Your Consumer Rights

When you hear the word “rights,” you usually think about the United States Constitution, and about the right to free speech or the right to a fair trial. But you have other rights too — even when you buy things or take out loans to buy things. These “consumer rights” aren’t in the Constitution, but they’re still state and federal laws – and they protect you and your money. Yet few people have ever heard of them.

Imagine if you have a headache, and you’ve grown up never hearing about of aspirin. Then someone told you about this miracle drug that makes you feel better quickly. You’d be VERY happy — and maybe a little mad that no one told you about this sooner. Well, your consumer rights are a lot like aspirin. These rights can relieve the headaches that come with many financial decisions you’re confronted with every day.

March 15 is World Consumer Rights Day. What’s that? Just the most important holiday you’ve never heard of. It’s been around since 1983, but the date is tied to March 15, 1962, when President John F. Kennedy addressed Congress specifically about consumer rights, which was a first. Now it’s intended to be a day of awareness for the rights we each possess when we buy things. There are eight basic rights. Let’s review them quickly…

You have a right to satisfy your basic needs. What’s a basic need? Think food, water, clothing, shelter, education, health care, and sanitation. So number one, you have a right to these commodities at a reasonable price and with good quality.

You also have the right, embodied in many laws, not to get cheated or ripped off. Those are actual crimes. The right to redress means that, as a result of being promised a product or service, it needs to be delivered to you, and it can’t be woefully substandard. “Redress” is just a short way of saying you have the ability to be heard and get satisfaction.

This might sound weird, but you have the right to be smart. What I mean by that is, you have the right to make informed and justified choices. Bt to do that means you need to know what’s going on with those goods and services. This is also known as “consumer awareness.” Basically, you have the right to access unbiased information that will help you make a good purchase.

This right ensures you can live and work in an environment that’s healthy and non-threatening. It’s the most forward-looking right, because it helps not only you but future generations. It’s supposed to minimize the environmental impact as children grow into adults — and become consumers of their own.

This right is so important, the federal government created an entire agency to deal with it. The Consumer Product Safety Commission Consumers protects you against goods and services that are hazardous to your health and your life. The CPSC sets safety and performance standards for goods and services, then requires them to be tested — and if necessary, have warning labels.

What’s the difference between the right of education and the right to information? Well, this one specifically protects you against dishonest or misleading advertising and labeling. It also gives you the right to be informed about the quality, quantity, potency, and pricing of goods or services. That protects you against what’s known as unfair trade practices.

This is the easiest right to understand, because it’s all in the name. Bottom line, you have a right to decide from an array of goods and services. This isn’t a communist country where only one kind of cheese is on sale. This is a right that became much easier with Internet deliveries. These days, it seems we have too much choice! But that wasn’t always the case in pre-Internet days.

This right is often confused with the right to redress. What’s the difference? Here, you have the right to express your feelings about making government policies and to complain publicly about a product or service. While it applies to the government, most large companies instituted their own processes long ago. Think about return policies, for example.

All told, these rights, if properly enforced, give you a lot of clout you probably didn’t know you had.

The rights we just mentioned wouldn’t be worth much if the law didn’t back them up in some way. Thankfully, this country has a myriad of rules to protect consumers. But three of them stand out, and if you know about them, you can protect yourself from a lot of financial pain. Let’s quickly review those now.

The Fair Credit Reporting Act is a wonderful federal law that has everything to do with your credit report. These days, many Americans are aware of the importance of these reports, which determine your credit score — which, in turn, determines what the interest rate on your loans will be, or even if you get that loan. The FCRA offers several key protections.

Thanks to the FCRA, you can access your credit reports for free once a year. Just go to annualcreditreport.com. If you find a mistake on your credit report, the credit bureaus — Equifax, Experian, and TransUnion — are required by law to promptly investigate your claim. And if you’re right, they’re obligated to fix those mistakes. The FCRA offers even more protections — like the right to remove outdated negative information — but these are the big ones that benefit most Americans.

This law is aimed right at debt collectors. If you’ve ever been hounded by a debt collector, you know what they can be like. The FDCPA bans debt collectors from using abusive or deceptive tactics to get you to pay off a debt like a mortgage, auto loan, medical bill, or credit card balance. Let’s look at the specifics.

Before this law passed Congress in 1978, debt collectors could call you late at night and bug you at work. No longer. Other provisions in the FDCPA say debt collectors can’t threaten you with arrest for not paying your debt, and if they violate any of these rules, you can file a complaint against them with the Federal Trade Commission and Attorney General’s office. You can actually sue the debt collector in small claims court — and then the debt collector has to pay you!

If a debt collector is harassing you in violation of the FDCPA, your first step is to tell them you know about the law and will file a complaint if they don’t stop. Most times, that’s enough. Once they know you know, they ease up. But if they don’t stop, you can file a complaint online with the Federal Trade Commission. Jut go to ftc complaint assistant dot com and follow the prompts.

This is the newest law on our short list. It passed in 2009 and regulates credit card companies in much the same way the FDCPA regulates debt collectors. It stops any abusive or deceptive practices by the folks that issue you credit cards, and it’s made quite a difference in just over a decade. Let’s take a look.

Before the Credit CARD Act, some unscrupulous credit card companies would send you your statement with only a few days before the bill was due. You’d miss the deadline, and they’d hit you with late fees. Or they’d offer you a really low interest rate to get you to sign up, and then hike that rate a week later. Even worse, they’d load their cards with outrageous fees that would be buried in tiny little legal text. Now they can’t do any of that. They must give you at least 21 days to pay your bill and45 days’ notice of an interest rate hike. They also have to explain their fees in plain English, not legal speak.

We just reviewed three major consumer protection laws, but there are so many more. We could spend a couple hours going over them all, so we’ll just mention a couple real quick. First, there’s the Telephone Consumer Protection Act, or TCPA. You’ve heard of the do-not-call list? This is the law that made that possible. Of course, spam calls are still a huge problem, so expect more legislation down the road to deal with that. The law always lags behind the problems, especially when the problem is tech-heavy.

When you consider a mortgage or auto loan, it can get confusing. But before the Truth in Lending Act, it was even more perplexing. TILA requires lenders to give you clear, concise information on just what you’ll pay over the lifetime of the loan. And it must be standardized, so you can easily compare offers between lenders.

Credit repair has become a hot topic in the past few years, and the Credit Repair Organizations Act bans the businesses that help you rebuild your credit from charging you up front, and they must give you three days to cancel the contract in case you change your mind.

Finally, let’s talk about a law that created an entire agency to focus on consumer rights. You might have heard about the CFPB over the years, and it hasn’t been without controversy. It was first proposed by Elizabeth Warren, and President Obama appointed her to set up this new agency. Republicans objected to this expansion of government, and the CFPB has been caught up in partisanship ever since. But we’re not here to talk about politics. So let’s take a look at what the CFPB does.

If you go to the CFPB’s website at consumer finance dot com, you’ll see it does several things. One of those is research, which the government, nonprofits, and companies can use to better help consumers. Some of that is general, like how many Americans are financially literate, and what are the best ways to teach them that. Some is very specific, like how student loan borrowers are doing on something called “income-driven repayment programs.” The idea is quite simple: You can’t pass effective consumer protection rules unless you understand how consumers are doing.

The CFPB has two powerful tools at its disposal, and the Consumer Complaint Database is one of them. What is it? Imagine Yelp on steroids. You can file a complaint about mortgages, bank accounts, student loans, auto loans, and credit reporting. Then the CFPB asks the company you complained about to respond. Because it’s a federal agency, the CFPB claims 97 percent of complaints get timely responses from companies. Even better, you can review the CFPB’s complaint database and check out what’s there before you do business with lenders. There are tens of thousands to peruse.

The CFPB doesn’t just collect complaints. It collects money.  The CFPB says one in five Americans over the age of 65 has fallen victim to a financial scam. So in response to illegal actions, the CFPB has generated $12.4 billion in relief for more than 31 million consumers. If you’ve been ripped off, the CFPB might be able to help.

Not only are there laws and agencies to protect you, nonprofits like Consolidated Credit can help you, too. We offer free debt analyses and housing counseling at no charge. Our certified credit counselors know the laws we’ve just reviewed and many more. The bottom line is this: You’re not alone.

So thank you very much. I hope you now realize you never need to feel defeated when someone tries to bully you out of your money.