Chapter 16.3

1. Chapter 16.3 Protecting Your Credit

2. What can you do to correct billing errors? • In your lifetime you will probably receive a bill for something you did not pay for, or you will make a payment and it will not be credited to your account. • Steps to follow to correct errors: • Notify your creditor in writing • Include information that will support your case • Pay the portion of your bill that is not in question • The creditor must notify you within 30 days. • If the creditor made a mistake, you do not have to pay finance charges on the disputed amount.

3. Protecting Your Credit Rating • Your credit rating cannot legally be damaged while you are negotiating. • Your complaint must also be answered before a creditor can collect the amount in question

4. How can someone steal your identity? • People who deceive others by assuming different identities, use your name, SSN, credit card number, or other personal information for their owner purposes are called impostors. • When this occurs, the impostors are committing identity theft. • Identity theft is the fastest growing financial crime. • The Federal Trade Commission recommends you: • Contact the credit bureaus • Contact the creditors • File a police report

5. What should you do if your credit has been stolen? • To protect your card, you should take the following actions: • Be sure that your card is returned to you after you make a purchase. • Keep a record of your credit card numbers. • You should keep this record separate from your cards. • The maximum you have to pay if your card is used illegally is $50. • If notified before the card is used, you will not have to pay

6. Keeping Track of Your Credit • You may not realize you have been a victim of identity theft until you realize something is wrong Steps to Protect Other Accounts: • If your ATM or credit card has been lost, cancel the card. • Create new PINs • If your bank account has been accessed, close that account. • Government Agency Protection: • Contact the Federal Trade Commission (FTC) if you are still experiencing problems. • Provides information on how to network with other victims.

7. Keeping Track of Your Credit Credit Information on the Internet: • Use a secure browser (https not http when giving personal information) • Keep records of online transactions • Review your monthly bank and credit card statements • Read the privacy and security policies of Web sites you visit • Keep your personal information private • Never give your password to anyone online • Do not download files sent to you by strangers

8. Why would someone ask a friend or relative or cosign a loan? • Cosigning a loan means that you agree to be responsible for the loan payments if the other person fails to make them. • The lender would not require a cosigner if the borrower were considered a good risk. • If you cosign a loan and the borrower does not pay, you will have to pay up to the full amount of the debt as well as any late fees. • Can damage your credit score if the debt is not repaid

9. Why would someone ask a friend or relative or cosign a loan? If you decide to cosign a loan, consider the following: • Be sure you can afford to pay the loan. • Consider that even if you are not asked to repay the debt, your liability for this loan may keep you from getting other credit. • Before you pledge property to secure the loan, understand that you could lose the property you pledge if the borrower defaults. • Check your state law. Some states have laws giving you additional rights as a cosigner. • Requires that a copy of overdue-payment notices be sent to you so that you can take action to protect your credit history.

10. When should you complain about a lender? Consumer Protection Laws • There are six laws that protect consumer credit: • Credit Card Act • Truth in Lending and Consumer Leasing Acts • Equal Credit Opportunity Act (ECOA) • Fair Credit Opportunity Act • Fair Credit Reporting Act • Consumer Credit Reporting Reform Act

11. Credit Card Act • Passed in 2009 • Prevents unfair increases in interest rates and changes in terms. • Prohibits excessive and unnecessary fees. • Penalty fees must be reasonable and proportional to the violation. • Requires fairness in timing of card payments. • Provides enhanced disclosures of card terms and conditions. • Ensures adequate safeguards for young people. • Under the age of 21 you must have a cosigner

12. Truth in Lending and Consumer Leasing Acts • If a creditor fails to disclose information or gives inaccurate information, you can sue for any money loss you suffer. • Permits class-action lawsuits.

13. Equal Credit Opportunity Act (ECOA) • If you can prove that you have been discriminated against, you can sue for actual damages plus punitive damages • A payment used to punish the creditor who has violated the law - $10,000

14. Fair Credit Opportunity Act • A creditor that fails to follow the rules that apply to correcting any billing errors will automatically give up the amount owed on the item in question.

15. Fair Credit Reporting Act • You may sue any credit bureau or creditor that violates the rules regarding access to your credit records. • Or fails to correct errors in your credit file

16. Consumer Credit Reporting Reform Act • Passed in 1997 • Places the burden of proof for accurate credit information on the credit bureau. • The creditor must prove that disputed information is accurate. • If a creditor or the credit bureau verifies incorrect data, you can sue for damages.