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What is the Equal Credit Opportunity Act?

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Consumers should look into the Fair Debt Collection Practices Act (FDCPA) if they feel that they are being subject to harassment or mistreatment by third party collection agencies. They may be able to collect compensation, usually called damages. Founded by an act on Congress in 1977, the FDCPA’s main goal is to protect consumers from unlawful and unethical collections practices. The FDCPA regulates that debt collectors may and may not conduct themselves in certain ways. Generally, the collection company must be honest, give written notice of a debt, respect privacy and follow the legal process.

The Equal Credit Opportunity Act, or ECOA, is an act that protects people from credit discrimination. It is enforced by the Federal Trade Commission. Any business who extends credit, such as banks, credit unions, credit card companies, etc. must follow the ECOA. All agencies that work in establishing credit terms are also required to follow ECOA. Generally, the ECOA cannot use gender, race, national origin, religion, marital status, age, or being on public assistance as factors in determining credit. Some situations may require some of this information, but the information cannot be used to determine a credit decision or the terms of the credit.

Under ECOA, there are some general stipulations. Among them are:

  • You cannot be asked about your spouse unless the spouse is also applying for the account or may also use the account.
  • You are entitled to have accounts in your legal name.
  • You are not required to use a cosigner if you qualify or use a cosigner of your choosing who qualifies.
  • Credit agencies must notify you of a credit decision within 30 days of applying.
  • If denied credit, credit agencies are required to inform you of the reason(s)
  • You are also entitled to be informed of any changes in the terms of the account and the reasons for the changes.

If you feel that a creditor is in violation of the ECOA, contact the FTC. It is important to know these terms in an effort to protect yourself and your rights.

A consumer can file a claim in several ways if he or she feels that the FDCPA was violated. A claim can be filed with state attorney general. Secondly, a claim can be filed with the FTC. Another option is to file in small claims court. The most recommended method, is to file in state court. The chances of being able to present all evidence is the greatest here. Also, the possible damages settlement is highest in state court. To contact an attorney, simply conduct an internet search of collection debt attorneys or contact your state’s bar association. For the most part, a consumer has one year from the incident date to file a claim. Many attorneys specialize in collection claims.

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