If you have a consumer problem with a credit card company or a collection agency or a mortgage company and you prefer not to pursue Bankruptcy and you believe that your credit is being damaged, you may contact your local Lawyer Referral Service for a referral to a qualified lawyer or agency that may be able to help.
In addition to local laws protecting consumers in each State, the following are just a few Federal which protect consumers.
FAIR DEBT COLLECTIONS PRACTICES ACT (FDCPA)
The FDCPA regulates the behavior of debt collectors and provides civil relief for debtors who have been a victim of abusive practices. The congressional purpose of the Act was to prevent abusive, deceptive and unfair debt collection practices employed by debt collectors against “consumers,” or debtors. Specifically, the FDCPA prevents certain types of communications used by creditors to contact debtors.
It also prohibits conduct employed by creditors for the purpose of harassing, oppressing, or abusing any person in connection with a debt; or any methods used by creditors that are false or misleading, including but not limited to, the false representation of the amount or legal status of a debt. The relief provided to debtors under the Act is limited to actual damages and statutory damages not exceeding $1,000.00, but provides for reasonable attorney’s fees and costs upon a successful action.
REAL ESTATE SETTLEMENT AND PROCEDURES ACT (RESPA) § 2605
Section 2605 of the RESPA regulates the conduct of mortgage servicing companies, the entities hired by your lenders/creditors to manage your mortgage account. This portion of the Act applies only to home loans secured by a borrower’s primary residence. Among other mandatory disclosures, this section of the Act requires your servicing company to send you written notice of a sale or transfer of the servicing rights to your loan to another servicer. It further mandates that the servicing company must respond to borrower requests for documents and information within a specified period. As a borrower, you have a right to information about your mortgage loan, which is likely the biggest investment that you will ever make.
For violations under Section 2605 of the Act, mortgage servicers may be held liable for actual damages to borrowers and statutory damages not exceeding $1,000.00 for each violation in the case of a pattern of violations. Additionally, Section 2605 explicitly prohibits certain conduct by servicers, including but not limited to: failing to respond within 10 days of a borrower request seeking the identity of the owner of the loan; and charging the borrower for hazard insurance when the borrower already has a policy in place. There are other requests that require the lender or servicer to respond within different time periods.
FAIR CREDIT REPORTING ACT (FCRA)
The FCRA regulates the conduct of “consumer reporting agencies,” which are companies that handle consumer credit information for the purpose of furnishing credit reports to third parties, namely credit bureaus. The Act places duties on these agencies to: disclose your credit file to you upon request, limit access to your confidential information, gain your consent before disclosing information to an employer or potential employer, investigate disputed information and make appropriate corrections, delete negative information that is more than 7 years old (10 years for bankruptcy), remove your name from marketing lists upon request, provide you with your credit score upon request, and other duties to protect consumers. Additionally, the Act provides certain protections to consumers in cases of identity theft.
The civil relief provided under the Act allows for actual and statutory damages. It also provides for reasonable attorney’s fees and costs upon a successful action. In cases of “willful non-compliance,” the Act allows for punitive damages as the court may allow.