only time, hard work, and a personal debt repayment plan will improve your credit report.
Credit repair companies are prohibited under the Credit Repair Organizations Act from requiring you to pay until they have completed the promised services. No one can legally remove accurate and timely negative information from a credit report. No credit repair company can do anything you can't do for yourself for free.
By law, credit repair organizations must give you a copy of the "Consumer Credit File Rights Under State and Federal Law" before you sign a contract. They must give you a written contract that spells out your rights and obligations and gives you three days to cancel without paying any fees.
Some credit repair companies promise to help you establish a whole new credit identity. You can be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. It is a federal crime to make false statements on a loan or credit application, to misrepresent your social security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretences.
Your state may have a law strictly regulating credit repair companies. Contact your local consumer affairs office, your state attorney general or the Federal Trade Commission if you have lost money to credit repair scams. The National Fraud Information Center accepts consumer complaints at 1-800-876-7060.
You can rebuild your good credit by handling credit responsibly. Counseling services provide assistance to individuals having difficulty budgeting their money and/or meeting necessary monthly expenses. Many organizations, including credit unions, cooperative extension services, family service centers and religious organizations, offer some type of free or low-cost credit counseling.
One source of information about credit counseling is the National Foundation for Consumer Credit (NFCC). The foundation has 1,400 members that provide money management techniques, debt payment plans and educational programs to help consumers learn to budget and use credit wisely. Many of its members are locally managed, nonprofit agencies operating under the name Consumer Credit Counseling Service (CCCS). To locate the nearest NFCC member office, call toll-free, 24 hours a day, 1-800-388-2227 or visit their web site at www.nfcc.org.
Debt Counselors of America (DCA) is the nation's first, nonprofit, Internet-based debt counseling service. DCA assists families and individuals with debt, credit, money and financial problems or difficulties through their web site at www.dca.org, as well as through one-on-one counseling at 1-800-680-DEBT. DCA's web site includes a wealth of information to help consumers improve their financial lives.
The Fair Credit Billing Act applies to credit card and charge accounts and to overdraft checking. It can be used for:
While the bill is being disputed and investigated, you need not pay the amount in dispute. The creditor or card issuer may not take action to collect the disputed amount, including reporting the amount as delinquent, and may not close or restrict your account.
If there was an error or you do not owe the amount, the creditor or card issuer must credit your account and remove any finance charges or late fees relating to the amount not owed. For any amount still owed, you have the right to an explanation and copies of documents proving you owe the money.
If the bill is correct, you must be told in writing what you owe and why. You will owe the amount disputed plus any finance charges. You may ask for copies of relevant documents.
The Fair Debt Collection Practices Act applies to those who collect debts owed to creditors for personal, family and household debts, including car loans, mortgages, charge accounts and money owed for medical bills. A debt collector is someone hired to collect money owed by you. A debt collector may not:
If you are contacted by a debt collector, you have a right to a written notice, sent within 5 days after you are first contacted, telling you the amount owed, the name of the creditor, and what action to take if you believe you don't owe the money.
If you believe you do not owe the money or don't owe the amount claimed, contact the creditor in writing and send a copy to the debt collection agency with a letter telling them not to contact you.
If you do owe the money or part of it, contact the creditor to arrange for payment.
To file a complaint, contact your state or local consumer protection agency and the FTC.
Do your detective work before you invest. Deceptive or fraudulent sales pitches often misrepresent or leave out facts in order to promote fantastic profits with little risk. These sales pitches involve persistent, high-pressure contacts allowing little or virtually no time for reflection or investigation by the investor. Beware if a salesperson:
Only commodity brokers that are registered with the U.S. Commodity Futures Trading Commission (CFTC) can sell exchange-traded futures contracts and options on futures to the public lawfully. The National Futures Association (NFA), a CFTC-designated self-regulatory organization, maintains a toll-free hotline at 1-800-676-4NFA (4632) to verify the registration status and disciplinary history (including customer complaints) concerning registered futures/options firms and registered salespersons. From outside the United States, call 312-781-1410. See page 126 for how to contact CFTC.
Privacy is an important principle. As a consumer, you benefit when information about you is used to approve your credit application, notify you about a sale at your favorite store, stock the supermarket shelves with more products you like, or improve customer service at a business you patronize. You may also be happy to have your information passed along to other companies that want to offer you their products or services. On the other hand, you may not want to receive unsolicited telemarketing calls or mail. And you could be treated unfairly, or even become a victim of crime, if your personal information is inaccurate or misused.
You have privacy rights for certain personal records such as you credit reports (see page 25), but many situations aren't covered by the law. To address consumers' privacy concerns, some companies and industry groups have adopted voluntary policies. Look for that information in sales literature, on web sites, or on any forms companies ask you to fill out. If you don't see anything about how your personal information will be handled, ask. By doing business with companies whose privacy practices meet your approval, you can protect yourself from abuse and use your purchasing power to help promote good privacy policies.
In addition to various federal privacy laws, many states have their own privacy laws concerning telemarketing, employment, using social security numbers, credit card or checking account numbers, medical records, mailing lists, credit reports, debt collection, computerized communications, insurance records and public data banks. Check with your state or local consumer agency to find out where to get information about specific privacy rights.
Several Federal government agencies enforce product safety regulations and provide recall information. Consult the list below and then contact the appropriate Federal agency using the information beginning on page 126.
Cars-National Highway Traffic Safety Administration
Food-U.S. Department of Agriculture; Food and Drug Administration (FDA)
Seafood-FDA and U.S. Department of Commerce
Drugs, medical devices-FDA
Toy, baby and play equipment, household products-U.S. Consumer Product Safety Commission
Other safety issues, such as building codes, are under the jurisdiction of state and local agencies. Contact your state or local consumer office for assistance in locating the appropriate agency.
Depending on the laws in your state, certain types of travel sellers may have to be registered and insured. In some states, advance payments for travel must be placed in an escrow account until the services are actually provided. There may also be specific regulations for prizes or "free" gifts. Contact your state or local consumer protection agency to find out about any laws that might protect you.
If you would like additional information on any of the topics listed above, or on other consumer issues such as health, education, parenting, housing, or food and nutrition, you can find hundreds of helpful federal publications in the free Consumer Information Catalog. For a free Catalog, send your name and address to Consumer Information Center, Pueblo, CO 81009; or call 1-888-8-PUEBLO, that's 1-888-878-3256.
To view and download the complete text of any of the publications in the Catalog, visit the Consumer Information Center web site: www.pueblo.gsa.gov. You can also search the web site for the topics you're interested in, link to other Federal agencies and consumer offices, get a calendar of upcoming events and the latest consumer news, find new publications and special resources that may not be available in print, and order print copies of all of the publications listed in the Catalog.
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