Financial difficulties are stressful enough. If a debt collector is hounding you with unscrupulous methods, then that can make matters worse. In spite of the growing ability to gather financial information, federal laws limit what other people can collect about a person’s financial history and what they can do with it.

Continue reading to learn more about your consumer rights when it comes to debt collection.

Consumer Credit Protection Act

The Consumer Credit Protection Act (CCPA) of 1968 is federal legislation that created protections for consumers from banks, credit card companies, and other lenders. The law requires lenders to explain the actual cost of borrowing money in terms that consumers understand. The CCPA contains several important laws, including the Truth in Lending Act, the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act.

The CCPA was the first consumer protection law, and it outlines a number of laws that regulate specific aspects of lending. Title I of the act describes how lenders explain loan terms to borrowers. There are federal guidelines regarding wage garnishment in Title III. Guidelines for credit reporting agencies are found in Title VI.

The Right to Financial Privacy Act

Under federal law, the government may not access personal financial information. The federal government passed the law in response to the 1976 Supreme Court decision in United States v. Miller, which found that consumer bank account records are not protected by constitutional privacy rights.

Under the Financial Privacy Act, government officials must obtain your written consent or obtain a subpoena or search warrant to access your financial records. Before authorized searches can take place, investigators must notify the account holder of the search and wait 10 days for a response, or 14 days if the notification was mailed.

In 2002, the act was expanded to include a variety of institutions, some of which might not typically be categorized as financial. These include:

  • Depository institutions like banks, thrifts, and credit unions
  • Money services businesses
  • Money-order issuers
  • Travelers’ check issuers
  • The U.S. Postal Service
  • Securities and futures brokerages
  • Commodity trading advisors
  • Casinos and card clubs

The Credit Practices Rule

In 1985, the Federal Reserve Board adopted the Credit Practices Rule to protect the rights of consumers in debt. Contracts for consumer credit made with creditors such as car dealers, department stores, and financing companies are covered.

The lender must also inform any cosigners of the credit arrangement of what taking on the debt entails. Before a loan or credit line can be issued, a notification must be provided in a separate document. Among other things, it might state that the bank can attempt to collect a debt from the cosigner before going after the borrower, and it may spell out all the obligations of the cosigner.

Other Consumer Protections

These are just a few of the provisions relating to consumer financial rights. To learn more about your credit and consumer rights, read about the Federal Trade Commission, or visit their website.

If you are experiencing financial hardship, Briteside Solutions offers a holistic and comprehensive approach to help people assert their legal rights with an emphasis on ongoing personalized education. Contact us today to learn more.