Consumer Credit Law: Disputes, Collections, and CFPB Complaints

Consumer credit law gives you a set of rights and protections that run from the moment a lender quotes you a rate through the day a collector calls about an old balance. Four federal statutes do most of the work: the Truth in Lending Act controls what lenders must disclose, the Fair Credit Reporting Act governs the accuracy of your credit file, the Fair Debt Collection Practices Act limits how collectors can contact you, and the Equal Credit Opportunity Act bars discrimination in credit decisions. When any of these rules are broken, you can dispute in writing, complain to a federal regulator, and in many cases sue for damages and attorney’s fees.

What Lenders Must Tell You Before You Borrow

The Truth in Lending Act requires lenders to spell out the real cost of credit before you sign. That means the Annual Percentage Rate, the finance charge in dollars, and a payment schedule showing how much of each installment goes to interest versus principal.¹ The formatting is standardized so you can compare offers side by side.

Credit card issuers must give you at least 45 days’ written notice before making significant changes to your account terms, like raising your interest rate.² If a lender violates TILA’s disclosure rules, you can sue for statutory damages on top of any actual damages, plus attorney’s fees. For loans secured by real property or a dwelling, damages range from $400 to $4,000. For open-end credit not tied to real estate, the range is $500 to $5,000. Consumer lease violations carry damages between $200 and $2,000.³

Three-Day Right to Cancel Home-Secured Credit

When you take out credit secured by your primary home, such as a refinance or home equity line, you get a three-day cooling-off period. You can cancel the transaction for any reason by notifying the lender before midnight on the third business day after you sign or receive the required disclosures, whichever comes later.⁴ This right does not apply to a mortgage taken out to buy the home in the first place. If the lender fails to provide the required disclosures, the rescission window stays open far longer than three days.

Disputing Charges on Your Credit Card

The Fair Credit Billing Act gives you a structured process for challenging errors on your credit card statement. You have 60 days from the date the statement was sent to notify the creditor in writing. Your notice must identify the account, describe the billing mistake, and explain why you believe it’s wrong.⁵

The creditor has 30 days to acknowledge your dispute in writing. They must resolve it within two complete billing cycles, and in no event longer than 90 days. During the investigation, the creditor cannot try to collect the disputed amount or report it as delinquent. A creditor who ignores these rules forfeits the right to collect the disputed amount, up to $50 per violation.⁵ The $50 cap sounds small, but the real leverage is the creditor’s inability to collect or damage your credit while the dispute is open. Miss the 60-day window and you lose these protections entirely.

Fixing Errors on Your Credit Report

The Fair Credit Reporting Act controls how credit bureaus collect, maintain, and share your financial data. You can see what’s in your file through free weekly reports from the three major national bureaus at AnnualCreditReport.com, a program that started during the pandemic and became permanent.⁶ Equifax provides an additional six free reports per year through 2026 on top of the weekly access.⁷

When you spot an error, dispute it directly with the bureau. The bureau has 30 days to investigate and verify the information with its source. If you provide additional relevant information during that window, the deadline extends by up to 15 days. If the bureau cannot verify the disputed item, it must correct or remove it.⁸ A bureau that willfully ignores these rules can be sued for actual damages or statutory damages between $100 and $1,000.

Negative information generally falls off your report after seven years. Bankruptcy can remain for up to ten years from the date of the filing. You also have the right to place a security freeze on your credit file at no cost, which prevents anyone from opening new accounts in your name until you lift it.⁸

Identity Theft Tools

If someone opens accounts in your name, you have options beyond a standard dispute. A fraud alert requires creditors to take extra steps to verify your identity before extending new credit. An initial alert lasts at least one year and only requires a good-faith belief that you’re a victim or about to become one. An extended fraud alert, available after you file an identity theft report, lasts seven years.⁹

You can also demand that the bureau block fraudulent information from appearing on your report. Provide proof of your identity, a copy of your identity theft report, and a statement identifying which accounts are fraudulent. The bureau must block the information within four business days and notify the company that reported it.¹⁰ A block tells the furnisher an identity theft report exists, which discourages them from simply re-reporting the same fraudulent account.

Dealing With Debt Collectors

The Fair Debt Collection Practices Act applies to third-party collectors, not the original creditor. Collectors cannot call before 8 a.m. or after 9 p.m. in your local time zone, contact you at work if they know your employer prohibits it, or reach you at all once they know you have an attorney on the debt.¹¹ Threats of violence, profane language, and false claims that you’ve committed a crime are all prohibited.

Within five days of first contacting you, a collector must send a written notice stating the amount owed and the name of the creditor. You then have 30 days to dispute the debt in writing. If you do, the collector must stop all collection activity until they provide verification, such as documentation from the original creditor or a copy of a judgment against you.¹² This is the most powerful tool you have early in the process, and collectors count on most people not using it.

You can stop a collector from contacting you altogether by sending a written cease-communication notice. After receiving it, the collector can only contact you to confirm they’re stopping collection efforts or to notify you of a specific legal action.¹¹ A cease letter doesn’t erase the debt, and the collector can still sue you. But it stops the phone calls.

Call Frequency and Digital Contact

Federal regulations cap how often a collector can call about a specific debt. A collector is presumed to violate the law if they call you more than seven times within seven consecutive days about the same debt, or if they call within seven days after actually speaking with you about it.¹³ These limits apply per debt.

Collectors can use email, text, and social media, with restrictions. Any social media message must be private, not visible to your contacts or the public, and a collector sending a friend or connection request must identify themselves as a debt collector.¹⁴ If you tell a collector to stop using a particular channel, they must honor that request.

A collector who violates the FDCPA can be sued for up to $1,000 in statutory damages per lawsuit, plus actual damages and reasonable attorney’s fees.¹⁵ The attorney’s fees provision matters more than the $1,000 cap in practice, because it lets a consumer rights lawyer take your case on contingency.

Protection Against Lending Discrimination

The Equal Credit Opportunity Act makes it illegal for a lender to use your race, color, religion, national origin, sex, marital status, or age as a factor in credit decisions. Lenders also cannot penalize you for receiving public assistance income or for exercising any right under consumer credit law, such as filing a billing dispute.¹⁶

When a lender denies your application or takes other adverse action, they must notify you within 30 days and provide the specific reasons. A vague statement like “insufficient credit history” is not enough. The notice must identify the actual factors, such as the particular delinquencies or the debt-to-income ratio that drove the decision.¹⁶ Without specific reasons, you can’t fix whatever the lender found problematic.

If you apply for a first-lien loan on a home, the lender must automatically give you a free copy of every appraisal and written valuation obtained in connection with your application, regardless of whether the loan closes. The lender must notify you of this right within three business days of receiving your application and deliver the valuations promptly after completion, or at least three business days before closing, whichever comes first.¹⁷ The lender cannot charge you for these copies or hold them back as leverage toward closing.

Extra Protections for Active-Duty Servicemembers

Active-duty servicemembers get rights beyond what civilians have. The Servicemembers Civil Relief Act covers pre-service debts, and the Military Lending Act limits the cost of credit taken on during service.

The SCRA caps interest at 6 percent per year on any debt you took on before entering active duty, including credit cards, auto loans, student loans, and mortgages. The cap applies throughout your period of service, and for mortgages it extends an additional year after service ends.¹⁸ The excess interest is forgiven entirely, not deferred, and your monthly payment must be reduced to reflect the lower rate.

To activate the cap, send your creditor a written request with a copy of your military orders. You have up to 180 days after service ends to submit the request, and the rate reduction applies retroactively to the start of your active duty.¹⁹ One trap to watch: if you refinance or consolidate a pre-service loan while on active duty, the new loan may be treated as debt incurred during service and lose the 6 percent protection.

The SCRA also prevents creditors from repossessing personal property, including your vehicle, without a court order if you purchased or leased the property and made at least one payment before entering active duty.²⁰ It buys time, not forgiveness: a creditor can still charge late fees, report missed payments, and sue in court.

The Military Lending Act caps the total cost of credit at 36 percent for active-duty servicemembers and their dependents. The MLA covers credit cards, payday-style loans, and certain installment loans, but not residential mortgages or loans used to purchase a vehicle or personal property when the loan is secured by that purchase.²¹ The 36 percent figure includes not just interest but fees and charges rolled into the cost of the loan.

Deadlines for Filing a Lawsuit

Every consumer credit statute has a filing deadline, and missing it means losing the right to sue regardless of how strong your claim is. These windows are shorter than most people expect:

Fair Debt Collection Practices Act: One year from the date of the violation.²²
Truth in Lending Act: One year from the date of the violation for most claims. Violations involving high-cost mortgage provisions get three years.³
Fair Credit Reporting Act: Two years from the date you discover the violation, or five years from the date it occurred, whichever comes first.⁹

These apply to federal lawsuits. Filing a complaint with the CFPB or another agency is separate and doesn’t extend or restart the clock. If a collector violated the law 11 months ago and you’re still gathering documents, don’t wait for a perfect case. Talk to an attorney before the one-year mark passes.

How to File a Complaint With the CFPB

The Consumer Financial Protection Bureau accepts complaints about credit cards, mortgages, auto loans, student loans, debt collection, and credit reporting. Submit online at consumerfinance.gov, by phone at (855) 411-2372, or by mail to P.O. Box 27170, Washington, DC 20038.²³²⁴

Pull together the specifics first: the company name, type of product, relevant account numbers, dates, and documentation of your attempts to resolve the issue directly. Attach copies of statements, contracts, or collection notices. The online form asks what happened and what outcome you consider fair.

After you submit, you’ll get a tracking number. The CFPB forwards your complaint to the company, which generally has 15 days to provide an initial response. Most cases reach a final resolution or formal explanation within 60 days.²³ You can log into the portal any time to check the status or add information. A CFPB complaint doesn’t replace a lawsuit, but companies tend to take complaints routed through a federal regulator more seriously than a letter from an individual consumer.

1
Office of the Law Revision Counsel. 15 USC 1601 – Congressional Findings and Declaration of Purpose
2
Consumer Financial Protection Bureau. 12 CFR 1026.9 – Subsequent Disclosure Requirements
3
Office of the Law Revision Counsel. 15 USC 1640 – Civil Liability
4
Office of the Law Revision Counsel. 15 USC 1635 – Right of Rescission as to Certain Transactions
5
Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
6
Federal Trade Commission. You Now Have Permanent Access to Free Weekly Credit Reports
7
Federal Trade Commission. Free Credit Reports
8
Office of the Law Revision Counsel. 15 USC Chapter 41 Subchapter III – Credit Reporting Agencies
9
Federal Trade Commission. Fair Credit Reporting Act
10
Federal Trade Commission. Fair Credit Reporting Act Section 605B – Block of Information Resulting From Identity Theft
11
Office of the Law Revision Counsel. 15 USC 1692c – Communication in Connection With Debt Collection
12
Office of the Law Revision Counsel. 15 USC 1692g – Validation of Debts
13
eCFR. 12 CFR 1006.14 – Harassing, Oppressive, or Abusive Conduct
14
eCFR. 12 CFR Part 1006 – Debt Collection Practices (Regulation F)
15
Office of the Law Revision Counsel. 15 USC 1692k – Civil Liability
16
Office of the Law Revision Counsel. 15 USC 1691 – Scope of Prohibition
17
Consumer Financial Protection Bureau. ECOA Valuations Rule – Small Entity Compliance Guide
18
Office of the Law Revision Counsel. 50 USC 3937 – Maximum Rate of Interest on Debts Incurred Before Military Service
19
U.S. Department of Justice. Your Rights as a Servicemember – 6 Percent Interest Rate Cap for Servicemembers on Pre-Service Debts
20
Consumer Financial Protection Bureau. Auto Repossession and Protections Under the SCRA
21
Office of the Law Revision Counsel. 10 USC 987 – Terms of Consumer Credit Extended to Members and Dependents – Regulations
22
Federal Trade Commission. Fair Debt Collection Practices Act
23
Consumer Financial Protection Bureau. Submit a Complaint
24
Consumer Financial Protection Bureau. Contact Us