Law and the Consumer
What are my credit rights?
Buying on credit allows you to make purchases now and pay for them over an extended period of time. While credit buying can be a major convenience, consumers should recognize both the cost and the legal responsibilities attached to credit.
Here is some helpful information:
Under the federal Equal Credit Opportunity Act, creditors may not use your age (so long as you have capacity to contract), race, color, sex, marital status, religion, national origin, or receipt of public assistance to discourage or prevent you from applying for a loan, to refuse you a loan if you otherwise qualify, or to lend you money on terms different from those granted to another person under the same circumstances or the fact that you have exercised any rights under the Consumer Credit Protection Act or state law.
A creditor may not require a consumer who applies for credit to get his/her spouse's signature on any credit instrument except in certain very limited cases. A creditor also may not require information about your spouse's income, or otherwise discriminate against you. A creditor who violates this requirement may have to pay damages to both spouses. Further, a guarantee obtained in this manner is unenforceable by a creditor.
If you are denied credit, the creditor must send you a notice in writing which sets forth specific reasons for the denial of credit, or tells you how to request an explanation.
You may review your credit file maintained by a credit reporting agency at any time and challenge any false, incomplete, or obsolete data. Even if you are unable to provide that the information is false, you may file a brief statement which the credit bureau is required to include in your report.
There are specific procedures to correct billing errors without damage to your credit rating.
When you are seeking a loan or applying for a credit card, be sure you check to see what the annual percentage rate or interest will be.
What protection is there against a fradulent seller in a credit card transaction?
The Truth-in-Lending Act permits a credit card holder to avoid paying for fraudulent charges in certain situations. To obtain this protection, a cardholder must save the relevant billing statements and must notify the card issuer within 60 days after receiving the billing statement.
What can be done about defective products, fradulent advertising or unfair sales practice?
There are laws on both the state and federal level to protect consumers from unsafe products, deceptive business practices, and misleading ads. Generally, a business is required to be honest and accurate in advertising its products, and services and in attempting to persuade you to purchase the products or services. The Federal Trade Commission regulates business practice and is the agency which should be contacted in case of complaints. Complaints also may be directed to the Consumer Protection Bureau of the Pennsylvania Department of Justice.
If you are injured in any way by a defective product, you also may have private remedies against the manufacturer or against others involved in making the product available. Talk to a lawyer if you believe you have a products liability claim.
Can I get out of a contract?
In some cases, yes. Certain types of consumer sales contracts must have provisions allowing you to cancel within a specified period of time. Many door-to-door sales, for example, may be cancelled within three days, depending on the amount and type of sale. If a contract is not legally executed, it may be possible to have it invalidated. Some circumstances that may lead to the cancellation of a contract include fraud, misrepresentation, or coercion.
Simply changing your mind or deciding you cannot afford that for which you contracted however, is generally not a sufficient reason to release you from a contract. If you break a valid contract, the other party may be able to sue you and be awarded damages.
What is a contract?
A contract is a legally binding agreement in which property, goods or services are provided in exchange for something of value, such as money. Some common types of contracts into which an individual might enter include:
A purchase agreement for a home
A sales contract or "installment purchase plan" for an automobile, appliance, or other major purchase, including
Door-to-door sales agreements
An authorization to perform home repairs or services
A mortgage or personal loan
An employment contract
Contracts are not always written agreements. A verbal agreement may be an enforceable contract. A simple promise, however, is not usually a contract. Many of our day-to-day transactions actually involve a contractual relationship. Certain contracts may be required to be in writing. For example, contracts for the sale of real estate are usually required to be in writing.
Contracts are usually legally binding. Be sure you understand exactly to what you are agreeing. If you have questions, see your lawyer before you sign. If you agree to something which is not in your interest, an attorney may not be able to undo the damage.