The number of fraud victims each year is staggering. The Federal Trade Commission (FTC) puts it around 25 million people annually—which is nearly 11% of all U.S. adults.
The good news is there's a whole range of consumer protection laws designed to keep you safe from fraud and unfair business practices. Different states have their own additional laws, most of which you can find online. At the federal level, however, there are seven laws that the FTC enforces that apply to the whole country.
Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act requires retailers that offer written warranties to do so in a single, clear, and easy-to read document (including online retailers, thanks to a 2015 amendment). If a retailer does not live up to the terms in that warranty, you can take legal action or file a complaint with the FTC.
The act does not require retailers to offer warranties—nor does it cover oral warranties. So, let's say you're buying something big, like a car, and the seller won't put a warranty in writing. Well, you may want to buy from someone else.
This act inspired many states to adopt their own "lemon laws," but despite common belief, these do not strictly apply only to car sales.
Identity Theft and Assumption Deterrence Act of 1998 (ITADA)
ITADA makes it a federal crime for anyone to knowingly transfer or use—without lawful authority—another person's identification (driver's license, Social Security number, etc.) with the intent to commit, aid, or abet any unlawful activity that violates federal law or is a felony under any applicable state or local law.
In other words, it makes all forms of identity theft totally illegal.
Credit Card Accountability, Responsibility and Disclosure Act (CARD Act)
In a nutshell, this act limits fees and penalties credit card companies can charge, as well as when they can increase interest rates and by how much.
If, for example, your credit card company wants to change the terms of your card, they need to give you 45 days notice. They must also give you the option to cancel your card before such changes take effect. Your credit card company is also not allowed to increase your interest rate during your first year of having your card unless it is tied to a variable index and the introductory rate concludes, you do not follow the terms of a debt management agreement, or you are more than 60 days late on a payment. In addition, they can't hit you with over-the-limit (i.e., overdraft) fees unless you opt-in to this option.
The CARD Act also made it more difficult for those under the age of 21 to obtain a credit card. However, it is possible for students to get a credit card while they're in college.
Fair Credit Reporting Act (FCRA)
Under this act, you're entitled to a free copy of your credit report from each of the three nationwide consumer-reporting agencies—TransUnion, Experian, and Equifax—every 12 months. You can pull these reports for free annually at AnnualCreditReport.com.
The FCRA also entitles you to a free copy of your credit report if you are denied employment, credit, or insurance based on information in your credit report. In this case, however, you must make your request within 60 days of receiving notification of denial.
Truth In Lending Act (TILA)
This law protects you when you have to deal with lenders and creditors. Put a little more plainly, it says that a lender—whether it be a bank for an auto loan or mortgage, or a credit card company—has to tell you upfront about their annual percentage rate (APR), term of the loan, and total costs to you. This information also must appear prominently on documents that you sign and, in some cases, on your billing statements.
Fair Credit Billing Act
Ever been billed for something you returned or never received? Has your credit card company ever charged you twice for the same item or failed to credit a payment to your account? The Fair Credit Billing Act is what protects you in getting these errors corrected and charges reversed.
Fair Debt Collection Practices Act (FDCPA)
This act prevents debt collectors from engaging in practices that can be classified as harassment. For example, they are not allowed to contact you before 8 a.m. or after 9 p.m. Moreover, the collector must identify itself when contacting you by phone and must be truthful in their interactions with you regarding your debt. When a debt collector tells you over the phone (or in writing) that “this is an attempt to collect a debt,” FDCPA is the reason why.
A Few Words About Online Scams
From spam to phishing, money transfer, and tech support scams, there's virtually no end to the ways you can get ripped off online. Your best course of action is to simply ignore any suspicious emails. You know, the kind from random strangers that ask you to send money or offer you first crack at a great investment that's sure to make you rich.
If you do wind up the victim of online fraud, or think you have been, remember that this could happen to anybody. The most important thing to do is to file a complaint with the FTC. Any fraud that exists online (or in the actual world) is covered by one of the laws outlined above.
If you want to do even more, private, volunteer groups, such as the Better Business Bureau (BBB), take consumer complaints and investigate abusive business practices. These groups can encourage businesses to abide by consumer protection laws and help settle consumer disputes.
But the bottom line is, do something. These laws are here to help you. Take advantage of them.