Consumer protection is a collection of Acts, which advocate for fair, honest and transparent business practices. Diverse policies and laws have been formed to protect consumers from exploitation by manufacturers, suppliers, and sellers. The paper will take an evaluative approach to two of the most common consumer protection acts; The Truth in Lending Act and Fair Debt Collection Practices Act.
The Truth in Lending Act
In the recent past, the debate on consumers’ rights has taken a priority in most social and political settings. Meanwhile, there has been a tremendous change insofar as consumer protection acts are considered. The Truth in Lending Act (TILA) is a case in point. Enacted in 1968, the Act was introduced in a bid to safeguard consumers against commercial exploitation particularly in credit transactions. The Act is aimed, chiefly, at ensuring that consumers understand what they are buying.
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While TILA is a key consumer protection law, the act still has some adjustments to be made in order to fully cope up with the gradually growing commercial activities. The Truth in Lending Act (TILA) has seen significant amendments since its inception, all of which were focused on making the Act more comprehensive and less ambiguous. For instance, on July 30, 2009, the Federal Reserve Truth in Lending Regulation amended key loans regulations pertaining to lending. Thus, all matters that can help improve the act can be addressed to such regulatory agencies such as the Federal Reserve Truth in Lending Regulation.
The Truth in Lending Act contains interesting elements that are privy to all parties in commercial transactions. One of the most important lending aspects that the law touches on is loan interest terms. Accordingly, borrowers are able to access all material information pertaining to the loan when borrowing. Also, the Act stipulates that lenders cannot change interest terms after the contract agreement has been signed, as was the case prior the introduction of the law.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) was introduced in 1987 in a bid to control the involvement of third-party debt collectors (normally acting on behalf of another person). The Act essentially stipulates when and how debt collectors can collect debts.
While the FDCPA safeguards consumers’ interests such as freedom from wrongful debt collection, the law is also prone to some loopholes that need to be addressed. Several years after its inception, various scholars and agencies have pointed out means in which the law could be improved to counter all consumer injustices. Such concerns that require revisiting include, but are not limited to, debt documentation, call frequency and the Act’s flexibility to modern technology. Changes pertaining to the FDCPA can be made through agencies such as the Consumer Financial Protection Bureau (CFPB).
A crucial thing to note about the Act is its provision regarding when debt collectors can contact debtors. The law requires contacts debt collectors to only contact borrowers at convenient hours. Such contacts must be done within the 8 a.m. to 9 p.m. timeframe.
References
Alderman, R. M. (2011). The Fair Debt Collection Practices Act meets arbitration: non- parties and arbitration. Loy. Consumer L. Rev. , 24 , 586.
Bureau, C. F. P. (2013). Ability to Repay and Qualified Mortgage Standards Under the Truth in Lending Act (Regulation Z).
