What Are the Laws Regarding Credit and Debt In Ohio?
October 6th, 2019 by New World Collections
Ohio State Laws on Consumer Debt
Ohio has ample consumer protection laws, which contribute to residents’ overall financial well-being. Some Ohio laws reinforce and reiterate federal laws. Others go much further than nationwide protections, adding to consumer rights within the state.
Statute of Limitations
Ohio’s statute of limitations is six years regardless of the type of debt. The time limit is counted from when a debt became overdue or when a borrower last made a payment, whichever happened more recently. If it’s been more than six years, a creditor cannot sue a debtor for debt collection purposes.
Consumer Sales Practices Act
The Consumer Sales Practices Act of 1972, much like the Federal Trade Commission Act, protects consumers against unfair actions surrounding transactions. The act states that a seller cannot do anything deceptive or unfair in connection with a transaction. For example, a seller cannot imply that the item for sale is of higher quality than it is, and he or she cannot falsely state that the product a customer already owns is in need of repair or replacement.
The act goes on to ban sellers from taking part in unconscionable acts, which are more serious and exploitive.
Acts that would be considered unconscionable include the following:
- Deliberately taking advantage of a buyer’s illiteracy, handicap or language barrier.
- Selling a product for a substantially higher price than the price that similar customers received.
- Allowing a customer to take out a loan that he or she cannot reasonably repay in full.
The overarching state law also outlines regulations for specific types of transactions such as mortgages and deposits, and it lists the standard duties and abilities of the attorney general. These aspects are generally in line with laws in other states and federal regulations.
Credit Card Laws
Ohio has two laws that outline consumers’ rights to privacy in regard to their personal credit cards. These laws are in line with federal laws.
The Credit Card Truncation Act of 1993 makes it illegal for sellers to disclose consumers’ credit card account numbers, Social Security numbers, expiration dates or other key financial information.
The Credit Card Recording Act of 2004 has a similar purpose. It states that sellers cannot print expiration dates of credit cards or more than five digits of a credit card number on receipts.
Credit Services Laws
Ohio has two laws governing the fairness of businesses and nonprofit organizations that offer debt counseling, credit repair and related services.
The Credit Services Organization Act of 2004 requires such companies to register with the state and gives consumers three days to cancel related contracts.
The Debt Adjusters Act of 2004 is similar. It requires these organizations to file annual financial statements and maintain separate bank accounts for their clients. It also caps these businesses’ fees. Initial consultations can cost no more than $75, and companies cannot charge more than $100 annually for consultation fees. Ongoing services such as debt management programs cannot cost more than $30 per month or more than 8.5 percent of a client’s monthly payments to the program, whichever is greater.
Ohio has several other consumer protection laws to help residents hold onto their money and receive fair treatment, including:
- The Credit Freeze Act of 2008 is the state’s version of a nationwide law that allows a consumer to place a freeze on his or her credit reports to protect the consumer after his or her personal information has been stolen or compromised.
- The Gift Card Act of 2006 states that most gift cards must be valid for at least two years from their issue dates.
- The Homebuyer’s Protect Act of 2007, also called the Predatory Lending Law, states that non-bank lenders, mortgage brokers and loan officers cannot take part in abusive lending practices.
- The Home Solicitation Sales Act of 1973 grants customers three days to cancel transactions made outside of the seller’s place of business, such as in the customer’s home.
- The Prepaid Entertainment Contracts Act of 1976 gives customers three days to cancel contracts with dance studios, dating agencies, diet centers, health spas and martial arts schools.
- The Retail Installment Sales Layaway Arrangements Act of 1992 allows customers to cancel layaway agreements. It also requires sellers to notify customers before they default on layaway contracts.
- The Security Breach Notification Act of 2006 requires sellers to notify their customers if there has been a security breach that puts customers at risk for identity theft.
- The Short-Term Lender Law of 2008, or the Payday Lending Law, limits the interest rate on payday loans to 28 percent.
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