The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Consumer credit protection laws regulate creditors and lenders so they don’t take advantage of their customers with unfair fees, lending practices or methods of collecting payment. Of course, consumer rights were not always formally recognized.
Before the 1960s, the concept of consumer rights was virtually nonexistent. There were no protective measures to help consumers when they dealt with creditors, credit reporting or even credit repair. Individuals who were often the most desperate for help were taken advantage of by predatory lenders and creditors. As consumerism took a sharp spike upward, the government recognized that legislation would need to be put into place to protect consumers.
Keep reading for a complete overview of the history of consumer rights, or skip to the end to see a graphic summing up the most important points.
In 1962, President Kennedy introduced to Congress the need for consumer rights protection. This resulted in the Consumer Bill of Rights, which started with four main points. Those points were:
After just a few decades, by 1985, the Consumer Bill of Rights was expanded to include four other sections.
In 1968, the Truth in Lending Act (TILA) was enacted by the federal government. The TILA is part of a collection of laws under the Consumer Credit Protection Act (CCPA). The CCPA was created to protect consumers by enforcing fair reporting around credit and prohibiting deceptive advertising by creditors.
The TILA protects consumers from unfair or incorrect credit card billing and charging practices. It also states that all lenders must clearly report to borrowers the total cost of borrowing money. This includes communicating the APR, any interest and fees over the entire span of a loan term, the number of payments required, any late fees and when they apply, prepayment loan restrictions and any other essential terms.
Another part of the CCPA is the Fair Credit Reporting Act (FCRA), introduced in 1970. The FCRA protects consumer information collected by credit report agencies and used by credit bureaus, medical information companies and tenant screening services.
The FCRA has two main focuses. The first is to ensure that no one other than qualified and approved parties can access a consumer’s credit information. The second purpose is to hold credit bureaus responsible for keeping accurate credit data on consumers. This means that:
The Fair Credit Billing Act (FCBA) was introduced in 1975 as a way to protect consumers from unfair credit billing processes. Most notably, this law protects people from being liable for unauthorized charges, charges with errors or undelivered goods or services on their credit cards.
Some of the most significant protections under the FCBA are:
In 1978, the Fair Debt Collection Practices Act (FDCPA) was enacted into law. After receiving countless complaints about how debt collection companies would try to gather payments, it was decided that protective measures needed to be put into place. The FDCPA regulates how debt collectors can approach consumers to avoid unethical or abusive practices.
Some of the consumer protection details offered by the FDCPA are:
In 1985, the federal government introduced the Credit Practices Rule (CPR). The Credit Practices Rule has three major provisions that keep credit contracts safe for the consumer. The provisions are:
The Fair Credit and Charge Card Disclosure Act (FCCCDA) was implemented in 1988 to amend the TILA. This law requires that credit card companies and loan agencies disclose all terms and fine print associated with credit cards, loans and lines of credit.
Some of the information creditors must share under the FCCCDA includes APRs, credit limits, outstanding balances, renewal and cancellation privileges, attachment fees and grace period extensions.
The Consumer Credit Reporting Reform Act, more commonly referred to as the Reform Act, was enacted in 1996. This law was brought forward as a reform to the FCRA. This new act modified the FCRA to provide free credit reports to anyone unemployed or on public assistance, victims of fraud or identity theft and those denied credit. Additionally, the Reform Act created new rules related to reinserting deleted information into credit reports.
The Credit Repair Organizations Act (CROA) was introduced in 1996 to ensure credit repair organizations didn’t use unfair or deceptive business practices with their clients. Some of the notable restrictions on credit repair organizations under the CROA are:
It can be helpful to check your state’s credit repair laws as well.
In 2005 the Fair and Accurate Credit Transactions Act (FACTA) was passed in an effort to help victims of identity theft. Some of the rules passed under FACTA are:
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 focused on reforming how credit card lenders charge fees, including:
The 2010 Dodd-Frank Reformation Act was created as a direct response to the 2008 financial crash. The act targeted the sectors of the financial market that are believed to have played a significant role in the market crash, including mortgage lenders, banks and credit rating agencies.
Some of the significant changes made under this act were:
Some additional acts related to consumer rights that are noteworthy are:
This history of consumer rights shows what steps the government has taken to protect consumers—and that these protections are continuously updating with the times. Ultimately, it’s best for all consumers to understand their rights so they can assert them. Lexington Law Firm cares about consumer advocacy. Our credit repair service helps people take advantage of their right to repair their credit. If this interests you, get started with our team today so you can take steps toward cleaning your credit.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
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