The Federal Fair Debt Collection Practices Act was enacted to stop abusive, deceptive, and unfair debt collection practices by debt collectors. If you have been a victim of unfair practices of a debt collector, contact Creditlawyers.com for a FREE* evaluation of your debt collection issues. Under debt collection laws, you may be entitled to money damages and your attorneys' fees, if a debt collector has violated the law.
Yes, the law protects you from unfair and coercive debt collection methods. Know how the law can protect you and help you keep the debt collector in check.
Credit card companies are taking action ahead of the new Credit Card Consumer Protection Bill that will take effect in February of 2010. The bill was passed in May of this year and limits the ability of a credit card company to raise interest rates and late fees. The new law forces credit card companies to simplify their terms so that consumers don’t get hit with the unexpected rate or fee increases.
The banking industry lobbied against the bill, saying it could limit credit at a time when the economy is already struggling with a credit crunch. However, credit card companies make most of their profits off of consumers who go too far into debt or fall behind on their payments. In response, some credit card companies like Bank of America, Chase, Citigroup and American Express began going after consumers with a solid credit history.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
Read the story on CNN about the bill and a couple who had Chase bank raise their interest rates despite having good credit, here.
Many may be familiar with the YouTube video posted by Ann Minch, a California woman that grew enraged after Bank of America raised her credit card’s interest rate to 30% after she had been a loyal customer for years. The Huffington Post recently covered Ann’s storing in their article Debtor’s Revolt: Woman Refuses to Pay Off Bank of America Credit Card. Unfortunately, these situations are all too common. You can see the video here:
It seems so simple. The woman is basically saying I am going to penalize you, Bank of America for raising my interest rate again. But is she really making things more difficult for Bank of America, or for herself in the long term? She knows she is going to get numerous calls from debt collectors, but does she realize there will be a permanent judgment against her if she does not pay the debt? And does she realize that although she does not have a job right now, they could garnish future wages and/or any and all bank accounts she will will have in her possession now and in the future?
Plus, if you are in default with one credit card, expect to see the interest rate rise on the others. They are within their rights to do this. What is starting out as a mild snowball could turn into an avalanche and literally ruin her credit and her finances for many, many years to come.
So what should she do?
1) Write an open letter to her State Representative and cc the executives at Bank of America. Be belligerent and persistent with the State Rep; debt collection practices this is a huge issue currently being discussed in Washington DC.
2) Take a look at the agreement with Bank of America to find out if there is an arbitration provision provided. She may be entitled to a free dispute which will require Bank of America to explain why they raised her interest rate.
3) Once she moved to the new bank with her savings, she should ask the new bank if they are willing to open a credit card for her at a lower interest rate and to transfer the entire balance over. Then, she can close the Bank of America card and avoid debt harassment permanently.
4) Once this pops up on her credit report (and it will) she needs to contact the credit reporting boards at Trans Union, Equifax and Experian regularly and report that the issue is being disputed because Bank of America raised the interest rate without cause. if it is being disputed, it cannot affect her credit.
I recognize that the woman is upset and I am not saying she does not have reason to be, but she is handling this entirely the wrong way. At CreditLaw.com, we’ve helped many consumers protect their rights, stop collection calls and address their debt using fair debt collection practices. While in the short term it may feel better to exercise one’s frustration by starting a “debtor’s revolt,” but sacrificing one’s financial future simply to make a point does not make sense. She needs to strategize and move forward.
Craig Thor Kimmel
www.creditlaw.com
1-800 NOT FAIR
