Federal Consumer Protection Laws

1. Federal ConsumerProtection Laws Presented by Joshua R.I. Cohen

2. Topics • TCPA – Telephone Consumer Protection Act • ECOA – Equal Credit Opportunity Act • CROA – Credit Repair Organization Act • FCRA – Fair Credit Reporting Act

3. Not Discussed • FDCPA – Fair Debt Collection Practices Act • TILA – Truth in Lending Act

4. TCPA Telephone Consumer Protection Act 47 U.S.C. § 227, 46 C.F.R. § 64.1200 • Passed in 1991 • Covers: • Unsolicited faxes • Prerecorded messages • Telephone solicitations at inconvenient times • Nationwide do-no-call rule • Junk faxes • Text messaging

5. TCPA Exemptions • Tax exempt non-profit organizations • For-profits calling on behalf of non-profit • Company specific do-not-call applies • Pre-existing relationship • But not debt collection to cell phones • Calls to non-residential lines • Junk fax still applies here

6. TCPA 227(b)(1)(B): it is unlawful “to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the Commission under paragraph (2)(B)”

7. TCPA 227(b)(1)(C): it is unlawful “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless—” 227(b)(1)(D): it is unlawful “to use an automatic telephone dialing system in such a way that two or more telephone lines of a multi-line business are engaged simultaneously.”

8. TCPA 227(b)(3): Private Right of Action • Enjoin such action • The greater of actual damages or $500 for EACH violation If violation is willful OR known, 3x (B): $1,500 PER VIOLATION!

9. TCPA 227(c) • protection from violation of do-not-call list • Violation if more than one call received within 12 month period • Private right of action 227(c)(5) • Same damages as 227(b)

10. TCPA Suits • Actual damage need not be proven for statutory damages • Strict liability statute • Damages PER CALL! • No fee shifting (no atty fees) • Bootstrap state UDAP for fees • File in Fed or State court • SOL = 4 years

11. TCPA Resources • NCLC – Federal Deception Law • www.TCPAlaw.com

12. CROA Credit Repair Organization Act 15 U.S.C. § 1679 • Covers Debt Relief Servicers IF representation of credit improvement • Specifically covers express or implied: • Improving any consumer’s credit record, history, or rating • Providing advice and assistance to any consumer with regard to any such activity or service • 501(c)(3) organizations exempt

13. CROA Restrictions • No upfront fees • No work prior to expiration of 3-day rescission period • No waiving of CROA provisions • No misrepresentations regarding credit

14. CROA Requirements • Disclosures • Contract • 3-day Rescission Period • No Advance Payments

15. CROA Remedies • CROA non-compliant contract is void • Actual damages, punitive, atty fees • SOL = 5 years • Federal claim Resources • NCLC – Fair Credit Reporting

16. ECOA Equal Credit Opportunity Act 15U.S.C. § 1691, 12 C.F.R. § 1002 • Prohibits Discrimination • Race, Color, Religion, National origin, Sex, Marital status, Age, receipt of public assistance, or for exercising one’s rights • Proscribes procedures for creditors • Disallowed factors, account closings, spousal credit reporting, information limits, spousal co-sign requirements, and notice requirements

17. ECOA • Covers credit transactions • Deferred payment of a debt • Covered parties: • Regularly extends, renews or continues credit • Regularly arranges for the above • Assignee of the originator of the above • Exempt transactions • Public utility credit • Incidental consumer credit • Securities credit

18. ECOA • Public utility credit – partial exemption for: • Marital status info • Retention period for credit app • Securities credit – partial exemption for: • Marital status • Spousal info • Sex • Co-signer restrictions • Credit reporting for both spouses • Retention period for credit app

19. ECOA Incidental consumer credit Definition: • Primarily for personal, family, household purpose • NOT pursuant to credit card account • NOT subject to finance charge • Under 4 installments Partial Exemptions: • Marital status • Spousal info • Alimony, child support • Sex • Co-signer restrictions • Notice requirements • Credit reporting for both spouses • Retention period for credit app

20. ECOA Remedies – §1691e • Actual, punitive ($10k cap), atty fees, and equitable relief • Fed or State court • SOL = 5 years • 1 year after any agency enforcement action • No double dipping with FHA Resources • NCLC – Credit Discrimination

21. FCRA Fair Credit Reporting Act 15 U.S.C. § 1681, 16 C.F.R. § 680 • Consumer credit reports only • Regulates consume reporting agencies and reports • Ensure maximum possible accuracy of information • Also covers furnishers

22. FCRA Claims arise from improper reinvestigation • Consumer disputes with CRA • CRA forwards dispute to Furnisher • Furnisher response to dispute • CRA makes appropriate corrections • Turn around time is within 30 days

23. FCRA Claims • 1681n – negligence • 1691o – willful • Knowing, intentional, or reckless disregard of the law

24. FCRA Claim against CRA • CRA failed to follow procedures to ensure maximum possible accuracy • CR contained inaccurate entry • Consumer suffered injury • Injury caused, in part, by inaccuracy

25. FCRA Claim against Furnishers • No claim for initially inaccurate information • Claim arises from furnishers failure to follow reinvestigation procedures: • Conduct investigation of dispute • Review info provided by CRA • Report results to CRA • If info is incomplete/inaccurate, report to other CRAs • Promptly take appropriate action

26. FCRA Remedy • SOL • 2 years from date of discovery • 5 years from actual violation • Damages • Actual • $1,000 Statutory (willful violation only) • Punitive (willful violation only) • Attorneys fees