Unfair credit – Lawmakers herald U.S. credit card rules – Yahoo! Canada News
Posted by admin on Mar 10, 2010 in General | 0 commentsLawmakers herald U.S. credit card rules – Yahoo! Canada News
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Mon Feb 22, 12:59 PM
NEW YORK (Reuters) – The Obama administration heralded new rules protecting U.S. credit card holders from certain fees and rate hikes on Monday, noting the rules are part of a wider effort to increase consumer protection.
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The implementation of rules from the U.S. credit card act, signed into law in May, will help cardholders understand how much their credit cards cost to use, U.S. Treasury Secretary Timothy Geithner and President Barack Obama said in statements.
The new rules restrict credit card issuers such as Bank of America Corp and JPMorgan Chase & Co from hiking rates on borrowers that are late with their payments. The rules also prevent card companies from charging over-limit fees, unless customers have previously given the companies permission to process transactions that would take their account over its limit.
“For too long, credit card companies have had free rein to employ deceptive, unfair tactics that hit responsible consumers with unreasonable costs,” President Obama said in a statement on the implementation of the credit card bill.
“But today, we are shifting the balance of power back to the consumer and we are holding the credit card companies accountable.”
Americans pay around $15 billion a year in penalty fees, the White House said in a statement when the credit card act was first signed.
The rules also call for card statements to be written in plain language, with promotional rates clearly signaled.
Treasury Secretary Geithner said more such protections are needed for consumers. The Obama administration is still fighting for a single, independent consumer financial protection agency, he said.
Separately, in a report on Monday, credit rating agency Moody’s Investors Service said that while the rules will cut interest income and fees for U.S. card issuers, they should have only a small impact on these companies’ profitability. Moody’s does not expect to see further rating changes for card companies as a result of the act, according to the report.
Citigroup Inc, American Express, Capital One Financial Corp and Discover Financial Services, along with JPMorgan and Bank of America, are the six largest U.S. card issuers.
(Reporting by Elinor Comlay)
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If you’ve head that there may be a way that you don’t have to pay off your loan, credit card and car finance, then you’ll probably want to know more about it, and whether this actually applies to you.
Here’s what you need to know.
1. Thousands of people have been affected by an Unfair Credit Agreements, and many are looking into finding out if they are entitled not to pay their creditors.
2. There are many types of credit agreement that are affected, so if you’ve got a loan, vehicle finance, credit card, store card, or a deferred (buy now, pay later) loan, then you might want to see if you’re affected.
3. In order to be eligible to have your agreement checked, you’ll need to have a balance of at least £1000 on your agreement and over 12 months left of the agreement. If this is the case, then you might want to go ahead, and see whether you legally don’t have to pay off your creditors.
4. The next step involved finding a reputable and experienced claims company who will be able to guide you through the process, and tell you what you need to know, and what to expect.
5. You’ll need a copy of the agreement that you want to challenge, and if you don’t have a copy, then you’ll need to ask your creditors for it.
6. If you don’t have a copy of it, then you’ll need to ask your creditors for it, because without it, there is no way of knowing whether the credit agreement is legal or not.
7. Once the agreement obtained, it is audited by the claims company and the solicitor, who will then be able to determine whether it is an unenforceable credit agreement or not.
8. The claims company will then inform you’ll as to whether you have grounds to prosecute the lender, and what happens next.
9. If the lender is found to be in breach of the Consumer Credit Act, then the lender will be informed, and will have to decide whether to settle out of court, or go to court and challenge the findings of the claims company.
10. If you are successful with your challenge, and the credit agreement is unenforceable, you won’t have to pay it off, which is likely to be a worry off your mind in the current financial climate.
Now you know more about how to what to expect, is it time for you to check your loans and credit cards, and challenge an unfair credit agreement?