How Credit Law Protects Consumers

Consumer credit laws were designed to provide protection in a variety of ways that affect consumers fair access to credit. This can refer to the consumer’s right to understand the credit and loan terms prior to agreeing to them, every consumer’s fair and equal access to credit, limitations on loan and credit interest and terms, and so on. Even a basic understanding of these important laws and Acts can help individuals understand their rights.

Understanding consumer credit rights is the first step to ensuring that you’re being treated fairly by creditors. These credit laws also provide consumers with avenues to have their concerns addressed. The Federal Trade Commission, for example, is charged with overseeing some of these consumer credit laws.

Outlined below are several laws of particular importance for consumers. In today’s economic climate, many consumers are particularly concerned with repairing bad credit reports and scores, and for this reason, the laws of particular importance to those individuals interested in credit repair efforts are placed in their own category.

Consumer Credit Laws

Laws of special importance to credit repair services and a general overview are provided below.

The Credit Repair Organizations Act was designed to ensure that those seeking credit repair services from credit repair organizations are provided with the information necessary to make an informed decision. It aims to ensure that consumers are protected from deceptive or unfair advertising and unscrupulous business practices.

Examples of unscrupulous practices include suggestions that a consumer change their identity or that a consumer lie about their past credit history to potential creditors.

Credit Repair Organizations that violate the law can be sued for damages and attorney’s fees. Violations of the Act can be reported to the Federal Trade Commission and/or your local state attorney general. A consumer has 5 years to take action against an organization once they have learned of a violation to the Act.

The Equal Credit Opportunity Act prohibits the denial of credit because of sex, marital status, race, religion, national origin, age or because a person receives public assistance. This law offers protections to consumers when they deal with any people or organizations who participates in the decision to grant credit or in setting the terms of that credit. This includes banks, credit unions, credit card companies, loan and finance companies, retail stores, and real estate brokers.

The law ensures that consumers have the right to know whether their applications for credit were accepted or rejected within 30 days of filing a complete application and to know the reasons why an application was rejected. It also protects the rights of consumers to know the reason(s) why they have been offered less favorable terms than requested, but only if that consumer rejects the less favorable terms being offered.

A number of federal agencies are charged with the enforcement of the Equal Credit Opportunity Act, including Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, to name a few. Where a consumer directs complaints depends on the complaint itself. A starting point for consumers is to visit the Federal Reserve website or call 1-888-851-1920.

The Fair Credit Reporting Act (FCRA) gives any individual the right to know what information is being distributed about them by any credit reporting agency. It regulates the collection, dissemination, and use of consumer credit information. The FCRA was passed in 1970, and along with the Fair Debt Collection Practices Act (FDCPA), it constitutes the core of credit law in the US.

Critical to the Fair Credit Reporting Act are the rules and responsibilities outlined that Credit Reporting Agencies must follow. Credit Reporting Agencies (CRAs) are the entities that collect and store credit information on every US consumer. The FCRA also provides regulations that those who provide the CRAs with information must follow. Examples of these information furnishers are creditors such as credit card companies, mortgage companies, and automobile financing companies. Other information furnishers include employers, bonders, and courts that enact judgments against individuals, such as bankruptcies.

The Fair Credit Reporting Act is enforced by the Federal Trade Commission. The FCRA is arguably the most powerful piece of legislation used by credit repair companies who seek to have out of date and/or incorrect information removed from a consumer’s credit report.

Notices of Rights and Duties under the FCRA (July 1, 1997) were published by the Federal Trade Commission as amendments for the Fair Credit Reporting Act. The Notices must be distributed by Credit Reporting Agencies and include a summary of consumer rights under the FCRA; a notice that sets forth the responsibilities under the FCRA of those who furnish consumer information to consumer reporting agencies; and a notice that outlines the obligations for any person who uses information covered by the FCRA.

These Notices were designed to enhance the Fair Credit Reporting Act in an effort to promote accuracy, fairness, and the privacy of information in the credit files created by all credit reporting agencies.

The Federal Trade Commission oversees the proper implementation of the FCRA and the Notices of Rights and Duties.

The Truth in Lending Act (TILA) is a US federal law that was enacted in 1968 and is contained in Title I of the Consumer Credit Protection Act. It’s intent is to protect consumers by requiring that any lender, prior to entering into a credit transaction, provide written disclosures of the costs of credit and the terms of repayment.

Excluding some high-cost mortgage loans, the TILA doesn’t regulate the charges that may be established for consumer credit. What the Act requires is standardized disclosure of costs and charges for credit. This protects consumers by helping them shop and compare the costs and terms of credit and make informed decisions about where and from whom they access credit.

Other benefits to consumers include the right to cancel particular credit transactions that involve a lien on a person’s primary dwelling and the regulation of credit card practices. It also includes mechanisms to protect a consumer’s timely resolution of credit billing disputes.

The Truth in Lending Act is enforced by the Federal Reserve System, the Federal Deposit Insurance Corporation, and several other agencies. Those creditors that are not under the jurisdiction of any specific enforcement agency answer to the Federal Trade Commission.

Other Consumer Credit Rules and Acts

The Consumer Leasing Act is a federal law that requires leasing companies to inform a consumer in writing about the details involved in a contract. It outlines requirements regarding the cost and terms of any leasing agreement, including a statement of the number of lease payments and their dollar value, penalties for reneging on timely lease repayment, and whether a lump sum payment is due at the end of the lease agreement.

This Act helps consumers understand the important details of any lease agreement so that they can shop for the best leasing terms. It also helps a consumer compare the cost of leasing with actual purchase costs. In addition, it regulates lease advertising by penalizing unscrupulous or unfair advertising practices.

The Act applies to leases including personal property leased by an individual for the period of more than four months for personal or household use, long term rentals of items such as cars and appliances, and other personal property.

The Consumer Leasing Act is enforced by the Federal Trade Commission.

The Fair Credit Billing Act (FCBA) is a US federal law that was set forth as an amendment to the Truth in Lending Act. The Act outlines guidelines and procedures for resolving billing errors that may appear on credit card and charge card accounts, and protects consumers from unfair billing practices.

The procedures outlined in the FCBA include the proper dispute process for consumers. Consumers may send via mail a written dispute of perceived billing errors to their creditor within sixty days of the statement date on the account statement. The creditor is obliged to acknowledge and investigate the dispute, and within 90 days, make the requested correction or inform the consumer in writing that no correction with be made the reasons why.

Examples of billing errors covered by the Act include: charges not made by the consumer; incorrect charge amounts; charges for goods not received by the consumer; charges for goods not delivered under specified terms; charges for damaged goods; failure to update account payments made; calculation errors; charges a consumer either requests proof of or wants clarified; and payments mailed to the wrong address.

Overall enforcement of the Fair Credit Billing Act is the responsibility of the Federal Trade Commission; however, enforcement for banks falls under the domain of the Federal Deposit Insurance Act.

The Fair Debt Collection Practices Act (FDCPA) sets out guidelines and procedures for collections companies that prevents debt collectors from using unfair or deceptive practices to collect overdue bills. Debt collectors regulated under this Act include collection agencies, lawyers who regularly collect debts, and companies that buy delinquent debts from others and endeavor to collect them.

The debts covered under the Act do not include debts incurred by businesses. They do include family, and household debts, such as money owed on credit card accounts, medical bills, auto loans, and mortgages.

The Federal Trade Commission (FTC) is charged with the enforcement of the Fair Debt Collection Practices Act.

The Home Ownership and Equity Protection Act (HOEPA) is an amendement to the Truth in Lending Act and was implemented by the Federal Reserve System in 1994. It was designed to protect consumers by restricting certain terms of high cost home loans in situations where the interest rate or fees are above specified levels.

This Act applies to the sub-prime mortgage market and home equity lending, and it has therefore been discussed at great length in recent times.

The Home Ownership and Equity Protection Act applies primarily to refinancing and home equity installment loans, provided that these loans meet certain criteria and fall under the definition of a high fee or high rate loan. The Act does not apply to reverse mortgages, loans to build or buy a home, or home equity lines of credit.

As with the Truth in Lending Act, enforcement of HOEPA falls under the jurisdiction of the Federal Trade Commission.

Credit law exists to protect consumers. The Fair Credit Reporting Act and the Credit Repair Organizations Act are of particular importance to those who provide credit repair services and those seeking to repair bad credit reports on their own. Understanding these laws and where and how they are applied and enforced is critical for any consumer interested in protecting their rights in any credit or leasing arrangement.

Understanding Wrongful Termination Law

There is no getting around the fact that Arizona employment laws are generally quite friendly to employers when it comes to a question of wrongful termination. Many Arizona employment lawyers frequently recount the truism that an employee may be filed for a good reason or for no reason whatsoever, as long as he isn’t fired for a bad reason.

The bad reasons are what keep plaintiffs’ attorneys in business. Although every case is different and recently terminated employees should consult with an employment attorney to discuss the specific circumstances of their case, unlawful reasons for terminating an employee include termination decisions based on the race, sex, religion or age of the employee.

Arizona also has a statute prohibiting termination as retaliation for reporting a violation of an Arizona statute. There are many other similar state and federal laws that preclude termination in retaliation for an employee’s lawful reporting of the employer’s actual or suspected violation of the relevant law. These retaliation statutes may create liability where the employer wasn’t even guilty of the underlying offense, so employers should be very careful about making a decision to terminate an employee who has complained of or reported any sort of discrimination, safety violation, or other legal issue. Arizona employers who believe they need to fire such an employee should consult with an Arizona employment lawyer first.

Employees who believe they have valid wrongful termination claims should seek the advice of an Arizona employment attorney as soon as possible, because the statutes of limitation pertaining to both state and federal law violations are relatively short, and the failure to file a complaint in Court or with the appropriate administrative agency is usually fatal to a wrongfully terminated employee’s claim.

An Arizona employment lawyer will also be able to help the terminated employee understand his or her obligations and rights. Among other things, terminated employees must mitigate their damages by seeking replacement employment. Where an employer is liable, the employee will normally be entitled to recover lost wages and other damages directly related to the termination.

South Carolina’s Whistleblower Protections – A Review for SC Attorneys, Lawyers & Law Firms

South Carolina whistleblowers who are employed by a South Carolina state government agency are protected from adverse employment actions when they timely report violations of state or federal laws or regulations or other wrongdoing. South Carolina attorneys, lawyers and law firms who represent SC state government whistleblowers should be aware of the protections afforded to these employees who are fired, demoted, suspended or otherwise subjected to an adverse action in reaction to a report of fraud or other wrongdoing by a public agency or one of its officers or employees. South Carolina whistleblower attorneys, lawyers and law firms should also be aware of the administrative requirements necessary to invoke the protections of the state’s anti-retaliation statute, as well as the relief provisions afforded to such SC whistleblowers. There are also some whistleblower protections for government and private employees who report violations of South Carolina’s occupational safety and health statutes, rules or regulations.

South Carolina’s Whistleblower Protection Act for State Government Employees

South Carolina’s General Assembly enacted legislation called the “Employment Protection for Reports of Violations of State or Federal Law or Regulation” (the “Act”) to protect South Carolina state employees from retaliation or disciplinary actions when they report violations of state or federal laws or regulations or other wrongdoing including fraud and abuse. See South Carolina Code § 8-27-10, et seq. The Act prohibits a South Carolina public body from decreasing the compensation of, or dismissing, suspending or demoting, a state employee based on the employee’s filing of a protected report of wrongdoing with an appropriate authority. S.C. Code § 8-27-20(A). The protected report must be made by the SC whistleblower in good faith and not be a mere technical violation. Id. The Act does not apply to private, non-government employers or employees. S.C. Code § 8-27-50.

A public body under the Act means one of the following South Carolina entities: (A) a department of the State; (B) a state board, commission, committee, agency, or authority; (C) a public or governmental body or political subdivision of the State, including counties, municipalities, school districts, or special purpose or public service districts; (D) an organization, corporation, or agency supported in whole or in part by public funds or expending public funds; or, (E) a quasi-governmental body of the State and its political subdivisions. S.C. Code § 8-27-10(1).

A South Carolina employee under the Act is an employee of any South Carolina public body entity, generally excluding those state executives whose appointment or employment is subject to Senate confirmation. S.C. Code § 8-27-10(2).

An appropriate authority under the Act means either (A) the public body that employs the whistleblower making the protected report, or (B) a federal, state, or local governmental body, agency, or organization having jurisdiction over criminal law enforcement, regulatory violations, professional conduct or ethics, or wrongdoing, including but not limited to, the South Carolina Law Enforcement Division (“SLED”), a County Solicitor’s Office, the State Ethics Commission, the State Auditor, the Legislative Audit Council (the “LAC”), and the Office of Attorney General (the “SCAG”). S.C. Code § 8-27-10(3). When a protected report is made to an entity other than the public body employing the whistleblower making the report, the Act requires that the employing public body be notified as soon as practicable by the entity that received the report. Id.

A SC whistleblower employee’s protected report under the Act is a written document alleging waste or wrongdoing which is made within sixty (60) days of the date the reporting employee first learns of the alleged wrongdoing, and which includes (a) the date of disclosure; (b) the name of the employee making the report; and, (c) the nature of the wrongdoing and the date or range of dates on which the wrongdoing allegedly occurred. S.C. Code § 8-27-10(4).

Pursuant to the Act, a reportable wrongdoing is any action by a public body which results in substantial abuse, misuse, destruction, or loss of substantial public funds or public resources, including allegations that a public employee has intentionally violated federal or state statutory law or regulations or other political subdivision ordinances or regulations or a code of ethics, S.C. Code § 8-27-10(5). A violation which is merely technical or of a de minimus nature is not a “wrongdoing” under the Act. Id.

Rewards for SC Whistleblowers

When a SC state employee blows the whistle on fraudulent or abusive acts or violations of federal, state or local laws, rules or regulations, and the protected report results in savings of public funds for the state of South Carolina, the whistleblower is entitled to a reward or bounty under the Act. However, the reward is extremely limited. The provisions of the Act provide that a SC whistleblower is entitled to the lesser of Two Thousand Dollars ($2,000) or twenty-five percent (25%) of the estimated money saved by the state in the first year of the whistleblowing employee’s report. The South Carolina State Budget and Control Board determines the amount of the monetary reward that is to be paid to the employee who is eligible for the reward as a result of filing a protected report. See S.C. Code § 8-27-20(B). This reward is very meager when compared to the bounty provisions of the federal False Claims Act, 31 U.S.C. §§ 3729-3732 (the “FCA”). The FCA allows a qui tam whistleblower or relator to receive up to 30% of the total amount of the government’s recovery against defendants who have made false and fraudulent claims for payment to the United States. Some recent federal FCA recoveries by the U.S. Department of Justice have exceeded $1 Billion Dollars.

However, the Act does not supersede the State Employee Suggestion Program, and if a whistleblower employee’s agency participates in the State Employee Suggestion Program, then items identified as involving “wrongdoing” must be referred as a suggestion to the program by the employee. A South Carolina government employee is entitled to only one reward either under the Act or under the State Employee Suggestion Program, at the employee’s option. Id.

Civil Remedies for SC Whistleblowers

If a South Carolina government employee suffers an adverse action related to employment within one (1) year after having timely filed a protected report which alleged wrongdoing, the employee may institute a non-jury civil action against the public body employer after exhausting all available grievance or other administrative remedies, and such grievance/administrative proceedings have resulted in a finding that the employee would not have been disciplined but for the reporting of alleged wrongdoing. S.C. Code § 8-27-30(A). The adverse action or retaliations can include is dismissal, suspension from employment, demotion, or a decrease in whistleblower’s compensation. The statutory remedies under the Act that the adversely effected employee may recover are (1) reinstatement to his or her former employment position; (2) lost wages; (3) actual damages not to exceed Fifteen Thousand Dollars ($15,000); and (4) reasonable attorney fees as determined by the court. Id. However, an award of attorney’s fees has a cap under the Act, and may not exceed Ten Thousand Dollars ($10,000) for any trial and Five Thousand Dollars ($5,000) for any appeal. Id.

At least one court has addressed the Act’s remedies with respect to a whistleblower employee. In Lawson v. South Carolina Department of Corrections, 340 S.C. 346, 532 S.E.2d 259 (2000), the S.C. Supreme Court held that when a whistleblower employee is limited to a recovery under the statutory remedies of the Act when the employee alleges a wrongful discharge only on the grounds of his whistleblowing. In Lawson, the court granted summary judgment against the employee because he could not point to a violation of any policy, ethics rule, or other regulation as a basis for his whistleblower action which amounted to “wrongdoing” under the Act. Id.

Adverse Actions Based Upon Causes Independent of a Protected Report

In the event the appropriate authority which received the report determines the whistleblower employee’s report is unfounded or a mere technical violation and is not made in good faith, the public body may take disciplinary action including termination and, notwithstanding the filing of a report, a public body may dismiss, suspend, demote, or decrease the compensation of an employee for causes independent of the filing of a protected report. Id. A South Carolina public body may also impose disciplinary sanctions against any direct line supervisory employees who retaliate against another employee for having filed a good faith report.

Statute of Limitations

Under the Act, a whistleblower’s civil action must be commenced within one (1) year after the accrual of the cause of action or exhaustion of all available grievance or other administrative and judicial remedies, or such a lawsuit is forever barred. S.C. Code § 8-27-30(B).

Occupational Safety and Health Act (“OSHA”) Whistleblower Protections

South Carolina has a separate whistleblower protection statute for employees who report violations of statutes, rules or regulations regarding occupational safety and health. S.C. Code § 41-15-510. The protected activities include filing a complaint, instituting a proceeding, or testifying about OSHA violations. Any employee who has been discharged or otherwise discriminated against by any person in violation of Section 41-15-510 has the right to file a complaint with the South Carolina Commission of Labor alleging such discrimination. The SC Labor Commissioner shall cause investigation to be made as he or she deems appropriate, and, if the Commissioner determines that anti-discrimination provisions of Section 41-15-510 have been violated, he must institute a law suit in the appropriate court of common pleas against such discriminating person or entity. In any such action, the court of common pleas has injunctive authority to restrain such OSHA anti-discrimination violations, as well as authority to order all appropriate relief including rehiring or reinstatement of employee to his or her former position with back pay. S.C. Code § 41-15-520. Unlike the Act, the OSHA whistleblower protections are available to state government and private employees.

Conclusion

South Carolina whistleblowers who are employed by a South Carolina state government agency are protected from adverse employment actions when they timely report violations of state or federal laws or regulations or other wrongdoing. South Carolina attorneys, lawyers and law firms who represent SC state government whistleblowers need to know the protections afforded to these employees who are fired, demoted, suspended or otherwise subjected to an adverse action in reaction to a report of fraud or other wrongdoing by a public agency or one of its officers or employees. South Carolina whistleblower attorneys, lawyers and law firms should review the administrative requirements necessary to invoke the protections of the state’s anti-retaliation statute, the statutes of limitations, as well as the remedial provisions afforded to such SC state government whistleblowers, in order to properly advise such clients. So too, the employment attorney should be aware of the rights and remedies of both private and South Carolina government employees who blow the whistle of violations of state OSHA statutes, rules or regulations.

© 2010 Joseph P. Griffith, Jr.