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Quote of the Day “Everyone lives by selling something.” Robert Louis Stevenson, author of Treasure Island and Kidnapped docsity.com Sales (cont’d) • The Commission considers a practice to be unfair if it meets all of the following three tests: – It causes substantial consumer injury. – The harm of the injury outweighs any countervailing benefit. – The consumer could not reasonably avoid the injury. • In addition, the FTC may decide that a practice is unfair simply because it violates public policy. docsity.com Bait and Switch • FTC rules prohibit bait and switch advertisements: a merchant may not advertise a product and then disparage it to consumers in an effort to sell a different item. docsity.com Mail, Phone or Door-to-Door • Ordered items must be shipped when promised, or within 30 days. If this is not possible, the customer must have the opportunity to change his mind. • Under §5 of the FTC Act, anyone who receives unordered merchandise in the mail can treat it as a gift. • Door-to-door salespersons are required to notify the buyer of the right to cancel the transaction prior to midnight of the third business day after the sale. docsity.com Required Disclosure: Open-End Credit • In each statement, the lender must disclose: – the amount owed at the beginning of the billing cycle (the previous balance); – amounts and dates of all purchases, – credits and payments; – finance charges; – and the date by which a bill must be paid to avoid finance charges. docsity.com Required Disclosure: Closed-End Credit • Before finalizing the loan, the lender must disclose: – the cash price; – the total down payment, – the amount financed; – an itemized list of all charges; – amounts and dates of all payments; – total amount of payments; – late payment and pre-payment penalties; – and the lender’s security interest in the item purchased. docsity.com Other TILA Provisions • Under TILA, consumers have the right to rescind a mortgage for up to three business days after the signing. • Advertising of financing rates must be accurate: No bait and switch! • Enforcement is done by the FTC. docsity.com Fair Credit Reporting Act • Under the FCRA: – A consumer report can only be used for legitimate business needs. – Information must not be obsolete. – Employers may not seek a report on a current or potential employee without permission. – Anyone making an adverse decision against a consumer because of a report must reveal the name and address of the reporting agency. – A reporting agency must make a consumer’s report available upon request. – A reporting agency must investigate and correct any content reported to be inaccurate. docsity.com Fair Debt Collection Practices Act • Under the FDCPA, collectors may not: – Call or write the debtor who has notified the collector in writing that he wishes no further contact. – Call or write a debtor who is represented by an attorney. – Call a debtor before 8:00 a.m. or after 9:00 p.m. – Threaten a debtor or use obscene or abusive language – Call or visit the debtor at work if the consumer’s employer prohibits such contact. docsity.com FDCPA (Cont’d) • Under the FDCPA, collectors may not: – Imply that they are attorneys when they are not. – Threaten to arrest consumers who do not pay their debts – Make other false or deceptive threats, that is, threats that would be illegal if carried out. – Contact acquaintances of the debtor for any reason other than to locate the debtor (and then only once), or – Tell acquaintances that the consumer is in debt. docsity.com Magnuson-Moss Warranty Act • Manufacturers or sellers are not required to offer a warranty. • Any supplier that does offer a written warranty (on a consumer product that costs more than $15) must disclose the terms of the warranty in simple understandable language before the sale. docsity.com Consumer Product Safety Commission • The Consumer Product Safety Commission (CPSC) evaluates consumer products and develops safety standards. docsity.com “Virtually no one will go through life without reading an advertisement, ordering from a catalogue, borrowing money, needing a credit report, or using a consumer product. It is important to know your rights.” docsity.com
