Quiz 33: Consumer Protection
Refer to the case Thompson v San Antonio Retail Merchants Association Case Issue The facts to this case are: • Defendant, a credit reporting agency, negligently amended information of a consumer (plaintiff). • The credit report of the plaintiff was then inaccurate leading to plaintiff's difficulty in obtaining credit applications. The issue is whether plaintiff can recover for the inaccurate information by defendant. Trial court held for plaintiff, defendant appealed. Relevant Terms, Laws, and Cases Fair Credit Reporting Act (FCRA) - federal regulation on credit reporting agency. This statute seeks to prevent inaccurate credit reports which hurt consumers. Opinion Appeals court affirmed the decision. The court argued that : • FCRA holds credit report agencies liable for failing to comply with the act • The defendant failed to comply with 1681e (b), which requires them to have "reasonable procedures" for " maximum accuracy" of consumer credit information. • For example, defendant failed to have their program detect error report due to social security mix up which was apparent to a reasonable person Hence, as the defendant failed to comply with the FCRA they are liable for damages to plaintiff.
Refer to the case FTC v Colgate Palmolive Case Issue The facts to this case are: • Defendant, a hygiene product manufacture, showed an ad which showed their shaving cream able to soften sandpaper. • However, the sandpaper was actually Plexiglas sprinkled with sand. The issue is whether this ad is considered a deceptive practice as maintained by FTC (plaintiff) Relevant Terms, Laws, and Cases Federal Trade Commission (FTC) - responsible for regulating and reviewing business practices to protect consumers. Roles include prevention of monopolies and deceptive business practices. Opinion The Supreme Court held for the FTC. They argued that: • The ad made consumers believe sandpaper was used. • The act was deceptive in that actual sandpaper was not used. • It didn't matter if the product actual can smoothen sandpaper. Hence, the court agreed with the FTC. Perhaps, the company should have used actual sandpaper on the advertisement.
Refer to the case Charles v Lundgren Associates Case Issue The facts to this case are: • Plaintiff paid a check for a restaurant meal which later bounced. • The meal payment was sent to collections which ended up at a law firm. • Plaintiff sued under the Fair Debt Collections Practices Act (FDCPA) The issue is whether the FDCPA holds for a bounced check; that is whether the bounced check is a debt under FDCPA. District court held that it wasn't as a bounced check is not an extension of credit, the typical definition of debt. Relevant Terms, Laws, and Cases Fair Debt Collections Practices Act (FDCPA) - regulates the debt collection procedures and prevents harmful and harassing debt collection practices. Opinion Court of Appeals reversed the decision. They argued that: • Debt in the FDCPA is not limited to credit extensions. • A previous case defined debt to be "any obligation in which money is owed ", this includes a bounced check for a meal. Hence, the bounced check is a debt and must fall under the FDCPA.