What are your credit card rights as an individual? You do have certain rights as an American citizen and as an honest person who is attempting to pay off your debt. The only circumstance which you would have to worry about is if you are blatantly ignoring your financial responsibilities and skipping payments.
However, most legitimate banks and credit card companies make the minimum monthly payment small, about 2% of the total balance. Otherwise, you do have guaranteed protection against fraudulent activity and against predatory lending. Let’s first consider your rights regarding fraudulent activity.
You are only obligated to pay for the credit that you spend. If any mistakes occur on your credit card bill, such as a double charged item, a mysterious charge, an unauthorized withdraw or any other unexplained action then you have the right to an investigation and the right to clear your name and credit score of harmful allegations.
One consumer based law website states that if you officially send a letter to your credit card company denying the unauthorized activity they are required to investigate the account. The same can be said of the credit bureaus.
Furthermore, while fraudulent activity is under investigation, the company cannot harm a person’s credit nor can they file a collections lawsuit until the matter is settled.
Your Means of Protection
There are three primary means of protection that you get. They are against: unauthorized used of your credit card (which can be stealing credit or an instance in which a merchant or another party charges the credit without consent), billing errors, and the right to stop payment. Upon analyzing the first means of protection, you will discover that in most circumstances you have a liability of $50. That means that if someone uses your card without permission, the company/bank can charge you up to $50. However, if you immediately notify the bank that your card might be charged without your consent, then you cannot be charged over the liability rate.
Remember, you have the right to report unauthorized use of your credit card (or the possibility of it) over the phone, not just through a formally written letter. You are not actually required to report the situation within 60 days, although the sooner you report the problem the better for your dispute case it will be. When analyzing the evidence, the credit card company will pay close attention to the signature made by the buyer and compare it to your authorized signature. Other “strong” evidence might include a police report or comparing the geographic location of the merchant with the owner’s home.
Charge-backs and Customer Satisfaction
When it comes to reporting a billing error, it is true that you must report such an error within 60 days. (As opposed to putting a stop on your stolen credit card) This type of dispute can be over a double billed item, an erroneous charge, an over-charge or a charge for an item you never received. You could even dispute a product’s quality on the basis of it being defective or falsely advertised. There is even a clause regarding cancellation of a debt in particular circumstances involving as contract. According to the Fair Credit Billing Act the creditor is required by law to follow a process of investigation if the cardholder issues a dispute statement in writing. However, you cannot raise a dispute because of the quality of a product or service, at least not through this channel.
If you want to dispute your charge based on dissatisfaction, then you need to look into the right to stop payment. This is your only option when it comes to being unhappy with a product. You do have to have a “legitimate complaint” and must first go to the merchant directly. The good news is that most legitimate merchants will give you your money back if you are unsatisfied with the product and have not damaged it. They will also return your money if the product is defective. They do this not only to improve goodwill and customer relations, but also to avoid charge-backs by the credit card company, which cost them more money in the long run. If the creditor refuses to cooperate you can contact the credit bureaus and explain the same situation.
What You Can Do to Stop Harassment
If you cannot resolve a dispute with the credit card company then you can take the issue up with the Federal Office of the Comptroller of Currency (CC) or with each credit bureau individually. (Even if you cannot remove a negative mark from your credit report you do have the right to include a statement explaining your side of the story.
What about your rights in dealing with predatory lenders or collections agencies? Most credit card companies, despite having absurdly high interest rates, are not actually doing anything illegal, so filing a lawsuit against them would prove difficult. It would be easier to sue a privately owned mortgage company or bank for predatory lending practices than a national credit card company. Even under these more favorable circumstances however, it would still be an expensive undertaking and a long process.
In her book, Help! I Can’t Pay My Bills: Surviving a Financial Crisis, CPA Sally Herigstad states that if you believe your credit is being marred without cause you do have the right talk to a lawyer and find out if he or she will take the case “on spec.” She also provides some advice in dealing with collections agencies or excessively rude creditors. Consumers have the right to stop harassment. You can order the bank to stop harassing you by phone and letter by writing a “cease and desist” letter of your own. If you legitimately owe them money, you may have to deal with a lawsuit or a negative mark on your credit. However, if their claim is without basis then you have nothing to fear.
If you feel that a company is being predatory in its attempts to get money from you, then start compiling evidence for a lawsuit. Keep a diary of calls so that you can establish a “willful pattern of violation.” Save a record of their slanderous credit reporting information. If you are a victim of unwarranted harassment from a company on your credit report you could be entitled to compensation of $1,000 per violation.
If you are honestly paying off your debt then you always have rights to fair treatment, regardless of the balance you owe. MSNBC provides a step by step process of how to go about salvaging your credit in these situations. If you feel that you are being treated unfairly, go and discuss the matter with the creditor in question or write to the credit bureaus. If you feel you know your rights and are ready to use a card responsibly then use the credit card “Chaser” on this website to track down the right lender and card. Get started comparing the best credit cards now!
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