Question

protecting credit assignment
part a: multiple choice (highlight the best answer)

1. under the fair credit billing act (fcba), if you believe your bill is incorrect, what should you do first?

a) refuse to pay the entire bill
b) notify the creditor in writing with supporting information
c) call your bank and close the account immediately
d) wait until the creditor contacts you

1. which of the following is a warning sign of debt problems?

a) paying your full balance on time every month
b) using savings to pay for necessities
c) keeping track of all credit card numbers
d) reading online privacy policies

1. the fair debt collection practices act (fdcpa) prohibits:

a) consumers from filing for bankruptcy
b) creditors from charging interest
c) abusive practices by debt collectors
d) banks from issuing credit cards

1. cosigning a loan means:

a) you help someone find a good lender
b) you agree to be responsible if the borrower doesn’t pay
c) you are only responsible for half of the payments
d) the lender must first collect from the borrower before you

Explanation:

1. Under the FCBA, the proper first - step when disputing an incorrect bill is to notify the creditor in writing with supporting information to start the dispute process.
2. Using savings to pay for necessities can be a sign of debt problems as it may indicate that regular income is not sufficient to cover basic expenses.
3. The FDCPA is designed to prevent abusive practices by debt collectors, such as harassment and false statements.
4. Cosigning a loan means that the cosigner is legally responsible for the debt if the primary borrower fails to pay.

Answer:

1. b) Notify the creditor in writing with supporting information
2. b) Using savings to pay for necessities
3. c) Abusive practices by debt collectors
4. b) You agree to be responsible if the borrower doesn’t pay