Housing Counselor Certification (HUD) Practice Exam

A client does not receive a written monthly statement from their credit card company. Which credit law could this omission violate?

1. Fair Credit Reporting Act

2. Truth in Lending Act

3. Fair Credit Billing Act

4. Equal Credit Opportunity Act

The correct answer is: Fair Credit Billing Act

The omission of a written monthly statement from a credit card company could violate the Fair Credit Billing Act. This law is designed to protect consumers in matters related to billing practices of credit accounts. Under the Fair Credit Billing Act, creditors are required to provide a monthly statement that outlines the account activity, including charges, payments, and any fees. Failing to provide this statement can lead to confusion regarding outstanding balances and the potential for unfair billing practices. When clients do not receive their statements, they may miss important information regarding payment due dates and amounts, leading to unpaid bills and possibly negatively affecting their credit scores. The Fair Credit Billing Act ensures that consumers have the information necessary to manage their accounts effectively, thereby promoting transparency and accountability in the billing process. This protection is essential for maintaining fair treatment of consumers by credit card issuers.