1. Copyright 2007 Thomson South-Western Chapter 9 Credit Problems and Laws

2. Slide 2 Errors and Fraud Recourse is a remedy for unfair treatment –Credit to your account –Replacement for damaged goods Disputing charges –Call the company and send a complaint in writing –Keep all records that document your claim 9-1 Resolving Credit Problems

3. Slide 3 Sample Dispute Letter 9-1 Resolving Credit Problems

4. Slide 4 Errors and Fraud Preventing credit card fraud –Carry only the cards you need –Shred receipts and statements –Do not loan your credit card to others –Close inactive accounts –Buy online only from reputable companies –Do not give information to people who say they are calling from your bank or credit card company 9-1 Resolving Credit Problems

5. Slide 5 Consumer Advocacy Groups Are organizations that promote consumers’ rights Provide information about laws related to consumers’ rights May focus on a single area, such as food safety, or on a wide range of issues 9-1 Resolving Credit Problems

6. Slide 6 Government Consumer Protection Services Federal agencies –U.S. Consumer Product Safety Commission (CPSC) –U.S. Food and Drug Administration (FDA) –Federal Trade Commission (FTC) –Federal Bureau of Investigation (FBI) State agencies 9-1 Resolving Credit Problems

7. Slide 7 Credit Delinquency Is an overdue debt Collection agencies Garnishment Repossession and foreclosure 9-1 Resolving Credit Problems

8. Slide 8 Avoiding Bankruptcy Bankruptcy provides relief for a person who cannot pay debts Reasons why debtors cannot pay debts –Excessive medical bills –Small business failure –Overspending and unwise use of credit –Losing employment and being overextended –Having no savings to cover unexpected losses Bankruptcy damages a person’s credit rating 9-2 Bankruptcy

9. Slide 9 Avoiding Bankruptcy Credit counseling 9-2 Bankruptcy Debtors must get credit counseling within 6 months before filing for any bankruptcy relief. Debt management Debt consolidation

10. Slide 10 Types of Bankruptcy Chapter 7 Liquidation –Discharge –Exemptions Chapter 13 Wage Earner Plan 9-2 Bankruptcy Chapter 13 is designed mostly for homeowners and working people. New legislation

11. Slide 11 Focus on... Being a Cosigner A cosigner is a person who guarantees the debt of another person A cosigner must repay a loan if the debtor does not Being a cosigner affects your credit report 9-2 Bankruptcy

12. Slide 12 Ethics Bankruptcy Fraud Is the use of bankruptcy laws to make false claims Is a serious federal crime Is committed when people try to hide assets from a bankruptcy court 9-3 Consumer Protection and Laws

13. Slide 13 Building Communications Skills Persuasive Speaking Is used to convince people to take action or support an idea or position Begin by gaining the listeners’ attention Present facts and conclusions State the action you want listeners to take Anticipate questions and prepare answers 9-2 Bankruptcy

14. Slide 14 Credit Reports and Scores Credit report –Gives lenders and others information about your credit history and current status –Available from three major credit bureaus: Equifax, TransUnion, and Experian (TRW) –Consumers can view their credit reports once a year without charge 9-3 Consumer Protection and Laws

15. Slide 15 Credit Reports and Scores 9-3 Consumer Protection and Laws Credit ScoreDescription Up to 499Unacceptable. Credit requests are denied. 500–599Poor. Credit requests are denied or carry very high interest rates. 600–699Fair. Credit requests are granted with medium interest rates and lower limits. 700–749Good. Credit requests are granted with low interest rates and good limits. 749–799Very Good. Credit requests are granted with low interest rates and high limits. 800+Excellent. Credit requests are granted with lowest rates and highest limits.

16. Slide 16 Consumer Rights Fair Credit Reporting Act Truth-in-Lending Act Fair Credit Billing Act Equal Credit Opportunity Act Fair Debt Collection Practices Act 9-3 Consumer Protection and Laws

17. Slide 17 Getting Recourse Alternate dispute resolution –Negotiation –Mediation –Arbitration Filing a lawsuit –Small claims court –Trial court –Class action suits 9-3 Consumer Protection and Laws

18. Slide 18 Credit Scams and Related Crimes A scam is a fake offer, sale, or other gimmick –Loan application scams –Money transfer scams –Credit repair scams –Identity theft –Phishing 9-3 Consumer Protection and Laws

19. Slide 19 Technology Corner Getting a Credit Report Online Credit bureau Web sites provide access to credit reports One report per year is free A fee is charged to receive a credit score Credit protection services –Charge a fee –Will notify you of changes in your credit report 9-3 Consumer Protection and Laws

20. Slide 20 Success Skills Dealing With Change Dealing with change causes stress Try to deal with change in a positive way –Learn about how the change will affect you –Keep a positive attitude and be objective –Get help, support, or counseling, if needed –Take care of your health and build your self- esteem –Expect change to be a part of your life 9-3 Consumer Protection and Laws