Predatory Lenders

Predatory Lenders & Servicing Companies -Why should you care?

Ten Reasons Why You Should Care About Predatory Lending

1. Your lender wants you to pay late. 

Did you know your credit card company can change your payment due date each month hoping you'll miss your payment?  And lenders can charge that $39 late fee even if you're only an hour late.

2. You can't win. 

If you have a problem with your credit card company (imagine that), you cannot sue them in court.  Instead, you have to take your complaint to an "arbitrator"-who, 95% of the time, will rule in favor of the credit card company. 

3. Banks donate more money to politicians than the oil industry.  

Clearly, they're up to something.

4. There are more Payday Loan outlets in the United States than McDonalds restaurants.

And you'll never guess where they all are:  in low-income and minority neighborhoods.

5. People can't choose the careers they want. 

In 2001 the average college grad with loans had $20,402 in debt, and young people are taking on higher-paying but less meaningful work because of the debt albatross.

6. Abuse is their business. 

The more we pay in interest and fees, the higher their profits, so the credit card companies are always looking for excuses to add new fees or jack up interest rates on our debts.

7. All those credit card offers that come in the mail are bad for the environment. 

Enough said.

8. The poor pay the most.

23% of low-income families don't have a checking account, so they rely on expensive financial services instead.   Payday lending and Tax Refund Anticipation Loans alone drain $5 billion from families each year.

9. Discrimination. 

Anyone smell racism in the mortgage market?  If not, read the stats: over 70% of high-income African American home buyers in the Boston area received a subprime mortgage in 2006.   Over half of African American home buyers and over one third of Latino home buyers nationwide received a subprime loan in 2006, as compared to one in five white home buyers.

10. The subprime mortgage scandal. 

Over two million families who received subprime mortgages since 1998 will end up losing their homes to foreclosure.  Many already have. This will cost Americans as much as $164 billion.

Fair Credit Billing Act

The FCBA law applies to "open end" credit accounts, such as credit cards, and revolving charge accounts-such as department store accounts. It does not cover installment contracts-loans or extensions of credit you repay on a fixed schedule. Consumers often buy cars, furniture and major appliances on an installment basis, and repay personal loans in installments as well.

What types of disputes are covered?

The FCBA settlement procedures apply only to disputes about "billing errors." For example:

• unauthorized charges. Federal law limits your responsibility for unauthorized charges to $50;
• charges that list the wrong date or amount;
• charges for goods and services you didn't accept or weren't delivered as agreed;
• math errors;
• failure to post payments and other credits, such as returns;
• failure to send bills to your current address-provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and
• charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.

To take advantage of the law's consumer protections, you must:

• write to the creditor at the address given for "billing inquiries," not the address for sending your payments, and include your name, address, account number and a description of the billing error.
• send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you.

Send your letter by certified mail, return receipt requested, so you have proof of what the creditor received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your letter.

The Fair Credit Billing Act establishes procedures for resolving billing errors on your credit card accounts, including fraudulent charges on your accounts. The law also limits your liability for unauthorized credit card charges to $50 per card. To take advantage of the law's consumer protections, you must:

• write to the creditor at the address given for "billing inquiries," NOT the address for sending your payments. Include your name, address, account number, and a description of the billing error, including the amount and date of the error. See Sample Letter.
• send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you. If an identity thief changed the address on your account and you didn't receive the bill, your dispute letter still must reach the creditor within 60 days of when the creditor would have mailed the bill. This is one reason it's essential to keep track of your billing statements, and follow up quickly if your bills don't arrive on time.

You should send your letter by certified mail, and request a return receipt. It becomes your proof of the date the creditor received the letter. Include copies (NOT originals) of your police report or other documents that support your position. Keep a copy of your dispute letter.

The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your letter.

Find more info; Credit Card Practices and Loan Servicing

Additional BLOG categories;

Predatory Lending,

Mortgage Servicing,

Lender Practices