ASSIGNMENT
1. The Federal Trade Commission (FTC) brings a deceptive trade practice action against Beneficial Finance Company based on Beneficial’s use of its “instant tax refund” slogan. The FTC argues that Beneficial’s advertising a tax refund loan or instant tax refund is deceptive in that the loan is not in any way connected with a tax refund but is merely Beneficial’s everyday loan based on the applicant’s creditworthiness. Is this an unfair or deceptive trade practice? Explain.
2. Barnes borrows $10,000 from Linda for one year, agreeing to pay Linda $2,000 in interest on the loan and to repay the loan in twelve monthly installments of $1,000. The contract which Linda provides and Barnes signs specifies that the annual percentage rate is 20 percent. Does this contract violate the Federal Consumer Credit Protection Act? Why or why not?
3. A consumer entered into an agreement with Rent-It Corporation for the rental of a television set at a charge of $17 per week. The agreement also provides that if the renter chooses to rent the set for seventy-eight consecutive weeks, title would be transferred. The consumer now contends that the agreement was really a sales agreement, not a lease, and therefore is a credit sale subject to the Truth-in-Lending Act. Explain whether the consumer is correct.
4. Central Adjustment Bureau allegedly threatened Consumer with a lawsuit, service at his office, and attachment and sale of his property to collect a debt when it did not intend to take such actions and when it did not have the authority to commence litigation. On some notices sent to Consumer, Central failed to disclose that it was attempting to collect a debt. In addition, Consumer claims that Central sent notices demanding payment that purported to be from attorneys but that were in fact written, signed, and sent by Central. Has Central violated the Fair Debt Collection Act? Explain.
5. The Giant Development Company undertakes a massive real estate venture to sell 9,000 one-acre unimproved lots in Utah. The company advertises the project nationally. Arrington, a resident of New York, learns of the opportunity and requests information about the project. The company provides Arrington with a small advertising brochure that is devoid of information about the developer and the land. The brochure consists of vague descriptions of the joys of homeownership and nothing else. Arrington purchases a lot. Two weeks after entering into the agreement, Arrington wishes to rescind the contract. Will Arrington prevail? Explain
