Consumer Protection Laws Drama in the law Car sales in Bastra

Consumer Credit Protection Annual Credit Report https://www.annualcreditreport.com/cra/index.jsp 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

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

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

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”

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?

Presentation Case: Omega World Travel (P) v. Mummagraphics, Inc Presentation Case: Omega World Travel (P) v. Mummagraphics, Inc. (D) (4th Cir 2006), p. 300. Groups 10 & 7 v. Mummagraphics, Inc. Omega World Travel 800 start here Thursday – do Patrick’s case firsty

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?

SPAM laws – CAN-SPAM ACT of 2003 Commercial e-Mail. Act covers email whose primary purpose is advertising E-mail 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 E-Mail Legislation. The FTC commissioned a 60 page study that concluded a do not e-mail list is not feasible at this time.

What about this one?

What about this one?

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

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

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

Labeling and Packaging Regulation Heavily regulated Fair Packaging and Labeling Act of 1966 Identify product Identify quantity Federal Cigarette Labeling and Advertising Act of 1965 (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

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.

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.

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

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

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

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