Wisconsin Consumer Act Frequently Asked Questions
Business Guidance - Registration
- Who Must File?
- How do I get a Registration Forms?
- Are there Penalties for Noncompliance?
- Definition of a Consumer Credit Transaction?
- Can I ask the DFI to Review my Forms?
- Amending forms?
- How Do I Submit forms?
- What are the Fees for Forms Review?
- What Happens when I Apply for Credit?
- What are my Cancellation Rights?
- What are my Rights Regarding Collection Practices?
- What is Credit?
- Who are the Three Main Credit Bureaus?
- How do I Choose a Credit Card?
- How do I Read a Credit Card Solicitation?
- How do I find General Tips Regarding Credit Card Use?
- What are Credit Counseling Services, also known as Adjustment Service Companies?
- What are my Rights if I'm Denied Credit?
- What is Credit Insurance?
- How do I Address Credit Problems?
- How do I Watch for Credit Repair Scams?
- What is a Credit Report?
- Can I view a Sample Credit Report?
- How do I Dispute Information on my Credit Report?
- How do I get a Copy of my Credit Report?
- What is a Debit Card (Check Card and ATM Card)?
- How do I Dispute a Debt?
- How will Divorce Affect my Credit?
- What is the Equal Credit Opportunity Act?
- What is the Fair Credit Reporting Act?
- What Help is Available if I am a Victim of Identity Theft?
- What Steps can I take to Prevent Identity Theft?
- What Should I know about Leasing a Motor Vehicle?
- What is an Advanced Fee Scam?
- What are Payday Loans?
- How do I Reduce the Amount of Junk Mail I Receive?
- What is a Rent-to-Own Agreement?
- What is the Rule of 78's?
- What is a Secured Credit Card?
- How do Skip Payments Offers Work?
- How do I Avoid becoming a Victim of Telemarketing Fraud?
- What Happens if I Write a Worthless Check?
Business Guidance - Registration
Who Must File?
Any business that makes, purchases or solicits consumer
credit transactions or directly collects payments from, or enforces
rights against, customers arising from such transactions, wherever made,
is subject to the registration filing statutes set forth at
sec. 426.201, Wis. Stats. (PDF: external
link). You must file a registration and submit a $25 fee within 30
days of commencing business in Wisconsin. Future filing is required annually
only if your outstanding balance of all consumer credit transactions as
of December 31 is over $250,000. Businesses solely honoring credit cards
issued by a third party not related to the business are not required to
file. Annual registrations are due each February 28 for the previous
How Do I get a Registration Forms?
Forms are available on the forms page. After you have filed once we will mail you a registration form every January, if applicable.
Penalties for Noncompliance?
Failure to comply with the registration requirements under sec. 426.201, Wis. Stats. (PDF: external link) or failure to pay a fee required under sec. 426.202, Wis. Stats. (PDF: external link) will subject a person to a forfeiture of not more than $50 for each day of noncompliance.
Definition of a Consumer Credit Transaction?
Generally, a consumer credit transaction is any loan, lease or sale under $25,000 primarily made for a personal, family or household purpose on which a finance charge is or may be assessed, or is payable in more than four installments. For a complete definition and exclusions from the definition, see Chapter 421, Wis. Stats.
Some examples include:
- consumer and student loans
- single-pay notes, where interest is assessed;
- any accounts receivable where there is a balance at the end of the month;
- second mortgages if the institution holding the second mortgage does not hold the first mortgage;
- checking account overdraft protection programs.
Examples of transactions that are not consumer credit transactions under the Wisconsin Consumer Act:
- first mortgages.
- the extension of credit to businesses, including transactions primarily for an agricultural purpose.
- transactions, including those to consumers, in which the amount financed exceeds $25,000.
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Business Guidance - Forms
Can I ask the DFI to Review my Forms?
All consumer credit transactions made in this state are subject to the Wisconsin Consumer Act ("WCA"). Acts, practices, procedures and forms used in conjunction with these transactions must comply with the provisions of the Wisconsin Consumer Act, Chapters 421-427 and 429 of the Wisconsin Statutes and Wisconsins Marital Property Law.
Unless otherwise instructed by a licensing or registration authority, those who engage in consumer credit transactions in Wisconsin are not required to submit acts, practices, procedures or forms to DFI for review.
Those who choose to have the agency review their acts, practices, procedures or forms must follow the instructions, found at sec. 426.104(4)(ab), Wis. Stats. (PDF: external link) and sec. DFI-WCA 1.82, Wis. Adm. Code (PDF: external link)
Every resubmission of a previously reviewed form must denote all changes
from the prior form by underlining or highlighting the changes on the
How Do I Submit Forms?
You may submit a form by mail or by e-mail. When using e-mail send the attached form saved as a Microsoft Word document or Adobe Acrobat file to email@example.com. To request an interpretation regarding an act, practice or procedure, you may submit it in an e-mail to firstname.lastname@example.org If the request is not sent electronically, three copies of the form must be submitted to the following address:Department of Financial Institutions
Bureau of Consumer Affairs
201 W Washington Ave, Suite 500
PO Box 8041
Madison WI 53708-8041
If the form is submitted electronically, it is not necessary to include three copies.
What are the Fees for Forms Review?
If the creditor intending to use the act, practice, procedure or form is not registered under the Wisconsin Consumer Act, a $100 per hour fee may be assessed prior to reviewing the act, practice, procedure or form. We will estimate the time it will take to review the forms. If the actual time it takes is less than the estimate, the overpayment will be refunded. If it takes longer than estimated, you will not be charged an additional fee.
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When you apply for a credit card, personal loan or any other type of credit, the lender must first decide if you are a good credit risk. Creditors do this by checking your background to see how youve paid debts in the past. They check not only your credit history, but also how youve paid back non-credit debts, such as rent and medical bills. Many different types of merchants report to credit bureaus and rate the account to reflect your repayment practices. Obviously, a poor repayment history will not fare well with a lender who is considering your application for an extension of credit.
Most lenders use a scoring system to determine whether an applicant is a good credit risk. Applicants receive points for items such as occupation, length of employment and annual income. Applicants also receive points for the number of previous or current creditors who have highly rated their credit payment history. The higher the score, the better credit risk the applicant is considered.
If you are deep in debt and are applying for more credit, the creditor may consider you to be over-extended and can deny your application. Your income-to-debt ratio would be the basis for their rejection because they believe you may not be able to handle additional payments based on your income and existing obligations.
If you have applied with several creditors within a short time, each may have accessed your credit report and their inquiries are recorded in your file. Some creditors automatically reject an application if the credit report shows an excessive number of inquiries. They have found that good credit risks usually do not have many credit inquiries. A record of inquiries will remain on your credit report for as long as two years, and may impair your ability to obtain credit for that period of time.
If you have committed yourself to relatively few creditors and have maintained
a high credit rating, lenders may look to how long your credit commitments
with those creditors will continue. If you are near the end of your current
commitments, the lender may consider extending credit to you because your
income-to-debt ratio will even itself out at the maturity of your current
Wisconsin law allows consumers to cancel certain transactions within three days, but only if the contract is signed away from the sellers normal place of business. For example, if a salesperson came to your home and sold you a vacuum cleaner, you would have three business days to cancel. However, if you purchased a vacuum cleaner on credit at an appliance store, the three day right to cancel would not apply.
This provision applies to transactions valued in excess of $25.00 where the transaction was initiated by face-to-face solicitation away from the merchants regular place of business, or where the transaction is directed to the particular customer via mail or telephone solicitation. The right to cancel law covers transactions at fairs and trade shows as well.
§423.203 of the Wisconsin Consumer Act requires that the merchant give the customer two copies of a written notice setting forth the customers rights. The notice looks like this:
CUSTOMERS RIGHT TO CANCEL
You may cancel this agreement by mailing a written notice to (insert name and mailing address of seller) before midnight of the third business day after you signed this agreement. If you wish, you may use this page as that notice by writing "I hereby cancel" and adding your name and address. A duplicate of this page is provided by the seller for your records.
Cancellation under this law must be in writing. The customer may send a letter, telegram or other writing indicating the desire to cancel. Usually, the customer can use one of the two copies of the notice of right to cancel by writing on it "I hereby cancel this contract" and mailing it to the seller. The notice must be mailed to the seller by midnight of the third business day following the transaction.
Within ten (10) days the seller must refund all payments made by the
customer and cancel any contract signed by the customer. The customer
is not liable for any finance or other charges and the transaction is
void. Within twenty (20) days the seller must return any property traded-in
by the customer. If the seller has delivered any property to the customer,
the customer may keep it until the seller has returned all down payments
and/or property to the customer. At that time the customer must make the
property available to the seller. If the property is not picked-up within
20 days after the customer has made it available, the customer is entitled
to keep the property without any obligation to pay for it.
Being contacted by someone who wants to collect a debt can be upsetting. This brochure explains some of your rights and responsibilities under the law and answers some frequently asked questions about Debt Collection
Buy now, pay later! Nothing down, 24 monthly payments! Low, low 9.9 percent APR!
We are constantly urged to accept credit card offers or purchase items on credit. But what is credit? Credit allows customers to purchase something immediately and pay for it later. The money is borrowed from creditors and the customer can pay the creditor over time, rather than paying at the time of purchase.
There are two basic types of consumer credit transactions: open-end and closed-end.
An open-end credit account is one under which you can make repeated purchases or obtain money. You can either pay the balance in full or in installments. For example, if you purchased a new air conditioner with a credit card, that purchase is part of an open-end credit plan. You could use the same card at a later date to purchase something different and not have to enter into a new agreement with the creditor. You also would not have to make a preset number of payments to payoff the balance.
Other open-end credit examples include: gas cards, credit cards like MasterCard and Visa, checking account overdraft protection programs, and revolving charge accounts. There is no limit on the interest rate that businesses can charge for open-end credit.
Closed-end credit is credit extended for a specific amount and a set time period. For example, if you purchased the same air conditioner as above under a closed-end agreement, you would have to make a certain payment for a set number of weeks or months.
Other examples of closed-end credit include: auto loans, mortgages, and
personal or home improvement loans. In Wisconsin, closed-end credit agreements
also have no rate limits.
There are three main credit bureaus servicing the United States: Trans Union, Equifax and Experian. Each bureau covers a primary region of the country and Trans Union is the bureau servicing the Midwest. This means many of the credit report requests made on you will be done through Trans Union. However some companies use one or more of the other bureaus. So its very important to contact each bureau if you find an error to ensure your report is accurate and up to date. To contact a credit bureau:
Trans Union Corp
Consumer Disclosure Center
PO Box 1000
Chester PA 19022
Trans Union Fraud Assistance Center
PO Box 6790
Fullerton CA 92834
PO Box 2002
Allen TX 75013
Experian Fraud Department
PO Box 1017
Allen TX 75002
PO Box 740241
Atlanta GA 30374-0241
Equifax Fraud Assistance Center
PO Box 740256
Atlanta GA 30374
There are several factors to weigh when considering a credit card offer. Issues such as interest rate, annual fee and grace periods are important factors, and each should be considered based on how you plan to use the card.
Interest rateIf you plan to keep a high balance, shop for the card with the lowest rate. As a tradeoff you may have to pay a higher annual fee. Keep in mind that credit card issuers may change their interest rate at any time. They only must notify you in writing of their intentions to do so.
Always check if a low rate is part of an introductory offer. If so, issuers may raise the rates considerably after the introductory period.
Some cards use a variable rate system. With these cards your interest rate can change from month to month with no notice.
Annual feeIf you pay your balance every month, look for a plan with a low or no annual fee. In this case, the interest rate is not a factor because your account wont accrue interest.
Grace periodWhile many credit cards give you 25 days to pay any new balance without incurring interest, some do not. This means you will be charged interest from the moment of purchase.
There are many other factors involved in choosing a credit card. Some
cards offer annual cash back programs, free insurance on rental vehicles,
or some other incentive for you to use their card. Examine the offer carefully
and choose the program tailored most to your needs.
Credit Card Solicitations (PDF: 31 KB, 6 pages).
- Record the names, account numbers and addresses of card companies and keep that information in a safe place.
- Never give out your card number or Social Security number to any solicitor.
- To destroy a card, cut it vertically through the account number and advise your financial institution in writing that the card is no longer wanted.
- Sign cards, and destroy expired cards.
- Treat cards as if they were cash. Do not carry unnecessary cards.
- Never leave cards, or card receipts (which often have the card number on them) in cars.
- At home, keep cards out of sight.
- Make sure after each purchase the card is returned, and make sure it is the right card.
- Never lend a card to a friend.
- Keep a copy of drafts and check them against monthly statements.
- If requested, provide a merchant with identification.
- Contact your financial institution immediately if you notice fraudulent activity on bills.
- Always notify your financial institution immediately if a card is lost or stolen. Also, call the police and request a case number, which should then be provided to the financial institution.
- Possibly the greatest sources of credit cards, checks and other negotiable
items to fraud artists are mailboxes. Consider a locking device for
Yes, see our information on credit counseling and a list of adjustment service companies is available from that page.
The Equal Credit Opportunity Act (ECOA) ensures that all consumers will be given an equal chance to receive credit. The ECOA states that it is illegal to discriminate against applicants on the basis of:
- Marital status
- National origin
- Because they receive public assistance income
This doesnt mean that all consumers who apply for credit will get it. Creditors may still use factors such as income, expense, debts and credit history to evaluate applicants, but they cannot discourage anyone from applying for credit.
Under the ECOA, you have the right:
- To know whether your credit application has been accepted or denied within 30 days of filing it.
- To know the reasons for a rejected application. The creditor must either give you the specific reasons for the rejection or tell you of your right to learn the reason if you ask them within 60 days. Acceptable reasons are: "your income is too low" or "you havent been employed long enough." Unacceptable reasons are: "you didnt meet our minimum standards" or "you didnt receive enough points on our credit scoring system." Indefinite or vague reasons are illegal.
- To receive a specific explanation of why you were offered less favorable terms than you applied for, such as higher finance charges or less money than you requested. However, this does not apply if you accept the less favorable terms by signing a contract.
- To have credit in your birth name, your first name and your spouses last name, or your first name and a combined or hyphenated last name. Make sure, however, that the name on your credit report is consistent with the name under which you apply for credit.
- To keep your own accounts after you change your name, marital status, reach a certain age, or retire unless the creditor has evidence that you are unwilling or unable to repay.
- To get credit without a co-signer if you personally meet credit worthiness standards and to have a co-signer other than your spouse, if one is necessary.
- To receive an explanation as to why your account was closed or why the terms of your account were changed. Wisconsin law requires a creditor to notify the customer of adverse changes to a consumer account in writing not less than 90 days before the terms of the account will change.
Sometimes, because of sickness, job loss or other reasons, people become overwhelmed by bills. This is not the time to ignore the problem and hope it goes away. First, contact creditors in writing and advise them of your situation. While they are not obligated to give you extra time to pay your bills, they may be willing to consider alternative payment plans. Then assess your options:
Credit counseling serviceThese organizations are beneficial if you need help getting your finances in order, setting up a budget, or arranging to pay accounts. They are often available at low cost. Contact DFI to see if the organization is properly licensed in Wisconsin.
BankruptcyThis should only be considered after consulting with an attorney, as this will appear on your credit report for 10 years. There are two basic types of bankruptcy: Chapter 13 and Chapter 7. Chapter 13 allows a debtor to pay off creditors over 3-5 years. In this case debtors wont lose any property or possessions. Chapter 7 involves the liquidation of all your assets, except those exempt by law, to pay your debts.
Although bankruptcy will clear most of your debts, it may not eliminate spousal and child support payments, some student loans, taxes or fines.
Credit Counseling Services
See our information on credit counseling and a list of adjustment service companies is available from that page..
Re-establishing a good credit rating is not easy, but with hard work and perseverance it can be done. The best way to start is to establish a checking and savings account with your local financial institution. Often a smaller community bank, savings and loan or credit union will be more able to help you because their lending policies may be more flexible. Make sure to regularly deposit money into both accounts and never overdraw on either. Build a good relationship and a solid account history with them. You can then sit down with them and discuss your situation. Be honest regarding your past, but also highlight the effort you have put forth on your accounts with them. They may be willing to grant you a loan. You have then taken the first step to regaining good credit.
Although this method takes time, it is the best way for people to rebuild
damaged credit. There is no quick way to fix credit, so be careful about
responding to organizations who claim to be able to fix your credit overnight,
or ask you to pay a fee for assisting you in obtaining credit. It doesnt
work that way.
In this type of scam, a company requests an up-front fee for which the company promises to "repair" the customer's credit report. However, there is little, if anything, such a business can do to "repair" a customer's poor credit track record. And by law, anyone may request a copy of their own credit report for a nominal fee which is usually far less than what these firms charge. Further, if someone has actually been denied credit, they are entitled to a free copy of their personal credit report. Credit Repair Ads
Be wary of advertisements that say "Erase Bad Credit! 100% Guaranteed!"
Or "remove bankruptcy and liens from your credit file." There
are no quick or easy cures for a poor credit history based upon accurate
information. See credit
report and credit
problems for more information.
Sample Report. (PDF: 12 KB / 3 pages).
Disputing a Debt
If a collection agency contacts you regarding a debt (or a portion of a debt) that you dont believe you owe, there are specific things you must do to document the dispute.
First, write the collection agency within 30 days of receiving the first notice, informing them that you dispute the debt and why. Make sure your letter is dated, properly addressed and shows the account number shown on the notice. It is also vital that you keep a copy of all correspondence for your records.
Upon receiving your letter, the collection agency must halt collection activity until a copy of a debt verification is sent to you. A verification may include a signed agreement, a copy of a judgment against you regarding the debt or an itemized statement of services rendered under your name (or the name of a dependent or spouse). It can also be as simple as a copy of the last bill the creditor sent you.
The collection agency cannot report the disputed debt to a credit bureau without also reporting that it is being disputed. However, if the collection agency reports the debt to a credit bureau before you dispute it, they are not obligated to update the credit bureau report.
If the debt cannot be verified by the creditor, the collection agency must cease collection activity on the account. If the collection agency continues to contact you regarding the debt, you should notify our office.
If verification is obtained from the creditor, the collection agency must mail a copy of the verification to you. It may then continue its efforts to collect the debt.
A legitimate debt should never be disputed merely to postpone repayment. In doing so you risk losing any leniency the creditor or collection agency may have granted you in paying back your debt.
I owe a company money. Cash is tight, but as long as I give them anything, even a dollar a month, they cant do anything to me, right?
Wrong. If you default on a debt the creditor or collection agency has
the right to demand full payment on the balance of the debt. If you refuse
or cannot afford to pay, legal action can be taken against you.
If you have gone throughor are consideringa divorce, take a close look at the issues involving your credit. Pay attention to the status of your credit accounts. If you maintained joint accounts during your marriage, it is important to continue to pay the regular required payments. As long as there is an outstanding balance on your joint account, both you and your spouse are responsible for payment. Generally, any debt incurred by your spouse is also your responsibility, regardless of whose name is on the account.
If you are contemplating separation or divorce, you may wish to contact your creditors in writing to ask that they close your joint accounts (or accounts where your spouse is an authorized user). The creditor cannot close a joint account because of a change in marital status, but they may close a joint account at either spouses written request. The creditor does not have to change a joint account to an individual account, and may ask you to reapply for a credit account as an individual and then, on the basis of your application, extend or deny you credit.
You may wish to contact an attorney regarding these issues to ensure everything is done properly.
Jill and Bob were recently divorced. The court decree stated Bob would pay the balances on their joint credit card accounts. For whatever reason, Bob did not pay on the accounts and the creditors began contacting Jill for payment. Jill told the creditors that the court had ordered her ex-spouse pay the debts, and she insisted they contact Bob.
The creditors told Jill that the agreement they entered into with the couple obligated both Jill and Bob to repay. They also told Jill that they were not a party to the court decree agreement, and therefore do not have to attempt to collect only from Bob and that she was still legally obligated to repay the debt.
The creditors statement is accurate.
Because a valid contract binds the parties who sign, it does not matter if one of the parties chooses not to repay or a divorce decree stipulates that one party must pay. The contract is still binding regardless of a divorce decree. Either party can be contacted for repayment, and both parties credit history can be affected by the debt. Either or both parties may be sued for repayment of the debt, and either or both parties wages may be garnished after a judgment is obtained.
If one spouse ignores a court order to pay a certain debt or debts, it is the responsibility of the other spouse to inform the court that the court order is being ignored. The court may take further action against the party for noncompliance of the court order.
Can my credit history before marriage be reported on my spouses credit history?
No. Only obligations that arose during you and your spouses marriage can be reported on both credit histories.
Can a debt that the court ordered my ex-spouse to pay be reported on my credit history?
Yes. As explained above, the creditor can hold you responsible for repayment
of a debt incurred while you were legally married or jointly signed a
contract, regardless of any court order. The presence of a poor payment
history on the part of either spouse while married can impair either spouses
ability to obtain individual credit, even after a divorce.
Credit Opportunity Act (ECOA) ensures that all consumers will be given
an equal chance to receive credit.
The Fair Credit Reporting Act (FCRA) governs the activities of credit bureaus and creditors. Among other things, the FCRA requires:
- Creditors to furnish accurate and complete information regarding your credit history.
- Credit bureaus to investigate if you dispute an entry on your credit report. If your claim is valid, your report must be corrected.
- That only people with a legitimate business purpose can obtain a copy of your credit report.
If you suspect a credit bureau is not complying with any of these laws,
complain directly to the credit bureau. They may correct the problem.
If not, contact the Federal
Trade Commission. While they can not always resolve individual complaints,
they do use consumers complaints and inquiries to decide which companies
to investigate for violations.
Identity Theft: What Help is Available. ((PDF: 65 KB / 1 page)
Steps to prevent Identity Theft. ((PDF: 64 KB / 2 pages)
Loan scam rackets can bring in millions nationwide in a very short time. Unsuspecting people send in a fee in return for a promised loan. Because interested individuals are often in debt trouble, the loss of the fee through this fraud is especially devastating.
Typically, advertisers place a three to four line in-column classified or late night broadcast ad offering personal or debt consolidation loans. Amounts of potential loans are often included. Rarely is a company name or street address location given, but there is either a toll-free or a 900 toll number provided.
When a citizen does call, a minimal amount of information is asked for. Then, a so-called "approval call-back" is made to the consumer. Virtually everyone is "approved". Telephone operators are trained to say they are not the actual lender. They claim instead to have located a lender who will work with the borrower. The citizen is then asked to send a fee, often by overnight mail, or by courier to avoid federal mail fraud prosecution. They are also asked to send other information such as a copy of their driver's license, copy of their last pay stub, copy of their social security card, etc.
If pressed, such firms often say they are licensed (even if they are not). They may have a legitimate sounding answer to almost any question.
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See the Wisconsin Guide to Payday Loans.
Merchants, such as credit card companies, commonly purchase pre-screened lists of consumers from credit bureaus. These lists are used by merchants for marketing purposes. This practice of purchasing lists is permitted only if the list is used by the merchant to extend a firm offer of credit or insurance. The pre-screened lists sold by credit bureaus can only contain very limited information, such as the name and address of the consumer, and other general information.
Consumers have the right to keep their names off of these pre-screened lists. To exercise this so-called "opt-out" right, call 888-567-8688, which is jointly operated by the three major credit bureaus, Trans Union Corp, Equifax, and Experian (formerly TRW).
To remove your address information from national mailing lists used by other types of merchants, or your name and number from telephone solicitation lists, write to:
Mail Preference Service
PO Box 9008
Farmingdale NY 11735-9008
Telephone Preference Service
PO Box 9014
Farmingdale NY 11735-9014
If you are receiving unwanted telephone solicitations for credit or insurance, you can also notify the telemarketer that you want your name, number and address information removed from their marketing lists. The Federal Telemarketing Rule requires telemarketers to keep record of such requests and to inform the company(ies) they represent of the customers who want their names removed from the lists.
Secured credit cards are popular with people who have trouble getting credit. Simply speaking, with this type of credit the financial institution requires you to deposit and maintain a minimum amount of money in an account. Your "credit limit" may equal the amount on deposit. Interest charges and late fees are made on your purchases.
See also: CardTrack
Some creditors will occasionally allow customers to skip a monthly payment. This is especially common during the holiday season. While these offers might seem attractive, be aware of the cost of skipping payments.
The practice is most common among credit card issuers, but other creditors, including mortgage and loan companies, make similar offers.
Some creditors assess an additional fee when customers decide to skip a payment, others do not. When an additional fee is assessed, it is commonly called a deferral fee.
Skipping a payment increases the cost of credit, even when a deferral fee is not assessed. That is because interest continues to accrue on the unpaid balance during the time period the payment is skipped. Since there is no payment to reduce the balance, more interest will accrue.
If a creditor agrees to allow a customer to skip a payment, the creditor
may not charge the customer a late fee for the payment that was skipped
and may not report that payment as delinquent to credit bureaus.
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