Before the 1960’s, consumer rights were practically nonexistent. Consumers had little access to legal protection or tools to defend themselves against deceptive business practices or faulty products. Further, the process of credit repair was illusory at best. Fortunately, the rapid nature of consumerism created a wave of legislation and policy. Read on to discover the evolution of consumer rights and how they have impacted the U.S. marketplace.
In 1962, President Kennedy spoke to the U.S. Congress about the need for a new consumer movement, a call to action that resulted in the Consumer Bill of Rights. The bill included four basic points:
- Right to Safety—Consumers have the right to protection against products that have caused physical harm (excluding automobiles). This right was officially enacted in 1972 and is enforced by the federal Consumer Product Safety Commission (CPSC). The CPSC has established product standards, testing regulations, and warning labels to assert consumer rights.
- Right to Information—Businesses must provide consumers with accurate information, allowing them to make informed decisions about products and services. This includes correct packaging, advertising, and full disclosure of past issues.
- Right to Choose—Consumers must be given free choice and options when it comes to choosing products and services offered by various companies. The government encourages this right of fair commerce by ensuring limits on price gouging, underselling, patent ownership, monopolies, and anti-trust.
- Right to Be Heard—Consumers have the right to voice complaints and concerns regarding company practices and products. The U.S. Attorney General, the Federal Trade Commission (FTC) and the Better Business Bureau (BBB) represent only a few of the platforms in which consumers may be heard.
By 1985, the Consumer Bill of Rights expanded to include four new points, including:
- Right to Basic Needs—Access to food, water, clothing, shelter, healthcare, education, sanitary living conditions, etc.
- Right to Redress—The right to receive a fair settlement over founded claims of faulty good and services.
- Right to Consumer Education—Consumers must be given enough information to make competent choices about goods and services. They must also be provided with information about their basic consumer rights and how to utilize them.
- Right to a Healthy Environment—Consumers must be provided with a healthy, non-threatening living and working environment to ensure their well-being and the well-being of their dependents.
While this piece of legislation provided groundbreaking protection, the U.S. Department of Justice and the Federal Trade Commission continued to establish new laws to protect consumer rights. Throughout the years, some of the primary consumer laws have included:
- 1968: Truth in Lending Act (TILA)—Requires credit companies to disclose their terms, costs, and conditions to customers before entering into a contract. This law is used to protect and promote fair consumer credit practices.
- 1970: Fair Credit Reporting Act (FCRA)—Written as an amendment to the Consumer Credit Protection Act, the FCRA was enacted “to require insured banks to maintain certain records, to require that certain transactions in United States currency be reported to the Department of the Treasury, and for other purposes.” This Act allows consumers to engage in the verification and maintenance of their own credit information—and more importantly—their credit repair.
- 1975: Fair Credit Billing Act (FCBA)—Written as an amendment to the Truth in Lending Act, the FCBA was enacted to protect consumers from unfair billing practices. It allows them to investigate and dispute credit billing errors.
- 1978: Fair Debt Collection Practices Act (FDCPA)—As an amendment to the Consumer Credit Protection Act, the FDCPA is designed to eliminate abusive collection methods conducted by companies and collection agencies. This law regulates how and when lenders and collection agencies may contact customers about overdue payments. It also outlines consumer and lender rights during the collections process and provides for other credit repair related actions related to collection accounts.
- 1985: Credit Practices Rule (CPR) — As a protection for installment borrowers and cosigners, this legislation shields borrowers from certain kinds of exploitative lending practices. It also requires that cosigners be fully informed regarding their potential liabilities should the primary borrower default.
- 1989: Fair Credit and Charge Card Disclosure Act (FCCCA)—As part of TILA, this law requires creditors to clearly disclose the following information on credit card applications:
- Percent APR
- Minimum finance charges
- Purchase grace periods
- Balance calculation methods
- Annual fees
- Cash advance transaction fees
- Penalty fees for late payments and over-the-limit spending without overdraft coverage
- 1996: Consumer Credit Reporting Reform Act (CCRA)—As an amendment to the FCRA, this law provides rules on reinsertion of deleted information and free credit reports to the following people:
- Those on public-assistance
- Victims of fraud/identity theft
- Those who have been denied credit
- 1996: Credit Repair Organizations Act (CROA)—This piece of legislation was enacted to regulate credit repair business and their advertising practices.
- 2003: Fair And Accurate Credit Transactions Act (FACTA)—This law extended the Fair Credit Reporting Act with additional protections related to how credit reports are accessed and used. Medical information, for example, was limited upon this law’s enactment. This law also required credit bureaus to begin providing at least one credit report annually to all consumers.
- 2009: Credit Card Act (CARD)—Sweeping reforms were passed with this law related to how consumers are billed for new and existing credit accounts.
- 2011: Dodd-Frank Wall Street Reform and Consumer Protection Act—Among other consumer protections, this new law has created a federal agency called the Bureau Of Consumer Financial Protection which will oversee how bankers and other creditors treat consumers.
U.S. consumer laws are vast and growing, and with them, the protection and substantiation of fair business practices. Access to once-evasive consumer laws is readily available to every citizen. The Federal Trade Commission alone provides a comprehensive list of consumer information and regulations. The face of consumerism has undergone aggressive change since 1962, and will likely see additional changes in the future. If you are committed to credit health, learn more about your consumer rights or work with a consumer advocacy lawyer. Laws are most effective when you understand how to utilize them.