10: Consumer Credit Transactions

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Learning Objectives

After reading this chapter, you should understand the following:

How consumers enter into credit transactions and what protections they are afforded when they do
What rights consumers have after they have entered into a consumer transaction
What debt collection practices third-party collectors may pursue

This chapter and the three that follow are devoted to debtor-creditor relations. In this chapter, we focus on the consumer credit transaction.

10.1: Introduction to Consumer Credit Transactions
This page discusses the complexities of consumer debt in the U.S., noting that average credit card debts vary significantly and total household debt reached $13.3 trillion in 2007. While many households carry no credit card debt, the median debt stands at $1,900. The importance of credit availability to the economy necessitated consumer protection laws during credit transactions, contract signings, and debt collections.
10.2: Entering into a Credit Transaction
This page discusses U.S. regulations on credit costs, emphasizing usury laws, the Truth in Lending Act (TILA), and the Equal Credit Opportunity Act (ECOA) that protect consumers and ensure fair access to credit. It highlights consumer disclosures, laws against discrimination, and issues like redlining and its impact on minority communities. Additionally, the Fair Credit Reporting Act is mentioned for promoting accuracy in credit reporting and protecting consumer rights.
10.3: Consumer Protection Laws and Debt Collection Practices
This page discusses consumer rights regarding credit purchases, including cancellation rights, billing error correction, and debt collection regulations. Consumers can cancel specific purchases within three days. The Fair Credit Billing Act addresses billing disputes, while the Fair Debt Collection Practices Act (FDCPA) regulates collection agencies, prohibiting harassment and allowing lawsuits for violations.
10.4: Cases
This page discusses legal cases involving alleged discrimination and violations of the Fair Credit Reporting Act (FCRA). The court is examining a sex discrimination claim under the Equal Credit Opportunity Act (ECOA) regarding Rosa's denied loan application and the motivations behind it. Additionally, it addresses attorney Barbara McCullough's potential willful violation of the FCRA by improperly obtaining Christine Rodgers' credit report.
10.5: Summary and Exercises
This page outlines federal laws that protect consumers in credit transactions, such as the Truth in Lending Act and the Fair Debt Collection Practices Act. It emphasizes transparency, non-discrimination, and regulation of debt collection. The text also presents legal scenarios related to consumer rights, including billing disputes and credit report accuracy, highlighting the complexities of consumer protection in credit issues.

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