The FTC issued an advisory opinion affirming its interpretation of the holder in due course rule. The rule permits consumers who enter into credit contracts with a seller of goods to assert the same legal claims and defenses against a third party who purchases the credit contract as they would have against the original seller. The advisory opinion, issued in response to a request from the National Consumer Law Center and other consumer protection advocacy groups, clarifies that courts should not limit consumers’ ability to seek affirmative relief only to instances where a rescission right under state law exists. The NCLC requested the opinion after a number of courts denied relief absent a state law rescission claim. Click here for the press release and here for the advisory opinion.
Alert May 15, 2012