As a consumer facing debt collection proceedings, an individual with a large amount of debt may be unsure of what to do and what his or her rights may be. However, many laws, in addition to the Fair Debt Collections Practices Act, exist to protect the rights of consumers in these exact situations.
These laws are explored in more detail below. We have asked attorney, Alaina Sullivan, and here is what she had to say:
Consumer Credit Protection Act (CCPA)
The Consumer Credit Protection Act (CCPA) was written in 1968 with the purpose of ensuring fair and honest credit practices. The CCPA lays out guidelines and rules to protect consumers and ensure that creditors are abiding by the letter of the law when collecting on consumer debts.
Several smaller acts are included within CCPA, including the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Fair Debt Collection Practices Act and the Electronic Fund Transfer Act.
One of the main laws within the CCPA involves regulations regarding the garnishment of wages and the ability an employer may have to fire an employee who is subject to wage garnishment.
Under Title III, an employer is restricted as to how much an employee may have garnished from his or her paycheck. This limitation is up to 25 percent of the debtor’s disposable weekly earnings.
Disposable earnings is what is left after mandatory deductions are taken out for taxes or the amount by which the disposable earnings are greater than what would be 30 times the minimum wage.
Under Title III, an employee cannot be fired because of his or her earnings being subject to garnishment for one debt. However, he or she can be subject to termination if two or more debts become subject to garnishment.
One major exception to wage garnishment is child support, as well as state and federal tax payments or bankruptcy judgments. These types of judgments can allow for a higher percentage of the wage earner’s income to be garnished.
Every state has its own set guidelines for how much can be garnished and it is important the debtor research what is allowed in his or her given state.
Fair Credit Reporting Act
In 1970, the Fair Credit Reporting Act (FCRA) was enacted to regulate how private businesses use an individual’s personal information. The FCRA makes sure that consumer reporting agencies abide by certain standards.
It also gives consumers the right to a free annual credit report and allows individuals the right to fix inaccuracies found in their credit reports in a prompt manner and to seek damages for any violations found.
Within the FCRA are three smaller acts, including the Credit CARD Act, the Dodd-Frank Act and the Fair and Accurate Credit Transactions Act, all of which deal with credit card company accountability and protect the rights of consumers when their identities are stolen.
Truth in Lending Act
The Truth in Lending Act (TILA) was created to protect consumers from unfair billing practices, as well as deceptive advertising techniques used by banks and credit card companies. TILA requires lenders to provide complete loan cost information to consumers when shopping for loans, so that these individuals have the most accurate information available to them.
In 2010, an amendment was added that granted rulemaking authority to the Consumer Financial Protection Bureau (CFPB). This authority allowed the CFPB to issue rules prohibiting mandatory arbitration clauses and waivers of consumer rights that were often hidden in agreements when consumers took on loan obligations.
One of the trademark provisions of TILA is the right of rescission. This right allows the consumer three days to reconsider a loan and back out before he or she loses money in the transaction.
Equal Credit Opportunity Act
The Equal Credit Opportunity Act (ECOA) was created in 1976 to protect debtors who were being discriminated by creditors due to their religion, sex, race, marital status, national origin, age or the fact that they received public assistance.
None of these factors are allowed, under the ECOA, to be considered when determining credit and whether a loan obligation will be given. This act is enforced by the Federal Trade Commission (FTC).
Electronic Fund Transfer Act
The Electronic Fund Transfer Act (EFTA) was created in 1978 and was created to protect consumers when they transferred funds electronically, either through an ATM, by paying a bill online or over the telephone, or by swiping a card at a point-of-sale terminal.
The EFTA deals with these transactions that immediately withdraw funds from the consumer’s account. The act is meant to protect the consumer from fraud and limits the consumer’s liability in the event his or her card is stolen.
The provisions of the act require companies to disclose information regarding fees and liability regulations when cards are initially distributed and also protects the consumer’s right to choose a form of payment other than an EFT.
Contact an Attorney Today
If you find yourself dealing in the middle of stressful debt collection proceedings and you have questions about what your rights are, it may be time for you to talk with an attorney about your situation and what you can do to stop the harassment as soon as possible.
An attorney can listen to the facts of the case and can best advise you on how to proceed. Contact an attorney experienced in fair debt collections proceedings to schedule a consultation today.