31 Dec Definition Of Adverse Action
What does the term Adverse Action mean?
The Fair Debt Collection Practices Act (FDCA) and the Equal Credit Opportunity Act (ECOA) use the same definition for Adverse Action.
Adverse Action includes any of the following:
- The refusal to grant credit in substantially the amount or on substantially the terms requested;
- Termination of credit or an unfavorable change in the terms for extending credit;
- The refusal to increase the amount of credit when application is made for an increase.
If adverse action is taken by a creditor, the creditor is then required to notify the consumer of the nature of the adverse action, and the creditor is also required to provide the consumer with the name of the credit reporting agency that provided the information used in coming to the adverse action.
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