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I am in the middle of a billing dispute and I am afraid that it will affect my credit rating. What can I do if incorrect information shows up on my credit report?
A: If any item in your credit report file is incomplete or inaccurate, you can contact the credit reporting agency to dispute that information. The general rule is that the credit reporting agency must investigate the dispute within 30 days after it receives your request for a correction. The credit reporting agency may require that the request be in writing, and when they get it they have 5 days to notify the creditor that the you are disputing the information.
If after the investigation a credit reporting agency determines that certain information is inaccurate or can no longer be verified, it must delete that information within three business days. If an investigation fails to resolve the dispute, you may submit a statement of no more than 100 words describing the dispute to be included with your credit report. For more information on credit you can call our consumer hotline or visit our website.
I have fallen behind on some of my debts and have begun to be contacted by debt collectors, and I feel harassed by their collection efforts. How often can debt collectors contact you regarding debt?
A: for each debt you owe, collectors cannot call and talk to you at home more than twice a week. They cannot use obscene or threatening language or threaten to take action which they do not really plan to take. Debt collectors also cannot disclose your debt to a third party, such as your neighbors, and they must stop contacting you at work if you request it in writing. Under federal law, collection agencies must stop all collection contacts with you if you ask them in writing to stop. For more information about debt collection, or to file a complaint, please contact our Office.
- I have gotten behind on a few bills and I intend to catch up. However, the debt collectors have started to call me at work. Is there anything I can do to stop this?
A: Yes, there is. In Massachusetts, a debt collector can only communicate with you by telephone at a place outside your residence two times in any 30 day period for each debt. Also, if you request orally that a debt collector not telephone you at work, then they may not make those calls for 10 days. If you follow this request within 7 days with a written request to the debt collector, then the collector should not contact you again at work, unless you rescind your request in writing. For more information on debt collection, or to file a complaint, please contact our Office.
- My credit card promised me a low rate. Now it has jumped up quite substantially. Can they do that?
A: If you sign up for a credit card with a low "teaser" rate, your existing balance will likely be subject to the regular and substantially higher interest rate when the low rate period expires. You will need to find out the state where you make your payments to see what their specific laws are on credit card interest rates. If you are not happy with the higher interest rate, then pay your card in full before the rate increases or close the account. For more information on credit cards you can contact our Hotline for a brochure on "The Hidden Price of Plastic".
- I recently received a credit card statement with a charge that I do not believe is mine. What can I do?
A: Once you believe that there is an error on your credit statement, or you otherwise wish to dispute information on your credit card bill, you have sixty days to send the creditor a written notice. While you do not have to pay the disputed amount on the bill, you do have to pay any undisputed amount. The creditor then has thirty days to send a written acknowledgment of your dispute, and may not take action to collect the disputed amount or close your account in the meantime.
If you lose your credit card, or it is stolen, and someone uses your credit card number without your permission, you will owe $50 or the actual unauthorized amount spent before you alerted your credit card issuer, whichever is less. Just keep in mind that if you have authorized someone to use your card in the past, you may not be able to convince your credit card company that the person no longer has permission to use the card.
- I think I lost one of my credit cards. What should I do?
A: You should immediately contact the issuer of the card. All credit card companies are required to have an 800 number that should be in the papers that came with the card or on a current bill. It is extremely important to act quickly, because once you have reported the card lost or stolen, you will not be liable for any further charges to the account. Another good idea, whether you have lost any financial information or not, is to place a fraud alert with all three of the major credit reporting agencies.
P.O. Box 740241
Atlanta, GA 30348
Fraud Victim Assistance Division
P.O. Box 6790
Fullerton, CA 92634
P.O. Box 9530
Allen, TX 75013
- Now that the holidays are over and my bills are coming due, do you have any tips for managing my post-holiday debt?
A: First, look over your credit card statements to see which one has the highest interest rate. You should pay off your high interest card first. Create a monthly plan so that you can pay more than the minimum each month, but always remember to pay your credit card bill monthly, even if it is only the minimum. You should make every effort to pay more than the minimum each month so you decrease the amount of interest you will be paying.
If you realize that you cannot make a payment, contact the creditor as far in advance of your payment date as possible to talk about a payment plan. If you miss a payment it may affect your credit report, so you should try to work something out with the creditor.
- I often use my debit card as a credit card, but after attempting to have a purchase charged back, I was told my card did not have the protections as a regular credit card. Is this true?
A: In some cases, this would be true. Some cards with Visa and MasterCard symbols are not credit cards and will have payments deducted directly from your checking account. Under federal law, you do not have the right to "charge back" problem purchases to a debit card like you do with a conventional credit card. Also under federal law, if a debit card is lost or stolen, you can have unlimited liability for losses if you do not report the problem within 60 days, unlike the $50 maximum liability on credit cards. In Massachusetts, the $50 limit applies to both debit cards and credit cards. In any case, it is important to know the differences in your cards, and you should look over their terms and conditions, or contact your creditor for more information.
- My oldest son is seriously in debt, not only from student loans, but from a credit card he signed up for while in school and is having a hard time paying the charges back in this down economy. Now my youngest is starting college and I don't want him to fall into the same trap. What can I do?
A: We too often see college students get themselves into credit trouble. Too many times young students will apply for, and receive, credit cards while attending school, without being aware of the possible repercussions down the road. While credit cards can be of enormous assistance to students away from home, credit problems can jeopardize a credit rating, possibly preventing the student from receiving mortgages or car loans in the future. In one attempt to combat this all-too-common problem, the American Bankers Association Education Foundation is sponsoring the first annual "Get Smart About Credit Day" on October 16. Bankers will visit colleges, high schools, and other institutions to teach students how to budget, use credit cards responsibly, and build a positive payment history. You should encourage both of your sons to find a local campus participating in this program.
- I believe that I am going to need a loan in the not-too-distant future, so is there anything I can do to protect myself?
A: Extended credit can be helpful, but it is also one of the largest areas where consumers often find themselves in trouble. One of the best ways to avoid problems is to try to save money before there is an unexpected expense that might force you into debt. If you are past this point, however, there are a number of useful tips. A fairly obvious, but often overlooked point, is to shop around. In any consumer transaction, you can always leave if you are not satisfied with the way things are going - and most importantly, do so before you sign any agreements. And when looking over credit agreements, do not focus solely on the monthly payments. Make comparisons of the different interest rates (or "annual percentage rate"), the total amount you will repay, the number of payments, and the amount of any fees. Always read any contracts extremely carefully, and if there is something you are not comfortable with, negotiate with the merchant and get any resolution in writing. If you still don't feel comfortable with the transaction, look somewhere else.
- Is there a statute of limitations on billing for bad debts?
A: There is no statute of limitations on billing for bad debts, but there are statutes of limitations for filing lawsuits and for reporting the debts to the credit reporting agencies. Although these do vary depending upon the type of debt, in general there is a six year statute of limitations for filing a lawsuit to collect upon a debt, and a seven year statute for reporting bad credit. It is rarely a good idea to decide not to pay a good debt if you are relying wholly on the statute of limitations, because there are more complicated issues involved, including when these may be tolled, or extended, or even when the statutory period has begun to run. But for your question, even if the statute of limitations has run, as long as a collector follows the debt collection rules and is not harassing you, they may continue to make reasonable collection efforts, short of going to court.
- I have received an email telling me that the credit bureaus are soon going to be able to send my information to anyone who requests it, and when I called the number in the email to opt-out, they asked for my social security number, so I hung up. Is this legitimate?
A: This email has caused quite a bit of confusion, so you are not alone in your concerns. First of all, the substantive information included in the email is not correct - credit reporting agencies will not be able to provide your credit report to anyone who asks for it. However, you should keep in mind that they may provide this information to anyone with a legitimate business purpose for requesting it. This has often included potential landlords and issuers of credit.
The phone number in the e-mail, however, is a legitimate number set up by the major credit reporting agencies allowing you to opt-out of having your information used to send you solicitations, mainly "pre-approved" credit offers. When you do call it, they may legally ask you for your social security, which would be necessary for them to access your credit account. As always, it is a good idea to be cautious with your personal information, and follow the general rule of only providing the information when you initiate the contact. As for this email, it has been circulated before, and will likely come around again. Whenever you receive any suspicious offers or information, please contact our office with any questions you may have.
- My wife and I are planning on trying to purchase a home in the future, but we are a little concerned about past credit problems hurting our chances. Is there anything we can do?
A: Yes, and it is always a good idea to try to take care of this as early as possible. Because negative information on your credit report can prevent you from buying a home or car, renting an apartment, getting a good job, obtaining a credit card, and simply enjoying life, you should take advantage of a Massachusetts law that entitles you to a free copy of your credit report at least once every year. Checking for problems today can protect you from an unpleasant and untimely surprise at the very moment when you need credit. To obtain your free report, contact each of the three major credit reporting agencies (Transunion, Experian, and Equifax). If you discover a mistake on your report, you have the right to dispute the information both with the company that furnished it to the credit reporting agency and with the credit reporting agency itself. As a general rule, you should communicate IN WRITING and via certified mail.
- A creditor of mine just threatened to garnish my wages. Can they do that?
A: That depends. Collectors are generally not allowed to threaten to garnish your wages unless they inform you that a court order is needed to take this action. However, there are some exceptions to this rule. For example, if the debt you owe is to a government agency, most likely a student loan guarantor, a court order may not be necessary. Either way, you would be entitled to receive 30 days' notice prior to any order to your employer to garnish your wages, and you must have an opportunity for a hearing concerning the existence of, or the amount of, the debt. If you have any other questions, please contact our Consumer Hotline at (617) 727-8400.
- I just found an old store credit that I received after returning an item a long time ago. I think it is about four years old. Is that too long for me to still use the credit?
A: No, it shouldn't be, Frank. In Massachusetts, a store may not impose a limit on the time period of a credit slip that is less than five years. A similar question we receive relates to the expiration date allowed for gift certificates in Massachusetts. They have to be valid for at least two years. If you are having any problems where a retail establishment will not give you the credit you are entitled to, please contact Tom Reilly's Consumer Hotline at (617) 727-8400.
- A store tried to charge me a fee on top of the regular price for using a credit card. Can they do this?
A: No, they cannot. No seller in any transaction may add a fee to a cardholder who chooses to use a credit card instead of cash, check or other means. However, a seller may offer a discount to induce a customer to pay by these other means if the discount is offered to all prospective buyers and its availability is clearly and conspicuously disclosed.
- My credit card company charges a $29 late fee to my account even when I am only one day late in sending in my payment. Isn't that excessive?
A: Whether a late fee is legal or not depends on the state in which your credit card company is headquartered. The Supreme Court has ruled that banks can charge their customers late fees according to the laws in their home state, regardless of where the consumer lives.
In general, if the credit card company is headquartered in Massachusetts, the maximum late fee they can charge consumers is $10 and the maximum interest rate is 18%. However, it is important to be aware that in other states, such as South Dakota and Delaware - where many banks are incorporated - there are no limits on these amounts.
- A debt collector has been calling me lately about a bill that is over eight years old. Hasn't the statute of limitations passed on that debt yet?
A: In general, the statute of limitations for most debts is six years, not including exceptions and tolling periods but that applies only to the time a party can initiate court action against you. There are also other statutes of limitations which apply to the amount of time a company may relay the information to be transmitted by the credit reporting bureaus. Even after these applicable periods have passed, however, a collector may still contact you and make reasonable attempts to collect the debt. There are numerous laws and Attorney General Regulations that govern the extent of "reasonable" efforts, so if you feel a collector may be violating them, please contact our office.
- I had returned a pre-approved credit card offer in the mail, but I later received notice that I was refused credit from the company. How can they do that if I was already "pre-approved?"
A: Credit card companies often send these "pre-approved" offers in mass mailings. Under the new definition of "firm offer of credit" under The Fair Credit Reporting Act, they are not required to issue credit cards to all of those who may return the "pre-approved" offers. The companies may deny replies based on "credit worthiness" standards they establish before making the offer.
You are allowed to contact the creditor to determine what their specific criteria are, and if you are denied, they have to provide an explanation to you if you want one. Joan, you should also keep in mind that pre-approved credit card offers are one of the major sources of information for identity thieves. So if you have decided not to reply, you may want to thoroughly destroy the offer before disposing of it. Under Massachusetts law, you can also eliminate many of the credit offers you receive, by contacting the three major credit reporting agencies and requesting to opt out.
If you have any more questions regarding credit transactions, please contact our hotline, where you may also request the Attorney General's Consumer Guide to Credit.
- Does a store collecting its own debt have to follow debt collection laws in Massachusetts?
A: Yes, Bob, stores as well as collection agencies attempting to collect a debt from Massachusetts consumers need to follow the Attorney General's debt collection regulations. These regulations limit the contact debt collectors can have with consumers. To receive a copy of the Attorney General's Guide to Credit, contact our hotline.
- I paid for a credit card and have yet to receive it. What can I do?
A: Your card may have been stolen or there may have been a delivery problem. Call the issuer to check on whether your card(s) has been mailed. Many companies have toll-free numbers and 24-hour service to deal with such emergencies. By law, once you report the loss or theft, you have no further responsibility for unauthorized charges. In any event, your maximum liability under federal law is $50 per card. You can file your complaint with our Consumer Complaints Office where we can contact the issuer on your behalf.
- Don't we have a law in Massachusetts that prohibits my credit card company from sharing my private information with other companies?
A: Yes, and the Attorney General has a consumer guide, Important Privacy Rights and Protections, to help Massachusetts residents understand their privacy rights under a new federal law. This law, the Gramm-Leach-Bliley Act (GLBA), requires financial institutions to tell their customers what kind of personal financial information they keep and what their policies are regarding sharing that information. The law also requires these institutions to give customers the opportunity to prohibit institutions from sharing that information with unaffiliated third parties.
These notices must be sent annually. You should review these privacy notices carefully to see what you need to do to protect your personal information.
To receive a copy of Attorney General Reilly's guide "Important Privacy Rights and Protections," consumers can call the AG Reilly's toll free Insurance Hotline at (888) 830-6277 or log onto www.ago.state.ma.us.
- My credit card promised me a rate of 5%. Now it is up to 11%. Can they do that?
A: If you sign up for a credit card with a low "teaser" rate, such as 5%, your existing balance will likely be subject to the regular and substantially higher interest rate when the low rate period expires. You will need to find out the state where you make your payments to see what their specific laws are on credit card interest rates. If you are not happy with the higher interest rate, then pay your card in full before the rate increases or close the account. For more information on credit cards you can contact our Hotline for a brochure on "The Hidden Price of Plastic."
- My car was repossessed a few weeks ago. They are charging me a storage fee that was placed on my personal belongings. Can they do that?
A: Yes, if the consumer is given advance notice that their personal goods will accrue a storage fee if their car is repossessed. You do have a right to collect your personal goods when your car is repossessed. If you are having difficulties contact your local police and Attorney General's Office at (617) 727-8400.
- My husband filed for bankruptcy, will it affect my credit?
A: The Equal Credit Opportunity Act says that it is illegal to discriminate against one spouse based on the credit worthiness of the other. However, as a practical matter, the finances of one spouse often have an impact on the other spouse. Your finances can become entangled.
For example, if you held joint credit card accounts with your spouse prior to the bankruptcy, the bankruptcy will be listed under those accounts on your credit report. Also, if you plan on relying on any of your spouses's income to repay a loan or to secure a loan with any joint property, a creditor can check your spouse's credit.
You may want to speak to a bankruptcy attorney to discuss all of the effects the bankruptcy may before either one of you decides to fill.
- Do newspapers have a right to publish people's assets/debts, such as on payment of taxes and homes? Is this an invasion of privacy?
A: If the information is a public record, then a newspaper is permitted to publish the information. Massachusetts case law indicates that a problem may arise when a creditor, for example, posts a list of "deadbeats" in its store window. This "publication" of a debt to third parties (persons who are not the debtor or the creditor) is a violation of the Attorney General's Debt Collection regulations.
- A store charged me a $1.50 surcharge for paying with a credit card. They said it was their policy. Can they do that?
A: The law is a little confusing in this area. Massachusetts law prohibits sellers from adding a surcharge for using a credit card. However, a seller is permitted to offer a discount for payment by cash. So in your case, if the store is specifically adding a $1.50 surcharge to their regular price, that would not be permitted.
- How long can my bankruptcy stay on my credit report?
A: In general, judgments remain on your credit report for six to ten years from the date filed (depending on provincial legislation). Bankruptcies remain on your credit file for six to seven years from the date of discharge or fourteen years from the filing date (depending on provincial legislation). Registered items remain on file for five years from the date reported.
Under M.G.L. Chapter 93, Section 56, you have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit repair company or credit service organization has the right to have accurate, current, and verifiable information removed from your credit report. In most cases, under state and federal law, the consumer credit reporting agency must remove accurate, negative information from your report only if it is over seven years old, and must remove bankruptcy information only if it is over ten years old.
- Once my vehicle is repossessed, is there any way for me to get it back?
A: For a financed vehicle, yes. Once a creditor has repossessed your vehicle, he or she must send you a notice telling you that you have twenty days to regain possession of the vehicle before the company can sell it. At this point, however, the creditor may require that you pay off the entire balance of the loan plus reasonable repossession costs in order to regain possession of the car.
For leased vehicles, any right you have to regain possession of your car would be stated in the lease contract.
- I recently fell behind in my bills. I need some help in working out a budget and setting up payment plans with the companies that I owe. Is there anyone I can call?
A: Yes. There are several non-profit credit counseling agencies that can offer you this kind of assistance. They can help you with budgets or payment plans if youre behind on your credit card or loan payments. To find an agency in your area, you should contact the National Foundation for Consumer Credit at (800) 388-2227.
- I am looking for a debt consolidation loan. How can I check out the companies offering such loans, and what should I ask them?
A: There is a lot of marketing and advertising surrounding these types of loans. Make sure you look carefully at the terms of the loan, the interest rate being charged, the length of the loan, late fees, and whether you need any collateral to secure the loan.
All lending institutions have to be registered with the Division of Banks and Loan Agencies. You may want to contact our Consumer Complaint Hotline at (617) 727-8400 for their number and see if there are any written consumer complaints on file.
- Can unpaid medical bills be recorded on your credit report?
A: Yes, unpaid medical bills can be recorded on your credit report just like any other unpaid bills. Hospitals and health care providers may turn your account over to a debt collector, and unpaid medical bills can damage your credit record.
- Can I be held responsible for my husband's credit card debt?
A: In general, if your husband applied for the credit card in his own name, and you were not an authorized user, and your income information was not used for the requested credit, then you probably won't be held liable for the debt.
If credit card companies are trying to collect your husband's debt from you, contact our Consumer Complaint Hotline at (617) 727-8400 and file a complaint.
- I have debt collectors harassing me at home about four times a day. Can they do this?
A: A debt collector cannot contact you at your home more than twice for each debt in a seven day period. Also, when calling you at home, a collector can only call during "normal waking hours" between 8 a.m. and 9 p.m. If the debt collectors are using threatening language or calling you outside your normal waking hours, you should contact our Consumer Complaint Hotline at (617) 727-8400 and file a complaint.
- Can a debt collection agency leave a message for me with a neighbor?
A: No. A creditor may not imply the existence of a debt to a third party, including the debtor's neighbors. However, a collector may contact your neighbor if and only if you cannot otherwise be located, and in that case a debt collector may only ask about your whereabouts.
- When you dispute an amount on your credit card, is there a time period in which the company must investigate?
A: Yes, once a credit card company receives written notice from you of a billing error, they must investigate the problem and either correct the error or explain why the bill is correct within two billing cycles or 90 days -whichever is less.
- Do I have the right to keep my credit card company from disclosing personal information about my account to others?
- My credit card company charges a $29 late fee to my account even when I am only one day late in sending in my payment. Isn't that excessive?
A: That is a lot to pay for a late fee, but whether it is legal or not depends on the state in which your credit card company is headquartered. The Supreme Court has ruled that banks can charge their customers late fees according to the laws in their home state, regardless of where the consumer lives.
In general, if the credit card company is headquartered in Massachusetts, the maximum late fee they can charge consumers is $10 and the maximum interest rate is 18%.
However, it is important to be aware that in other states, such as South Dakota and Delaware -where many banks are incorporated- there are no limits on these amounts.
So, if your credit card company is based out-of-state and has disclosed to you that your account is subject to a late payment fee, if you are late in sending your payment to them, they can probably charge an additional $29 to your account.
- What is the maximum interest rate a credit card company can charge a consumer?
A: It depends on the state where your credit card company is headquartered. The Supreme Court ruled that banks can charge their customers according to the laws in their home state, regardless of where the consumer resides. In Massachusetts, interest rates are generally limited to 18%. However, in other states where the majority of major credit card companies are located, there are no limits on these amounts.
- I'm constantly getting pre-approved credit cards in the mail. What can I do to stop getting these?
A: You can contact your credit reporting agencies to stop the onslaught of credit card solicitations you receive through the mail. Most consumers receive unsolicited mail from credit card companies saying "Congratulations! You are approved to receive XYZ credit card. Just sign the form and return it to us." Under the new Massachusetts law, you can stop many of these solicitations by telling credit reporting agencies that they may not allow your credit report to be used for "prescreening." To do so, call or write to the major reporting agencies and inform them that you want to "opt out" of prescreening.
Here is the contact information for those agencies:
To report fraud, call: 800-525-6285 and write:
P.O. Box 740241, Atlanta, GA 30374-0241
Hearing impaired call 1-800-255-0056 and ask the operator to call
the Auto Disclosure Line at 1-800-685-1111 to request a
copy of your report.
To report fraud, call: 888-EXPERIAN (397-3742) and write:
P.O. Box 9530, Allen TX 75013
To report fraud, call: 800-680-7289 and write:
Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634