nazarova_nb_korobova_ev_practice_in_legal_english

2.What are the advantages and disadvantages of using a debit card to pay for purchases?

3.What happens if your EFT card is lost or stolen and you do not notify your bank within two business days after discovering its loss?

4.What are debit cards? How do they work?

5.How can you avoid billing problems?

6.How must you complain about billing errors?

7.Do you have a debit card?

Match the words on the left with the correct definition on the right:

UNIT 23.

Costly Credit Arrangements

Read and translate the text.

Consumers may fall prey to loan sharking. Loan sharks lend money at high, often usurious (illegal) rates of interest. They promise “easy” credit and appeal to people who have problems obtaining and keeping good credit standing.

Usurious loans are illegal under state laws. There are, however, a variety of legal but costly credit arrangements that consumers may want to avoid.

Some creditors call for balloon payments in their agreements.

In such agreements, the last payment is much larger than the monthly payments. This may make it difficult for you to make the final payment. Consumers should carefully consider any agreement that calls for a large final payment. Be sure you can save up enough to make this payment.

Another thing to avoid in financing agreements is the acceleration clause. This clause permits the creditor to accelerate the loan, making all future payments due immediately in the event a consumer misses a single payment. Most auto sales finance agreements have acceleration clauses. If you miss a payment, you

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may suddenly owe the creditor the entire amount of the loan. Many cars are repossessed by lenders for this reason.

You should also beware of bill consolidation. This means combining all your debts into a single one. Lenders sometimes claim you can wipe out all your bills by making easy monthly payment to them, which they will distribute to your creditors. However, the consolidation loan may require payments over a longer period of time and at a higher rate of interest. Some lenders also charge a substantial fee for these loans. They may subtract the fee from your monthly payment to them before paying off your creditors, so you wind up falling deeper in debt.

Truth in Lending. To prevent credit abuses, Congress passed the Truth in Lending Act. This law requires creditors to give you certain basic information about the cost of buying on credit. The creditor must tell you – in writing and before you sign a contract – the finance charge and the annual percentage rate. The finance charge is the total amount you pay to use the credit, including interest charges and any other fees. The APR is the percentage cost of credit on a yearly basis.

The law requires creditors to give you special information about variable–rate loans if you are being offered this plan. Remember that with these plans, your payments may increase over time.

The law also requires that consumers be given a copy of the disclosure form containing the credit information. They must also be told the rules and charges for any late payments. Violators can be subject to both civil and criminal penalties, and consumers who sue creditors under this act may recover damages, court costs, and attorney’s fees.

Using Credit

Credit costs money. Don’t buy things you don’t need or want.

Resist high–pressure safes techniques.

Determine how much debt you can handle.

Comparison shop for credit. If you are suspicious about a lender, check to see if the lender is licensed and whether complaints have been filed.

Before making a credit purchase, read and understand the entire contract. Don’t sign contracts with blank spaces.

If a contract calls for a large final payment, be sure you can afford it.

Once you’ve signed a credit agreement, keep a copy in a safe place. Keep receipts for each payment.

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Problem–solving:

The Hidden Charges

Chang buys a new guitar amplifier on an installment plan. When he receives the itemized bill, he discovers that he owes a total of $745,’ though the price of the amp was only $553. He calls the music store and is told that he is paying more than 20 percent interest. He would never have bought the amp if he’d known it would cost this much. What mistakes did Chang make? What can he do now?

UNIT 24.

What Lenders Want to Know Before Extending Credit

Read and translate the texts.

Any store, bank, or credit card company that extends credit to consumers wants to know that the money will be repaid. Before making a loan, the creditor will want to know several things about the consumer:

Is the consumer a reliable person? (For example, a person who moves or changes jobs frequently might not be considered reliable.)

Does the consumer have a steady income that is likely to continue into the future?

Is the consumer’s income high enough to enable him or her to pay for the items to be purchased?

Does the consumer have a good record in paying off other loans and bills?

Creditors are in business to make money; thus, it is understandable that they would ask questions such as these. However, creditors have sometimes unfairly denied credit for reasons such as the debtor’s race, sex, or source of income (such as public assistance or alimony). Today a federal law, the Equal Credit Opportunity Act, protects consumers against credit discrimination based on sex, marital status, race, color, religion, national origin, old age, or source of income. The Federal Trade Commission handles credit discrimination complaints against finance companies, retail stores, oil companies, and travel and entertainment credit card

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companies. Bank regulatory agencies, such as the Federal Reserve Board and the Comptroller of the Currency, handle complaints against banks and bank credit cards. If you think you have been discriminated against, you may complain to one of these agencies or sue the creditor in court.

Many states also have laws that forbid credit discrimination. Complaints should be directed to the state or local consumer affairs office or human rights commission.

What to Do If You Are Denied Credit

If you ever apply for credit, the creditor will evaluate your application according to certain standards. The creditor may investigate you personally or may pay a credit bureau to check your credit word. Many creditors do both. There are thousands of credit bureaus across the country. Financial and personal information about consumers is often stored in computers and may be passed among the various bureaus. Information about you in a credit bureau’s files can be a key factor in determining whether you get loans, credit cards, or other forms of credit in the future.

If a credit report indicates that you are a poor risk, the creditor will probably deny credit. Also, if you are trying to get credit for the first time and have no credit record at all, the creditor may deny credit. Sometimes creditors decide to deny credit based solely on information in the application, without taking the time to order a credit report.

The Equal Credit Opportunity Act says that creditors must tell consumers why they were turned down. The reasons given must be specific. For example, “applicant does not meet our standards” is not specific enough. On the other hand, “insufficient income” is a specific reason. It tells you how your circumstances must change to qualify for credit.

Another federal law protests you from inaccurate credit bureau reporting. The Fair Credit Reporting Act requires creditors who deny credit based on information received from a credit bureau to tell you that fact. The creditor must also give you the name and address of the credit bureau that supplied the report.

Every consumer has the rights to learn the nature of information in his or her credit file. Although credit bureau are not required to show consumers copies of the actual file, they must disclose the nature and substance of the information it contains.

If you discover false, misleading, incomplete, irrelevant, or out– of–date information in your file, you can require the credit bureau to recheck its information and correct the errors. If the credit bureau does

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not cooperate in correcting your credit file, you may complain to reinvestigating the information the bureau still believes that it is correct, you have the right to have your version of the dispute inserted in the file. If the information being reported about you is accurate, the credit bureau can report it for seven years.

Find the equivalents of the following words and expressions in the text.

Надежный человек; иметь постоянный доход; несправедливый отказ в кредите; алименты; cоциальная помощь; дискриминация при получении кредита; семейное положение; источник дохода; магазин торгующий в розницу; контролер денежного обращения; федеральное резервное обращение; комиссия по правам человека; оценить заявку на кредит в соответствии с определенными стандартами; базироваться только на информации в заявлении; недостаточный доход; получить право на кредит; картотека кредитной информации; отдел кредитов; устарелая информация; перепроверить информацию и исправить ошибки.

Answer the questions:

1.What do lenders usually want to know before extending credit? Why do they want to know all these points?

2.What reasons can be for unfairly denied credit?

3.Who handles credit discrimination complaints?

4.How do creditors evaluate applications?

5.What do credit bureaus do?

6.Why can the creditor deny credit if you are trying to get it for the first time?

7.What does the Equal Credit Opportunity Act say?

8.What does the Fair Credit Reporting Act require creditors to do?

9.What can you require if you discover false, misleading, incomplete, irrelevant, or out–of–date information in your credit file?

Match the words on the left with the correct definition on the right:

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Problem–solving:

You are a loan officer at a local bank. Each of the following people is seeking a loan. Based on the information provided, evaluate each applicant and make a decision regarding each loan request. Discuss your reasons for granting or denying credit.

a.Alice Johnson is the mother of four children. Her only income consists of public assistance payments of $420 per month and $80 per month from the pension other deceased husband. She wishes to buy a new oven and refrigerator totalling $700. She lives in a public housing development. Her rent and other expenses usually total about $375 a month.

b.Jerry Levitt is a carpenter seeking work wherever he can find it. Depending on the weather and other factors, he is subject to seasonal unemployment. He currently brings home about $650 per month and has car payments of $150 a month, TV payments of $105 a month, rent of $220 a month, and no money in the bank. He would like to borrow $2,500 to buy a motorcycle.

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с. Barbara Griego, 22, is in her second year of college. She has excellent grades and plans to attend medical school after graduation. Until recently, her parents paid her bills, but she is now on her own. She is seeking $2,000 for her college tuition and expenses. She has never borrowed money before, but she plans to repay all loans after finishing medical school.

UNIT 25.

Default And Collection Practices

Read and translate the texts.

Consumers who use credit sometimes have difficulty making all their payments. Problems can arise because the consumer is overextended or too deeply in debt. Problems can also arise because of unexpected unemployment, family illness, or a variety of other reasons.

A consumer who is unable or unwilling to pay a debt goes into

default.

What a Consumer Can Do in Case of Default

If you have problems paying your bills, you should consider the following options:

1.Reassess your financial lifestyle to determine where the problem arose. If you are not already on a budget, consider starting one.

2.Notify each creditor of the problem and ask to have the term of debt extended (leading to smaller monthly payments) or to have the amount of the debt reduced or refinanced. Keep in mind that refinancing over a longer period usually results in increased finance charges.

3.Contact a consumer credit counseling service or a family service agency that offers free or low–cost financial counseling

4.Seek assistance from friends or relatives to reduce the debt to a manageable level.

Bankruptcy If these steps do not resolve your problem, you may have to declare bankruptcy. This is a procedure through which a person places assets under the control of a federal court in order to be relieved of debt. In recent years, an enormous number of bankruptcies have been filed in the United States. In 1991–1992, more than 70% of the civil cases filed in federal court were bankruptcies.

Under Chapter 13 of the federal bankruptcy law, a wage earner can make an arrangement, supervised by a federal court, to pay off some or all of what is owed to creditors over an extended period of

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time. A more severe form of bankruptcy is called a Chapter 7 bankruptcy. Under Chapter 7, the federal court takes control of most of the debtor’s assets (some states allow the debtor to keep certain items), sells them, and pays off as much debt as possible. Generally, the money received from the sale of the assets is not enough to fully pay all creditors.

A declaration of bankruptcy has serious long–term consequences for the debtor. Records of personal bankruptcy remain in credit reports for 10 years. Even after that time, it may be very difficult to obtain credit or borrow money. In addition, some debts are not wiped out through bankruptcy. Taxes, alimony, child support, and student loans must still be repaid.

Find the equivalents of the following words and expressions in the text.

Неожиданная потеря работы; объявлять дефолт; пересмотреть; составлять финансовую смету; продлить срок выплаты долга; объявить банкротство; поместить имущество под контроль федерального суда; огромное количество; долгосрочные последствия.

Answer the questions:

1.Why do consumers who use credit sometimes have difficulty making all their payments?

2.What steps should be taken by a consumer who is unable to pay his bills?

3.What is default?

4.What is bankruptcy? How does the procedure work?

5.What consequences does a declaration of bankruptcy have– term for the debtor?

6.Are there any laws in Russia concerning default and bankruptcy?

Match the words on the left with the correct definition on the right:

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Read and translate the texts.

Creditors have many ways of collecting money from consumers who are unwilling or unable to pay their debts. It is understandable that creditors will take action to recover money or property owed them. However, in the past, some bill collectors engaged in unsavory practices. As a result, some debtors suffered family problems, lost their jobs, and had their privacy invaded.

These practices prompted Congress to pass the Fair Debt Collection Practices Act in 1978. This act protects consumers from abusive and unfair collection practices by professional debt collectors. It does not apply to creditors collecting their own bills.

Under the act, the debt collector’s communications are limited to reasonable times and places. False or misleading statements as well as acts of harassment or abuse are strictly prohibited.

Calls and Letters. If you receive unreasonable or harassing phone calls or letters from a debt collector, you should report the collection practice to the Federal Trade Commission or to your local consumer protection agency. Under federal law, you can send bill collectors a notice demanding that all collection contacts cease. You might still owe the money, but the collection contacts would have to stop. You should also consider contacting the phone company, which has the power to remove telephones from anyone using them for harassment.

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