Consumer Protection - Chapter 24

Amendments to Credit-Card Rules:

A company may not charge over limit fees except in specified situations. If a customer has balances at different interest rates, payments in excess of the minimum amount due must be applied first to the balance with the highest rate.

Amendments to Credit-Card Rules:

A company may not retroactively increase the interest rates on existing card balances, unless the account is sixty days delinquent. A company must provide forty-five days' advance notice to consumers before changing the credit-card terms.

Remedies for Violations:

A credit reporting agency that fails to comply with the act is liable for actual damages, plus additional damages not to exceed $1,000 and attorneys' fees.

Fair Credit Reporting Act:

Act that protects privacy of background information and ensures that information supplied is accurate.

Fair credit reporting act

Act that protects privacy of background information and ensures that information supplied is accurate.

Bait and Switch Advertising

Advertising one product (the "bait") at a very attractive price, then informing the customer that the advertised product is either unavailable or of poor quality, convincing the customer to purchase a different, more expensive product. NOTE: Vague generalities and/or obvious exaggerations collectively called puffery -- are not deceptive.

Claims That Appear to Be Based on Factual Evidence:

Advertising that appears to be based on factual evidence but is not reasonably supported by evidence will be deemed deceptive.

Equal Credit Opportunity:

Congress enacted the Equal Credit Opportunity Act (ECOA) as an amendment to the TILA. Under the act, credit cannot be denied solely on the basis of race, religion, national origin, color, gender, marital status, or age. The act also prohibits credit discrimination on the basis of whether an individual receives certain forms of income.

Online Deceptive Advertising:

FTC monitors websites for deceptive claims involving everything from medical treatments, to exercise equipment

Food Labeling:

Fair Packaging and Labeling Act requires food product labels identify: the product; the net quantity of the contents and, if the number of servings is stated, the size of a serving; the manufacturer; and the packager/distributor, plus savings claims, components of nonfood products, and partial filling.

Requirements of The Act 2

Harass or intimidate the debtor or make false or misleading statements. Communicate with debtor at any time after receiving notice that the debtor is refusing to pay the debt, except to advise debtor of further action to be taken by a collection agency. A collection agency must include a validation notice when it initially contacts a debtor for debt payment or within five days of that initial contact. The notice must state that the debtor has thirty days in which to dispute the debt and to request a written verification of the debt from the collection agency.

Consumer Notification and Inaccurate Information

If denied credit, consumer has right to source of any information used by the credit agency, as well as the identity of anyone who has received an agency's report. If a consumer's credit files contain inaccurate information, she/he should report the problem to the agency, and it must conduct a systematic examination of its records. Any unverifiable or erroneous information must be deleted within a reasonable period of time.

Formal Complaint:

If the FTC succeeds in proving that an advertisement is unfair or deceptive, it usually issues a cease-and-desist order to the company. The FTC may also impose a sanction known as counteradvertising that requires the company to inform the public about the earlier misinformation.

FTC Orders and Remedies:

If the FTC succeeds in proving that an advertisement is unfair or deceptive, it usually issues a cease-and-desist order to the company. The FTC may also impose a sanction known as counteradvertising that requires the company to inform the public about the earlier misinformation.

Application:

It only applies to people who lend funds, sell on credit, or arrange an extension of credit in the ordinary course of business

fair and accurate Credit transaction Act (FACT) 2:

Merchants and others who have access to the receipts can no longer obtain the consumers' names and full credit-card numbers. Financial institutions must work with the FTC to identify "red flag" indicators of identity theft and to develop rules for the disposal of sensitive credit information.

Caloric Content of Restaurant Foods:

The Affordable Care Act (or Obamacare) included provisions aimed at combating the problem of obesity in the United States. All restaurant chains with twenty or more locations are required to post the caloric content of the foods on their menus.

Automobile Fuel Economy Labels:

The Energy Policy and Conservation Act (EPCA) requires automakers to attach an information label to every new car. Labels must include the Environmental Protection Agency's fuel economy estimate for the vehicle.

Enforcement of the Act:

The FTC is primarily responsible for enforcing the FDCPA. A debt collector who does not comply with the act is liable for actual damages, plus additional damages not to exceed $1,000 and attorneys' fees. Debt collectors who violate the act are exempt from liability if they can show that the violation was unintentional and resulted from a bona fide error.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) attempts to curb abuses by collection agencies. A creditor that is attempting to collect a debt is not covered by the act unless it misrepresented itself as a collection agency to a debtor.

Deceptive Advertising:

The Federal Trade Commission Act created the Federal Trade Commission (FTC) to carry out the broadly stated goal of preventing unfair and deceptive trade practices, including deceptive advertising.

Nutritional Content of Food Products:

The Nutrition Labeling and Education Act requires food labels to have standard nutrition facts and regulates the use of such terms as fresh and low fat.

Credit Card Rules

The TILA limits consumer liability for credit card debt in cases of stolen cards to $50. Credit-card companies must disclose the computation method that is used to determine the outstanding balance and to state when finance charges begin to accrue.

Disclosure Requirements:

The TILA's disclosure requirements are contained in Regulation Z. If contracting parties are subject to the TILA, Regulation Z applies to any transaction that has four or more payment installments. Transactions subject to Regulation Z typically include installment loans, car loans, and home-improvement loans.

Truth in Lending Act (TILA)

The Truth-in-Lending Act (TILA) is the name given to Title I of the Consumer Credit Protection Act, as amended. The TILA is basically a disclosure law that is administered by the Federal Reserve Board.

Fair Credit Reporting Act 2:

The act provides that consumer credit reporting agencies may issue credit reports to users only for specified purposes (such as the extension of credit).

fair and accurate Credit transaction Act (FACT)

The purpose of the act is to combat identity theft. FACT established a national fraud alert system that allows consumers to place an alert on their credit file. FACT requires major credit reporting companies to provide consumers with a free credit report every twelve months. Account numbers on credit-card receipts must be truncated (shortened).

False Advertising Claims under Lanham Act

To state a successful claim for false advertising under this act, a business must establish each of the following elements: An injury to a commercial interest in reputation or sales. Direct causation of the injury by false or deceptive advertising. A loss of business from buyers who were deceived by the advertising.

requirements of the Act

Under the FDCPA, a collection agency may not: Contact debtor at his place of employment, if employer objects. Contact debtor during inconvenient or unusual times, or at any time debtor is being represented by an attorney. Contact third parties other than the debtor's parents, spouse, or financial adviser about payment of a debt, unless a court authorizes such action.

Damages When Consumers Are Injured:

When a company's deceptive ad involves wrongful charges to consumers, the FTC may seek other remedies including damages.

Restitution Possible:

When a company's deceptive ad leads to wrongful payments by consumers, the FTC may seek restitution.

Federal Trade Commission Actions:

When the FTC receives numerous and widespread complaints about a particular problem, it will investigate.

Disclosure Requirements:

in securities law, the revealing of financial and other information relevant to investors considering buying securities; the requirement that sufficient information be provided prospective investors so that they can make an informed evaluation of a security.