The concept of consumer rights began in 1962 when President John F. Kennedy outlined the Consumer Bill of Rights, according to "Guide to Personal Finance: A Lifetime Program of Money Management." A few years later after the Federal Trade Commission (FTC) held highly-publicized hearings on consumer protection in 1968, the U.S. Congress began considering laws to protect consumers, including laws that gave them rights with credit card companies. The Truth in Lending Act in 1969 was the first law that regulated credit card companies. Today, consumers have many rights.
Early History
The Truth in Lending law required credit card companies to explain to consumers the cost of credit. "The Guide To Personal Finance" reported that this new consumer right enabled consumers to compare credit card companies' charges for the first time. The law required credit card companies to explain the finance charge they imposed on consumers whenever they sent a bill and the interest rate they charged annually. "The finance charge and the annual percent rate must be displayed prominently on the forms and statements used by a creditor," the law states.
Fairness
The Fair Credit Reporting Act dramatically expanded consumer rights in 1971. Prior to this law, credit card companies could deny credit to consumers without explanation. The law gave consumers who were denied credit, employment or insurance the right to a free credit bureau report within 30 days of their rejection. The law also gave consumers the right to find out what credit card companies received a report on them and the details of all investigative consumer reports on them.
Bias Eliminated
The Equal Credit Opportunity Act, which became law in 1974, prohibits credit card companies from denying consumers credit because of their gender, race, marital status, religion or national origin. The act also says older people cannot be discriminated against and young adulthood cannot be a factor "except in certain carefully prescribed circumstances," reports "The Money Book." The law also requires that credit card companies disclose why they denied a consumer credit. The Federal Reserve Board lists the legal reasons that credit can be denied.
Resolving Disputes
Consumers received the right to not pay a credit card bill when the Fair Credit Billing Act became law in 1975. This right goes into effect when consumers are dissatisfied with the product, they tried to resolve the dispute with the merchant and the charge is more than $50. "You may withhold payment for the item in question until the matter is resolved, but you must pay the rest of your credit card bill on schedule," "The Consumer Reports Money Book" says.
Recent Changes
The Fair Credit Reporting Act was amended in 1996 and 2003. The changes include requiring credit card companies to correct inaccurate information in credit bureau reports and providing consumers with the name, address and phone number of the credit bureau that provided the information that led to a rejection of credit.
References
- "Guide to Personal Finance: A Lifetime Program of Money Management;" Richard J. Stillman; 1975
- "The Consumer Reports Money Book;" The editors of "Consumer Reports;" 1997
- Equifax
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