Liability of Assignees and Related Creditors; The FTC Holder Rule Skip over navigation
LexisNexis® Browse Law Reviews and Treatises
Skip over navigation
Sign in with your lexis.com® ID to access the full text of this chapter.
-OR-
Order from the LexisNexis Store. Formats may include:
  • eBook for Mobipocket readers, including Amazon® Kindle

     
  • eBook for eReader, including Adobe® Digital Edition, Apple® iPad®, Sony® Reader

     
  • Print (Hardcover)

 

Debtor-Creditor Law
 
Copyright 2016, Matthew Bender & Company, Inc., a member of the LexisNexis Group.


1A-14 Debtor-Creditor Law 14.syn


Title

Liability of Assignees and Related Creditors; The FTC Holder Rule

Author

Editor-in-Chief, Theodore Eisenberg and Contributing Authors

Chapter Summary


ABSTRACT TEXT:

In order to save time and expenses and prevent the necessity of a second lawsuit, it is often prudent for a consumer defending a collection action to raise claims and defenses against the seller or original creditor. But is the creditor who brought the collection action subject to those claims and defenses?

This chapter from Debtor-Creditor Law examines the Federal Trade Commission's Rule Concerning the Preservation of Consumers' Claims and Defenses ("FTC Holder Rule"), which requires credit-sellers to include in consumer credit contracts a notice that any assignees are subject to the consumer's claims and defenses against the assignor.

This chapter explains that the FTC Holder Rule prevents creditors from insulating themselves from assignor-related defenses by asserting their "holder in due course" status under the Uniform Commercial Code ("UCC") section 3-302. The FTC Holder Rule effectively defeats the assignee's status under the UCC as a holder in due course, and thereby subjects the assignee, as a matter of contract law, to the consumer's claims and defenses.

Furthermore, this chapter also discusses the effectiveness of the FTC Holder Rule as a consumer remedy in collection actions that do not involve credit sales, but, rather, notes originated by a third party lender that provides funds that are paid to the seller.

In addition, this chapter examines the following situations in which the FTC Holder Rule does not offer any consumer remedy: (1) when the collection action involves a loan that is not related to a sales transaction; and (2) when a bank is collecting on a bounced or dishonored check.

Debtor-Creditor Law (Matthew Bender) is a comprehensive multi-volume treatise, written by prominent experts in the field. It offers complete coverage of all aspects of the debtor-creditor relationship, including current case law, practical guidance, and numerous forms for the practitioner. In addition to comprehensive coverage of federal consumer credit legislation and the reprint of related statutes and regulations, Debtor-Creditor Law also features chapters covering Uniform Commercial Code Articles, including Article 2 (Sales), Article 3 (Negotiable Instruments) and Revised Article 9 (Secured Transactions). It covers third party obligations; satisfaction of obligations through non-judicial remedies; and international insolvency law and enforcement of judgments for a variety of countries, including Argentina, Brazil, Canada, Germany, and France.

CORE TERMS:

Assignee,Assignor,Consumer,Debt Collection,Consumer Debt,Collection Action,Creditor,Consumer Remedies,Creditors' Rights,Credit Sales,Consumers' Claims and Defenses,Federal Trade Commission,FTC,Holder in Due Course,FTC Holder Rule,Uniform Commercial Code,UCC

RELATED CHAPTERS: (View)

See Chapter 1 for information on the Truth in Lending Act ("TILA"). See Chapter 3 for a discussion of the Consumer Leasing Act ("CLA"). See Chapter 4 for a discussion of various laws designed to prevent unfair or deceptive acts and practices, known as "UDAP" statutes. See Chapter 7 for information on consumer protection laws applicable to rent-to-own contracts. See Chapter 8 for information on the Fair Debt Collection Practices Act ("FDCPA").

OTHER RELATED PUBLICATIONS:

See Lender Liability Law and Litigation (Matthew Bender) for expert guidance on the theory and practice of lender liability law.

See Anderson's Ohio Creditors' Rights (Matthew Bender) for step-by-step guidance on issues that a creditor may encounter in attempting to collect money from a debtor, along with examples, suggested forms and other practical materials.

See Commercial and Consumer Warranties--Drafting, Performing and Litigating (Matthew Bender) for in-depth analysis and practical discussions supported by extensive case authority from all jurisdictions.

See Collier Bankruptcy Manual (Matthew Bender) for definitive section-by-section analysis of the Bankruptcy Code, accompanied by detailed analysis of current rules, case law, and related non-bankruptcy law.
 
 
If you are interested in obtaining a lexis.com® ID and Password, please contact us at 1-(800)-227-4908 or visit us at http://www.lexisnexis.com/.
Search Documents
 
eg., Environmental Insurance Coverage Under the Comprehensive General Liability Policy
 
 
 
 

Lexis® Web - The only search engine that delivers free web content specifically from legal sites validated by LexisNexis® attorney editors and includes tools for faster research and more relevant results.

 
LexisNexis Store
Research Now - Go to lexis.com
Connect the Dots - Free 1 hour webcast
Share. Network. Discover. - Go to LexisNexis Communities