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PDLInvestigator
Joined: 24 Feb 2006
Posts: 148
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 Posted: Sat Sep 22, 2007 12:12 pm Subject:
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Thanks for that info! I bookmarked it for future reference!
Again thanks,
Ang
_________________
You will not be punished FOR your anger; you will be punished BY your anger. --Buddah
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Ang
Debt Samaritan
Joined: 27 Jun 2006
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cajunbulldog
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Posted: Sat Sep 22, 2007 12:22 pm Subject:
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Here is the text of the page for archiving on our site.
| Quote: | The Credit Practices Rule
If you are one of the millions of Americans who borrows money, buys items on installment credit, or cosigns for another person's debt, you may want to know about the Federal Trade Commission's Credit Practices Rule. The Rule, which became effective March l, l985, prohibits many creditors from including certain provisions in consumer credit contracts. It also requires creditors to provide a written notice to consumers before they cosign obligations for others about their potential liability if the other person fails to pay. Finally, it prohibits one method of assessing late charges.
What contracts are covered?
The Rule applies to consumer credit contracts offered by finance companies, retailers (such as auto dealers and furniture and department stores), and credit unions for any personal purpose except to buy real estate. It does not apply to banks or bank credit cards; to savings and loan associations; or to some non-profit organizations. (However, similar rules for banks -- under the Federal Reserve Board -- and for savings and loans -- under the Office of Thrift Supervision -- went into effect January 1, 1986.) The Rule does not apply to business credit.
What contract provisions are prohibited?
The Rule prohibits creditors from including certain provisions in their consumer credit contracts. Specifically, credit contracts no longer can include provisions that:
* Require you to agree in advance, should the creditor sue you for non-payment of a debt, to give up your right to be notified of a court hearing to present your side of the case or to hire an attorney to represent you. (These clauses were often called "confessions of judgment" or "cognovits.")
* Require you to give up your state-law protections that allow you to keep certain personal belongings even if you do not pay your debt as agreed. (These clauses were called "waivers of exemption.") State law generally allows you to keep your home, clothing, dishes, and other belongings of a fixed minimum value. However, when the debt incurred is to purchase an item and that item is used as security for the debt, it is permissible under the Rule for a creditor to repossess that item.
* Permit you to agree in advance to wage deductions that would pay the creditor directly if you default on the debt, unless you can cancel that permission at any time. (These clauses were called "wage assignments.") However, a wage or payroll deduction plan, through which you arrange to repay a loan, is a common payment method and is permissible under the Rule.
* Require you to use as collateral certain household and uniquely personal items that are of significant value to you but are of little economic value to a creditor. Such items include appliances, linens, china, crockery, kitchenware, wedding rings, family photographs, personal papers, the family Bible, and household pets. (These were called "household goods security" clauses.) However, if you borrowed money to buy any of these household or personal items, and use the items as collateral, the creditor can repossess the purchased item if you do not repay the loan.
What notices must be given to cosigners?
When you agree to be a cosigner for someone else's debt, you are guaranteeing to pay if that person fails to pay the debt. The Rule requires that you be given a notice that explains the responsibility you are undertaking. Under the Rule, the cosigner notice must say:
You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn't pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility.
You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount.
The creditor can collect this debt from you without first trying to collect from the borrower.* The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record.
This notice is not the contract that makes you liable for the debt.
*Depending on your state, this may not apply. If state law forbids a creditor from collecting from a cosigner without first trying to collect from the primary debtor, this sentence may be crossed out or omitted on your cosigner notice.
This notice is not required when you receive benefits from the contract, such as when you buy goods, take out a loan, or open a joint credit-card account with another person. In these cases, you would be a co-buyer, co-borrower, or co-applicant (co-cardholder) rather than a cosigner. Therefore, the creditor would not be required to provide the notice.
How can late charges be assessed?
A creditor can charge a late fee if you do not make your loan payment on time. However, it is illegal under the Rule for a creditor to charge you late fees or payments simply because you have not yet paid a late fee you owe. This practice is called "pyramiding late fees." Under the Rule, this means that if you do not include the late fee you owe with your next regular payment, it is illegal for a creditor to subtract the late fee from your payment and then charge you a second late fee because the current payment is insufficient. For example, your loan contract may state that your monthly payments are $100 and that you will be assessed a $10 late fee if you pay after the grace period. If you make your $100 loan payment after that time and you do not include the $10 late fee with your next $100 payment, a creditor cannot first deduct the missing $10 late fee from the $100 payment, claim you have now paid $90, and then charge you an additional late fee. But, if you skip one month's payment entirely, the creditor can charge late fees on all subsequent payments until you bring your account up to date. |
http://www.ftc.gov/bcp/conline/pubs/credit/crdtrul.shtm
_________________
Cajunbulldog
Keeping an eye out for consumers.
http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#809
http://www.ftc.gov/os/statutes/fcrajump.shtm
http://www.debtconsolidationcare.com/forums/about216.html
Use this letter to protect your rights under the FDCPA
myfairdebt.com & myfaircredit.com-Good source of case law in forums.
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cajunbulldog
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Joined: 20 Dec 2006
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Posted: Sat Sep 22, 2007 1:01 pm Subject:
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This is very good to know, thank you PDLInvestigator 
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stefan
Joined: 16 Sep 2007
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Posted: Sat Sep 22, 2007 1:33 pm Subject:
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That doesn't really mean much - It just says that a contract can't have a wage assignment provision unless it can be revoked, which is the whole point of a voluntary wage assignment . . . . .
_________________
How I make some extra cash
I earn at least $20 extra every month doing offers. And you don't have to pay a cent.
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goudah2424
Moderator
Joined: 31 Oct 2006
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Posted: Sat Sep 22, 2007 3:04 pm Subject:
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Goudah,
I do respect you are the moderator, but I have to disagree with your comment. They do mean a lot if you are inquiring about how Voluntary Wage Assignment work. I work for a law firm that fight these assignments from PDL (store-front in Canada). We, on a daily basis, get calls from consumers in the States asking about assignments and how they can be revoked. Assignments can be revoked both by fax, mail (Certified and/or Registered). If the PDL sends this request to an employer, the law in Canada states that the employee must be notified that a request has come through about a Voluntary Wage Assignment. All the employee has to do is tell the employer that the matter has been looked after and to disregard the assignment because the copy that is sent to the employer is invalid because the debtor did sign the assignment in person.
A PDL cannot use "Voluntary wage assignment" are not allowed because of these things:
1. They must be signed in person in front of the creditor; Which they are not
2. You can revoke them at any time;
3. Electronic wage of assignments are not valid Checked with the Federal Trade Commission and it was confirmed September 21, 2007
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PDLInvestigator
Joined: 24 Feb 2006
Posts: 148
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AnthonyLemons
Debt Samaritan
Joined: 17 Feb 2007
Posts: 1825
Debtcc Points: 18434
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Posted: Sat Sep 22, 2007 5:07 pm Subject:
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I, also, like Anthony think this is very good and helpful information. Actually, i'd like to reinterate a story to u from a lady here on our forums... She has found herself in the pdl trap and finally found this site... after defaulting on one they sent a wage assignment to her HR dept. The HR head was an atty and told her that she HAD to honor this assignment as it is the law!! She tried her best to fight the HR lady but last i heard to NO avail... Last i know of they are indeed garnishing her wages with NO court order cuz of this hr lady!! So my personal opinion is this information cud help her tremendously!
And if u have any opinions to offer on this case plz do and i will let her know to check this out!
Thanks again,
Ang
_________________
You will not be punished FOR your anger; you will be punished BY your anger. --Buddah
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Ang
Debt Samaritan
Joined: 27 Jun 2006
Posts: 2390
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Posted: Sat Sep 22, 2007 5:56 pm Subject:
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I'm sorry, I didn't mean that as it sounded . . . I was having a bad day at work and wasn't reading what I typed before I posted. My apologies . . .
I just meant to say that this information was already on the site about wage assignments - The excerpt Cajun posted only mentioned the fact that they must be voluntary. There are a few more requirements for wage assignments too that are never followed. Like if you are married your spouse must sign consent too.
The problem is that most HR people don't know this. Most wage assignments are put through because of uneducated HR people. That is what the pdl's depend on. They make "offical" looking documents are trick employers into paying up. Just like these pdl's don't follow the laws on other matters, they don't follow the laws on these. I know of several occasions where even when state law specifically stated wage assignments weren't allowed, an employer still put it though. That is the biggest hurdle with wage assignments.
_________________
How I make some extra cash
I earn at least $20 extra every month doing offers. And you don't have to pay a cent.
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goudah2424
Moderator
Joined: 31 Oct 2006
Posts: 8007
Debtcc Points: 111637
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cajunbulldog
Moderator
Joined: 20 Dec 2006
Posts: 4875
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Posted: Sat Sep 22, 2007 6:27 pm Subject:
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I agree - I know of one person in my state, where they are flat out illegal, who had their employer honor the assignment. The labor dept got involved, and the employer had to refund the money. And you know they aren't going to be getting that money back from the pdl, so in essense the employer ended up paying the payday loan.
_________________
How I make some extra cash
I earn at least $20 extra every month doing offers. And you don't have to pay a cent.
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goudah2424
Moderator
Joined: 31 Oct 2006
Posts: 8007
Debtcc Points: 111637
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Posted: Sat Sep 22, 2007 6:29 pm Subject:
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If you had already notified your employer of your revocation, and they still honored the assignment, they would absolutely be responsible. Now, if you hadn't notified the employer before hand, they may have some wiggle room, depending on your state law. Some state's do not require the employer to notify the employee, since it's voluntary it's assumed the employee is aware of it already.
_________________
How I make some extra cash
I earn at least $20 extra every month doing offers. And you don't have to pay a cent.
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goudah2424
Moderator
Joined: 31 Oct 2006
Posts: 8007
Debtcc Points: 111637
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Posted: Sat Sep 22, 2007 6:32 pm Subject:
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Hummm... well Kate outta love this thread! SHe definately let her HR dept know that she had revoked the wage assignment, yet teh atty hr head said it was indeed legal! She tired arguing and arguing with her but last i spoke to her they were gonna start garnishing her next check. That was about a month or so ago!
I'll pass this on to her.
Thanks guys,
Ang
_________________
You will not be punished FOR your anger; you will be punished BY your anger. --Buddah
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Ang
Debt Samaritan
Joined: 27 Jun 2006
Posts: 2390
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cajunbulldog
Moderator
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Posted: Sat Sep 22, 2007 6:39 pm Subject:
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Well i will definately send her to this thread soon as i can!
And i got ur drift cajun!
Ang
_________________
You will not be punished FOR your anger; you will be punished BY your anger. --Buddah
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Ang
Debt Samaritan
Joined: 27 Jun 2006
Posts: 2390
Debtcc Points: 18752
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