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You’ve got financial rights (Let’s get to know ‘em)!

Published Date
Author Maeva Tchang

Feel more confident with finances by knowing your rights.

Welcome back! This is the fourth article in #ReachThoseGoals, meaning you’re in the home stretch of our six-part series about financial well-being. Let’s get right into it, shall we?

As a consumer, you have many rights that are important to know. Understanding your rights can help what may feel like a complex financial world become way more digestible and not so scary. Let’s talk about the rights you have with financial institutions. This applies to any financial stage with these institutions, regardless of whether you are applying for credit, paying down debt or have an account that has gone to collections.

With a financial institution, you have the right to:

  • Apply for a bank account (yes, feels obvious, we know, we know)

  • Refuse a credit check if you’re only opening an account without overdraft protection

Hot tip: banks or credit card companies often request what’s known as a soft credit check to confirm your identity and that’s fine, since it does not impact your credit score

On the flip side, the financial institution has the right to:

  • Require that you provide proper identification

  • Withhold deposits for a set period of time – this can be lifted after you have created a positive history with the bank where your account stays in the positive, and fees, if any, are continuously paid

  • Refuse you a bank account if you have a negative history with them, such as late or missing payments

But how do these rights play out in common financial scenarios? Let’s take a closer look at the 3 important ones:

1 Applying for credit

When applying for credit, you have the right to:

  • Apply for credit, in your name or as a cosigner

  • Reject credit offers or increases to credit limits

  • Access your credit report & credit score for free

Hop tip: Services like Capital One’s Credit Keeper let you keep track of your score for free and with no impact to your credit score.

Your creditor has the right to verify your ID, verify any information you put in your application, including your income, and contact you to verify or request information.

2 Paying down debt

When you’re paying down your debt, you have the right to:

  • Pay extra at any time on most debts – check with your lender about how to do so

  • Contact your lenders when you foresee struggling to make a payment to inquire if other arrangements can be made

Your creditor has the right to send your account to collections if you do not make payments as agreed, and the right to change your interest rate if your contract allows them to do so – this commonly happens if you fall behind on payments. That’s why it’s important to have those healthy financial habits we’ve talked about, and ensure you’re budgeting to stay on track with those payments.

3 Accounts in collections

This is when you fall behind on payments, and your creditor transfers your account to a collection agency. This generally occurs a few months after you’re no longer keeping up with payments, or can happen once you begin missing payments or not paying the full minimum payment.

In this situation you have the right to:

  • Request communications in writing (letter or email) if you have not received anything

  • Offer a payment arrangement – by phone or in writing

  • Refuse to speak to a collection agency more than three times in a week – this includes direct communication as well as voicemails and emailing

  • Receive respectful treatment from collectors

  • Seek free assistance from a nonprofit credit counselling agency

  • File a complaint with your provincial consumer protection office when your rights are violated

In this scenario, the collection agency has the right to:

  • Call you Monday to Saturday 7 a.m.-9 p.m. local time and Sundays 1 p.m.-5 p.m. local time

  • Call the person that guaranteed or cosigned for your debt

  • Call friends or family members but only to obtain your contact information

  • Call your employer to confirm your employment status or regarding a court order

  • Do a credit search on you and report the debt to your credit report

While some of these can feel daunting, knowing your rights will help you be more empowered and in control of these scenarios and interactions. Everything on the financial journey is one step at a time. Know your financial health and limitations, figure out where you want to go, budget accordingly, and know your rights along the way. Regardless of where that is, Capital One is by your side. You’ve got this. Ready for the fifth article?