1. Consumer Protection Laws
Drama in the law
Car sales in Bastra

2. Consumer Credit Protection
Annual Credit Report
Consumer Credit Protection
Equal Credit Opportunity Act
Fair Credit Reporting Act
If denied credit based on report – consumer must be notified
Reporting agency must investigate consumer reports of inaccurate information
Consumer can file 100 word rebuttal
Who has access to credit reports?
What about other types of reports? Prior litigation records, for instance.
Fair and Accurate Credit Transaction Act (FACT)
Right to see your report
Credit card receipts truncated
Rules on disposing of sensitive information

3. Truth-in-Lending Act Regulation Z $50 maximum loss
Carlisle v. Whirlpool Financial – Door-to-door sales of satellite dishes. Cost $1,100 but could pay $200 down and finance the rest (avail. elsewhere for $199). Financial terms not disclosed in accordance with Truth-in-Lending Law – plaintiffs awarded $581 million.
Purtle v. Eldridge – Purtle bought a car from Eldridge on credit. She lied on the credit application about her job status. Eldridge failed to disclose the finance charge, the annual percentage rate, or the total sales price in violation of the TILA. What happens?
Truth-in-Lending Act
Regulation Z
$50 maximum loss
Strictly construed against lender
why?
“Reg Z” box – Required for Loans Subject to TILA

4. Credit Card Disclosure Rules
Fees and APR in bold
Key terms highlighted in a table – similar to Reg Z box
Periodic statements easier to read
Account changes must be displayed in a box near the top
Law also limits when credit card companies can increase rates
Changes to terms must give 45 day notice – can opt out if do not agree with the changes
Protects against due date practices
Outlaws banks giving away promotional items on college campuses

5. Fair Debt Collections Practices Act
Contacting the debtor at the debtor’s place of business
Contacting the debtor at an inconvenient time
Contacting third parties
Using harassment or intimidation
Communicating with the debtor at any time after receiving notice that the debtor is refusing to pay the debt
Validation Notice (30 days to dispute)
Only applies to “debt collectors”

6. Telemarketing
$600 Billion sales volume
4 million employees
100 million calls a day
Direct Marketing Activities Telemarketing Regulated by state and federal law
Telephone Consumer Protection Act
Prohibits automated dialing machine or
Pre-recorded voice
Fax advertising limited
Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994
Applies to most telemarketing
Requires
Inform recipient that the call is a sales call
Identify seller’s name and the product
Inform of total cost
Other sales conditions – i.e. whether it’s final or non-refundable
$10,000 per violation penalty
Private parties may bring suit in Federal court if they have suffered more than $50,000 in damages
Must provide caller ID information
Why is it significant that a private party can bring an action, who else would?

7. Presentation Case: Omega World Travel (P) v. Mummagraphics, Inc
Presentation Case: Omega World Travel (P) v. Mummagraphics, Inc. (D) (4th Cir 2006), p Groups 10 & 7 v.
Mummagraphics, Inc.
Omega World Travel
800 start here Thursday – do Patrick’s case firsty

8. Direct Marketing Activities Do Not Call List
National Do Not Call List started in 2003
1991 Telephone Consumer Protection Act
Court struck down the list based on lack of authority – according to the judge the FCC, not the FTC should have developed the list.
1994 Telemarketing and Consumer Fraud and Abuse Prevention Act
Rep Billy Tauzin joked “[the] law should be called “This time we really mean it act.”
Five year limit – so names are beginning to be purged as of Sept 15, 2007, 2012, 2017 next year to reapply (set in place to help with people who move or change numbers)
Exempt – politicians, non-profits
Not Businesses. Businesses cannot sign up
Businesses That Call – must check list. Ok to call if business relationship in past 18 months
Cell Phones?

9. SPAM laws – CAN-SPAM ACT of 2003
Commercial . Act covers whose primary purpose is advertising
that facilitates an agreed-upon transaction or updates an existing customer is exempt (although it cannot be false or misleading)
Main provisions:
Bans false or misleading headers. The From and To line must be acurate.
Bans deceptive subject line.
Requires opt-out method
Requires a valid physical address
Do Not Legislation. The FTC commissioned a 60 page study that concluded a do not list is not feasible at this time.

10. What about this one?

11. What about this one?

12. Does this e-mail violate CAN-SPAM? WHY?

14. Presentation Case - Home Solicitations Rossi v
Presentation Case - Home Solicitations Rossi v. 21st Century Concepts, Inc. , p. 303 Groups 8 & 13

15. More Consumer Protection Laws
End of Chapter Q: 8: Hantske v. Brandenburger
Facts: Fred Hantske Jr was telephoned by Brandenburger & Davis and told he was a possible heir to an estate. They agreed to meet in Hantske’s home to discuss and Hantske agreed to give Brandenburger 25%. Hanske got $30,000 ($7,500 = 25%) and cancelled the contract.
Home Solicitations
3 day cooling off rule
Location
Home
Hotel
Fairground
Convention
Unsolicited merchandise
900 Numbers
Disclose name
The cost of the call in the introductory message
Opportunity to hang up without charge
Warranties. - covered in separate chapter
Case Illustration 8.3 Kamposkek v. Johnson
Home improvement
Builder did not give notice
Buyer cancels contract

16. Labeling and Packaging Regulation
Heavily regulated
Fair Packaging and Labeling Act of 1966
Identify product
Identify quantity
Federal Cigarette Labeling and Advertising Act of (warnings – modified by at least 3 more acts)
Made in USA Labeling (all or virtually all for FTC – NAFTA = at least 55% from US, Canada or Mexico)
1990 Nutrition Labeling and Education Act

17. Food Drug and Cosmetics Laws
Food purity regulated
1990 Nutrition Labeling and Education Act
The FDA's action level for peanut butter is 30 or more insect fragments or one or more rodent hairs per 100 grams.

19. Ban dangerous products Recall dangerous products
Example of Recall
Dangers to Children
Ban dangerous products
Recall dangerous products
Mattel voluntarily recalled this toy in August of 2007 because the Chinese company that made it used lead paint to save money
An estimated 6,100 people have been treated in hospital emergency rooms for injuries involving lawn darts from 1978 through present. At least 80 percent of the victims were younger than 15 years old, and more than 50 percent were ten years old or younger. More than half of the victims had injuries to the skull, eye, ear or face.

20. Consumer Product Safety Improvement Act.
Lead testing for wood toys? $300-$4,000 per toy.
Bikes?
Books?

21. Dangers to Everyone Mirama Juicer - Consumer told Mirama that
“juicer suddenly exploded, throwing with great violence pieces of the clear plastic cover and shreds of the razor sharp separator screen as far as eight feet in my kitchen.”
Mattel Article re: informing FTC
Ford Explorer and Firestone.
In 2000, Firestone recalled 14.4 Million Tires
10 years after first lawsuit filed against Ford based on the Explorer
119 Deaths
Juicer – Not Mirama

22. Using Consumer Protection as a Sword
ATVs. Polaris, Honda & Suzuki are lobbying Congress to require safety standards (after losing 40% of the market to cheaper Chinese and Taiwanese imports).
Wireless. Yahoo, Google support open market – AT&T and Verzion like closed system giving them control over their infrastructure
Credit Card Fees. Claim high interchange fees are bad for consumers

23. Presentation Case, Gonzalez (P) v. Kay (D), (Fth Cir 2009), p. 306
Presentation Case, Gonzalez (P) v. Kay (D), (Fth Cir 2009), p Groups 6 & 3