In my last article I quoted chapter and verse of the Fair Credit Reporting Act (FCRA) that pertains to the dispute process.  Before you get involved with disputes the three major credit repositories and the bureaucracy of the credit industry you should be familiar with the federal laws that explain your rights as a debtor. The other two are the Fair and Accurate Credit Transactions Act (FACT) and the Fair Debt Collections Act.  They form the basis of your rights as a debtor and the procedures for exercising those rights.

You can find detailed summaries of all three acts in our publication entitled “Basis of Credit Knowledge” available on Amazon.  Just go back to our home page to order.

The following story is an example of how this lack of knowledge can hurt you. 

I had a client who just started a venture that involved taking pictures and he decided he needed some expensive camera equipment to take the pictures.  He ordered the equipment on line and paid for them with his American Express Card.  When he received the shipment the equipment was not what he ordered.  He immediately returned the items and then contacted American Express and asked them to remove the transaction from his bill. The person he spoke with stated they would follow up and comply with his request.     In fact, they did not and when he received his monthly statement the transaction had not been removed.  He immediately contacted them again and reiterated his conversation with their representative.  They stated they had no record of that conversation and insisted he pay the bill.

He subsequently decided not to pay the bill and the result was not good for him.  They cancelled his card and reported his account to the credit repositories as delinquent, ruining his credit. 

Did my client follow proper procedures in this situation?  The answer is no.  First, he should have followed up his conversation with the AE representative in writing.  Second, he should have copied that letter to the three credit repositories and invoked his rights under the Fair Debt Collection Act. The Act states that you have fourteen days to dispute any debt that you do not agree with.  Once you register that dispute, the credit repositories cannot declare your account as delinquent until that dispute is resolved.

I know that weeding through all of this bureaucracy can be boring, but as the old saying goes, ignorance of the law is no excuse.  You must do your due diligence.

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