Consumer Fraud Terms

Annual Percentage Rate (APR) - This term refers to the relationship of the total finance charges associated with a loan and must be disclosed to borrowers by lenders under the Truth in Lending Act.

Penalty APR - A higher interest rate that credit card companies may apply to the cardholders when they have exceeded their credit limit. A penalty APR is often significantly higher than regular APRs, on average about 52% higher.

Credit Limit - Credit limit is the maximum amount of money that a consumer can borrow from the credit card company and is based on credit history.

Grace Period - The grace period is the time when a transaction does not accumulate interest and can range from no grace period days up to as many as 30 days. The average grace period is 23 days.

Transaction Fee - There are additional fees for transactions other than an actual purchase that normally costs a percentage of the transaction.

Pre-Approved - This term is often used by credit card companies but is misleading. Pre-approved does not mean that the consumer is guaranteed to receive the card if they apply, rather it simply means they were chosen to receive the offer because they met a particular criteria.

Cash Advance - Cash advances are immediate cash loans that are given from an individual’s credit card account. They normally have a higher APR than regular purchases and grace periods may not apply.

Balance Transfer - A cardholder can request that the credit card company pay the balance that the cardholder has with another company and that balance will be added to the company with which the request was placed. People sometimes use balance transfers when applying for a new card so that they can make use of a low introductory APR.

Schumer Box, or the Disclosure Chart - The disclosure chart has the most important information but does not usually contain all the important information. There are certain things that the disclosure chart must contain, including:

The actual APR
The formula for the APR
The length of the grace period
The amount of the annual fee, if applicable
The minimum finance charge
Any transaction fees
The method of computing the purchase balance for each billing period
Late payment fees
Over the limit fees

Consumer Fraud Breaking News

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Three Month Breach<...

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"Class Action Suit Settled for $23 Million"

The maker of the popular herbal supplement Airborne has agreed to settle a class action consumer fraud lawsuit for $23 million, according to the nonprofit advocacy group the Cent...

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"Dannon's Claims About Yogurt Are Unsubstantiated"

Dannon Co. is being targeted in a proposed class action lawsuit over claims it misled the public about the health benefits of its “probiotic” yogurts.

Company Boasts Benefits, Charges More

According to the ...

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Consumer Fraud Terms

Consumer Fraud Breaking News

"1,800 Reports of Fraud Related to the Hannaford Bros. Breach"

"Class Action Suit Settled for $23 Million"

"Dannon's Claims About Yogurt Are Unsubstantiated"

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