Do lenders have to disclose all the terms of the loan in the contract? Does a debt collector have the right to call at 10 p.m.? Are you liable to pay unauthorized charges on a stolen debit card?
When problems arise, it helps to know if the law is on your side -- and what, if anything, you can do about your situation.
Fret not. Organized by problem type, this primer on consumer protection laws will guide you through the legal rights that apply to certain situations.
| More from Bankrate.com: |
• 12 Free Credit-Monitoring Strategies
• The Right Time to Draw Social Security Benefits
• When Income Tumbles, Reduce Spending
Primer on consumer protection laws
Law: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, or BAPCPA, amends Truth in Lending Act
What it covers: Bankruptcy, debt counseling
What it does for consumers: The BACPA sets disclosure rules for repayment schedules and bankruptcy assistance services. Holds petition preparers, lawyers and debt relief agencies liable for fraud and negligence.
- Prohibits bankruptcy petition preparers from giving legal advice.
- Imposes heavy fines on bankruptcy petition preparers who violate the law or advise debtors to do something that breaks the law, such as supplying a bogus Social Security number on the petition.
- Bars debt relief agencies from misrepresenting or not following through on services offered to debtors.
- Requires debt relief agencies to give debtors notice of necessary documentation to file a bankruptcy petition. They must also include a separate statement titled, "IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER."
- Creditors must halt their collection efforts once a debtor files a petition for bankruptcy.
- Can enforce a 20 percent principal debt reduction on unsecured debts if the creditors refuse to negotiate a repayment plan with a credit counseling agency.
- Mandates that consumers who opt for repayment plans receive full disclosure of the repayment schedule and have some time to rethink the plan.
- Funds held in retirement plans and children's savings accounts are not considered as assets.
- Former spouses in bankruptcy can't discharge child support and alimony payments.
Consumers facing or considering bankruptcy should know that the law also makes filing for bankruptcy -- especially Chapter 7 -- more difficult and costly. For more information, read the Bankrate feature, "What is bankruptcy?"
To file a complaint about debtor education providers or credit counseling agencies, visit the U.S. Trustee Program's Web site.
Access the full text of the law here.
Law: Consumer Leasing Act of 1976 amends the Truth in Lending Act
What it covers: Auto leases and furniture rentals
What it does for consumers: When comparing long-term auto and furniture leases, this law makes sure the contract discloses important conditions and costs upfront. Leasing companies must abide by the rules.
- Covers personal property leases that exceed four months and contract for less than $25,000, regardless of any options for the consumer to buy the property at the end of the lease. Does not cover apartment leases.
- Regulates how leasing companies can advertise.
- Requires disclosure of total charges consumers will face at the beginning and end of a lease, as well as the monthly or periodic costs.
- Lease company must provide the consumer with a written disclosure of costs, including down payments, registration amounts or security deposits. The law also says they must spell out the terms and conditions of the contract, such as insurance requirements, the length of time the warranty remains in effect and damage covered under "wear and tear."
- Must provide a purchase-option statement, which explains whether the consumer will have the opportunity to purchase the property once the lease expires
For more information on consumer leasing, read the Bankrate feature, "Leasing laws you should know."
File a complaint about Consumer Leasing Act violations with the FTC.
Access the full text of the law here.
Electronic fund transfers
Law: Electronic Transfer Fund Act of 1978
What it covers: ATM, debit and credit card transactions, electronic payments
What it does for consumers: This law caps out-of-pocket expenses for consumers in cases where a thief charges up their debit, ATM or credit card, provided consumers meet time constraints. Consumers also have the right to dispute charges on their bank statement.