Sometimes it seems like the cards are stacked against you—literally. Your credit card company has increased your interest rate, and now it has sent your contact information to a collection agency. You have told the company several times that you did not make the purchase in question, but to no avail: your name is on the card, and you have to pay the bill.

Four Laws That Prevent Credit Card Companies from Taking Advantage of Their Customers

Before you bend to the credit card company’s demands, you should know that there are federal laws that protect consumers from unfair billing practices. In fact, there are laws to protect consumers at every stage of the credit lending process, including:

  • Applying for credit. There are rules that protect consumers from discrimination even before they apply for a credit card. Under the Equal Credit Opportunity Act (ECOA), credit card companies are prohibited from discriminating against any applicant based on his or her gender, race, color, religion, marital status, nationality, age, or whether or not he or she receives government assistance.
  • Accepting an offer. If you have ever received a stack of paperwork before accepting a loan, it is likely due to the Truth in Lending Act. This law prevents creditors from unfair lending practices by requiring that they disclose all the terms and conditions of a loan or line of credit in plain language and in writing. Any offer of credit—even promotional offers or marketing materials—must be accompanied by a form outlining the interest rate (or rates, if the terms are dependent on credit) and other conditions of accepting the offer.
  • Disputing charges. One of the most common reasons people use credit cards for major purchases is due to the protections of the Fair Credit Billing Act. This law protects you against fraudulent or inaccurate charges that are billed to your account. As long as you report the charges in a timely manner, you will only be responsible for paying a maximum of $50 for any unauthorized charges made on your account. This applies to any double-billing on behalf of a lender or third party, charges that you never agreed to, and even charges for merchandise you ordered but did not receive.
  • Incurring fees and interest. One of the biggest reported issues with lines of credit is hidden fees and unfair charges. In order to minimize consumer abuse, regulators passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act in 2009. While the act prevents a number of unfair charging practices, it notably prevents a lender from raising the interest rate on an existing balance, giving a cardholder the right to “opt out” of credit card rate increase, prevents compound interest on portions of debt that are paid on time, and ensures that consumers are given at least 45 days notice of rate increases, additional fees and added finance charges.

Is Your Credit Card Company Breaking the Law?

While credit card companies are required to follow these regulations, some may attempt to subvert the rules in order to take advantage of consumers who do not know their rights. If you have been sent a bill for a disputed charge or have been ordered to pay more than you owe, you should speak with an experienced consumer law attorney as soon as possible. With our help, you can get your debt resolved and hold the creditor responsible for unfair debt collection practices.

Michael F. Cardoza, Esq.
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U.S. Marine & Consumer Financial Protection Attorney helping victims of ID theft and Credit Reporting errors.