1. Chapter 9 Credit Problems and Laws

2. How Can Consumers Protect against Errors and Fraud?
Disputing a charge is the process of informing a credit company of an error on your bill.
Document all steps of your dispute and send a letter to the credit company.
Credit card fraud is when someone uses your credit account to steal money or goods.
Notify creditor as soon as possible.
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3. What Help Is Available to Consumers?
Better Business Bureau
Promotes responsible business practices in the marketplace to build trust between buyers and sellers
Consumer Action
Promotes consumer rights, publishes educational materials, and advocates for consumers in the media and before lawmakers
Consumer Federation of America
Works to advance pro-consumer policies on a variety of issues before state and federal legislatures, regulatory agencies, and the courts
Consumers Union
Provides advice about products and services in its publication Consumer Reports
National Consumers League
Sponsors the Fraud Center and addresses a wide range of issues in the marketplace
Public Citizen
Addresses issues such as the consumers’ right to seek redress; clean and safe energy sources; and strong health, safety, and environmental laws
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4. What Help Is Available to Consumers?
Federal agencies
Federal Trade Commission (FTC) Bureau of Consumer Protection
U.S. government (
Consumer Action Handbook
Consumer Financial Protection Bureau
Federal Bureau of Investigation (FBI)
State agencies
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5. What Problems Can Arise from Debt?
Credit delinquency
Collection agencies
Judgment
Garnishment
Repossession and foreclosure
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6. Focus On . . . Telemarketing Fraud
To protect yourself, know the danger signs.
Examples: upfront fees, pressure to act immediately, no written documentation
Use a credit card in case you need to dispute the charge later.
Be cautious when dealing with unknown companies.
Use caller ID to avoid unwanted calls.
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7. When Is Bankruptcy a Good Choice?
Bankruptcy is a legal procedure to relieve a person of excessive debt.
It can be voluntary or involuntary.
It gives debtors a fresh start.
It helps ensure fair treatment for creditors.
It should be a last resort because it damages your credit rating.
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8. Avoiding Bankruptcy Credit counseling Debt management
Sets up a budget and arranges a payment plan
Debt management
Creates a plan to pay off debt
Debtor must turn over checking account and give up credit cards
Debt consolidation
Process of getting one loan to pay off all debts
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9. What Are the Types of Bankruptcy?
Chapter 7
Also called straight or liquidation bankruptcy
Involves the forfeiture of assets in exchange for discharge of debts
Allows for exemptions, or property that a debtor does not have to forfeit, such as tools of trade
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10. What Are the Types of Bankruptcy?
Chapter 11
Also called a reorganization
It is the reorganization of debt as decided by the court.
Allows a business to remain viable
Chapter 13
Also called individual debt adjustment
Involves a 3- to 5-year repayment plan for some of the debt
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11. Building Communications Skills
Persuasive Speaking
Open with attention-getting remarks.
Clearly state the position or action you want listeners to support.
Give supporting data or quotes to strengthen your position.
Prepare for negative reactions or questions.
Listen to campaign speeches and apply techniques to your speech.
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12. Consumer Protection Laws
Fair Credit Reporting Act
Truth-in-Lending Act
Credit Card Act of 2009
Fair Credit Billing Act
Equal Credit Opportunity Act
Fair Debt Collection Practices Act
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13. Credit Card Company Error Correction Policy
Write description of the error.
Mail your letter as soon as possible.
Letter must be acknowledged in 30 days. Error must be corrected or explained in 90 days.
No collection letters will be sent or action taken while the charge is being disputed.
You are still responsible for other items on your bill.
You will not be charged a finance charge on disputed amount unless there is no error.
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14. What Methods Can Be Used to Resolve Credit Disputes?
Alternative dispute resolution (ADR) uses a neutral third party.
Negotiation
Mediation
Arbitration
Filing a lawsuit
Small claims court
Class action lawsuit
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15. How Can You Protect Against Credit Scams?
Credit repair scams occur when someone offers to “fix” your credit rating.
Identity theft occurs when someone uses your personal information to commit fraud or other crimes.
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16. Success Skills Dealing With Difficult People
Deal with the issues head-on.
Meet the person in a private setting.
Ask the person to explain his or her situation.
Listen to what the person is saying and repeat concerns.
Ask for suggestions about how the problem can be resolved.
Talk to others affected by the behavior.
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