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3 Truths You Should Know About the Federal Truth in Lending Act

by on March 30, 2012

By Meghan Stewart

The Federal Truth in Lending Act (TILA) was implemented into law in 1968 and designed to promote the informed use of consumer credit.  Although complex, TILA was also designed for one simple purpose:  to give consumers legal rights when it comes to using credit.  Below I have outlined 3 primary protections every American is entitled to thanks to TILA.  In an effort to be financially savvy, it’s a must to know your rights and the laws that affect you.

1. If your credit card is compromised and used without your knowledge, there is no specific time limit restricting you from filing an unauthorized report.  This means, if you have a credit card that you rarely use and is only for emergencies, and one day you realize it is stolen.  If you check the balance and it has been used without your authorization, even though it has been six months since those unauthorized transactions, you can still file a report about the identity theft situation.

2. The maximum liability for unauthorized credit transactions is $50 when you card is used offline and $0 when used online.  Most creditors waive the $50 as a part of their zero-liability policy. Also, it should be noted that most creditors will require that you file a police report and an investigation will be open to find the thieve.

3. You don’t have to pay legal fees to dispute an unauthorized charge until the case has been fully investigated.

Just because you have these protections when it comes to identity theft does not mean you don’t want to be a savvy credit user.  It’s important to get informed about safe ways to handle credit and your personal belongings to prevent becoming a victim.

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