You don’t know these consumer laws, but you probably should

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By Christopher Elliott

It might be a stretch to say that American consumers are legally illiterate. After all, don’t we watch Law & Order?

In fact, one recent survey found that 10 percent of U.S. college graduates believed Judge Judy was on the Supreme Court. (In our political climate, I suppose anything is possible.)

Sometimes it is relatively easy to fix your own consumer problems. But when it comes to federal consumer laws, there is real ignorance. Day after day, I see consumers banging their heads against the wall, dealing with lies people tell them. They know what’s happening to them is wrong, that there ought to be a law. Unfortunately they don’t know enough about the law to invoke it.

So which laws should you know about? I asked a few experts, and here’s what they told me:

The Electronic Funds Transfers Act (EFTA)

“It’s not well known and not often utilized by consumers,” says Larry Smith, a consumer rights attorney at SmithMarco, a Chicago law firm. The EFTA governs financial institutions and banks when allowing money to be transferred by computer terminal. “Banks are required to provide certain disclosures to their customers,” he explains. “If there are errors that occur regarding a transfer, there are investigation requirements and other mandates regarding the re-funding of an account and the charging of interest on disputed transfers.” In other words, if you made a purchase and it involved an electronic transfer of money, chances are the EFTA protects you.

The Real Estate Settlement Procedures Act (RESPA)

“This is the most important federal statute and regulation regarding the servicing of mortgage loans,” says Josh Denbeaux, a financial consumer rights attorney. The federal statute governs the performance and enforcement of the loan. “There are many times that mortgage servicers and lenders make mistakes in their servicing of the mortgage loan,” he adds. “Consumers have rights under RESPA. All would be well-served to read the CFPB website for its explanation of consumer rights under the statute.”

The California Online Privacy Protection Act (CalOPPA)

Although this is technically not a federal law, it has national implications, explains Zachary Paruch, a small business expert at Termly. A site that helps you generate terms and conditions for your online business. CalOPPA stipulates that any online service which is based in California, or collects personal information from residents in California, is required to conspicuously post a privacy policy. “This means that if an online business is located in, or can be accessed by anyone in California. It’s subject to this regulation,” he says. If your business doesn’t disclose, it could be in violation of the law. It could work in your favor if you’re trying to build a case.

The Fiduciary Rule

The rule, which is part of the Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry. This is to provide protection for individuals in these plans. But it contains a provision that sets important standards for your financial advisor. “It’s important that Americans who are saving for retirement are aware of the fiduciary rule,” says Jay Shah, CEO of Personal Capital. The problem? The rule is changing, even as I write it, and the word “fiduciary” isn’t in everyone’s vocabulary.

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“But what it means is very simple,” adds Shah. “It says that your financial advisor should be required to act in your best interest. Unfortunately they act more on their own, especially when advising on retirement investment accounts. It should be called the ‘no conflict of interest rule.’” How misunderstood is the rule? Well, a few weeks ago, when I wrote about the fiduciary, I suggested the Trump administration had rescinded parts of it. Turns out the truth is a lot more complicated.

This is by no means a complete list of essential consumer laws, but it’s a start. Knowing about these laws will help you use them correctly the next time you have money to invest, buy a house, or purchase something online. And if a business won’t listen, then you can have your day in court.

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Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on X, Facebook, and LinkedIn, or sign up for his daily newsletter. He is based in Panamá City.

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