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Federal Deception Law: 16 C.F.R. § 316.6. Severability

The provisions of this Part are separate and severable from one another. If any provision is stayed or determined to be invalid, it is the Commission’s intention that the remaining provisions shall continue in effect.

Federal Deception Law: Listing of Provisions, Source, and Authority

16 C.F.R.

§ 455.1 General duties of a used vehicle dealer; definitions.

§ 455.2 Consumer sales—window form.

§ 455.3 Window form.

§ 455.4 Contrary statements.

§ 455.5 Spanish language sales.

§ 455.6 State exemptions.

§ 455.7 Severability.

Figure 1: “AS IS”—NO DEALER WARRANTY (English)

Figure 2: IMPLIED WARRANTIES ONLY (English)

Figure 3: Back of Buyers Guide (English)

Figure 4: “AS IS”—NO DEALER WARRANTY (Spanish)

Figure 5: IMPLIED WARRANTIES ONLY (Spanish)

Figure 6: Back of Buyers Guide (Spanish)

Federal Deception Law: 16 C.F.R. § 455.1. General duties of a used vehicle dealer; definitions

(a) It is a deceptive act or practice for any used vehicle dealer, when that dealer sells or offers for sale a used vehicle in or affecting commerce as commerce is defined in the Federal Trade Commission Act:

(1) To misrepresent the mechanical condition of a used vehicle;

(2) To misrepresent the terms of any warranty offered in connection with the sale of a used vehicle; and

Fair Credit Reporting: 13.3.1 Overview

A violation of the FCRA is a violation of the various statutes providing general enforcement powers to each of the federal agencies with FCRA administrative enforcement jurisdiction.75 In general, the agencies may utilize their normal statutory enforcement authority to enforce the FCRA.76

Fair Credit Reporting: 13.3.2 CFPB Enforcement Powers

Like the other agencies currently or formerly invested with enforcement authority by the FCRA, the CFPB utilizes its own statutory enforcement powers to enforce the FCRA.77 The CFPB’s enforcement powers are defined in Subtitle E of Title X of the Dodd-Frank Act.78 The CFPB is not required to engage in a rulemaking prior to bringing an enforcement action.79

Fair Credit Reporting: 13.3.3 FTC Enforcement Powers

The FTC can use the powers it has under the FTC Act to secure compliance, irrespective of whether the defendant is engaged in “commerce” or meets any other jurisdictional tests in the FTC Act.90 The FTC’s authority encompasses the United States, the District of Columbia, the Commonwealth of Puerto Rico, and all the United States territories, but does not extend to activities outside those areas.91 Prior to the Dodd-Frank Act, this breadth of jurisdiction made the FTC the principal enforcement agency

Fair Credit Reporting: 13.3.4 FTC Ability to Seek Civil Penalties from Information Furnishers Is Limited

There is a significant limitation on the FTC’s authority to seek civil penalties for violations of the FCRA against information furnishers. The FCRA imposes several duties on furnishers when they furnish information to CRAs.99 One of the most critical duties is a limited duty not to report inaccurate information, which is not privately enforceable.100 It is also this duty for which the FTC’s authority to impose civil penalties is sharply curtailed.

Fair Credit Reporting: 13.3.5 Consumer Complaint Referral Process

The CFPB has statutory obligations with regard to consumer complaints about credit reporting. The statutory requirements are limited; however, the CFPB has the authority to create more robust complaint systems than those required by statute, and has done so.

Fair Credit Reporting: 13.4.1 Overview

Public FCRA enforcement actions are often resolved through consent decrees that can aid consumers who seek to bring their own case. Strictly speaking, an FTC or CFPB consent order or settlement does not adjudicate disputed issues of fact and does not decide a disputed issue of law.

Fair Credit Reporting: 13.4.3.1 Generally

The CFPB has taken a number of enforcement actions that involve consumer reporting issues, sometimes through joint efforts with the FTC.162 Some of these enforcement actions fall under sections of the FCRA that have no private right of action,163 whereas other actions it has brought against furnishers and consumer reporting agencies can also be brought by individual consumers.164

Fair Credit Reporting: 13.4.3.3 Claims Against Furnishers Under § 1681s-2

The CFPB has brought enforcement actions against furnishers for violations under section 1681s-2(a) for furnishing inaccurate information about consumers to CRAs that it knew or had reasonable cause to believe was inaccurate, as well as under section 1681s-2(b) for failure to conduct reasonable investigations of consumer disputes or to do so in a timely manner.

Fair Credit Reporting: 9.2.2.3.1 Introduction

An identity theft victim can seek a second type of alert, an extended fraud alert. The extended fraud alert lasts seven years.73 In order to obtain this alert, the consumer must (1) file a qualifying “identity theft report” with a law enforcement agency, and (2) provide the CRA with “appropriate proof of identity.”74

Fair Credit Reporting: 9.2.2.3.3 Effects of the extended fraud alert

By submitting the identity theft report and providing satisfactory proof of identification to a nationwide CRA, the consumer may add to their credit file an extended fraud alert that can last for seven years.75 As with the initial fraud alert, the CRA must refer the alert to the other nationwide CRAs, all of whom must provide a “clear and conspicuous view” of the alert each time they generate the consumer’s credit score.76

Fair Credit Reporting: 9.2.2.4 Active Military Duty Alerts

Consumers on active military duty can inform users of their status by adding an alert to their files.82 The FCRA defines an “active duty military consumer” to mean “a consumer in military service who . . . is on active duty or a reservist called to active duty . . . and who is assigned to service away from the usual duty station of the consumer.”83 As of May 24, 2019, the term also includes members of the National Guard.84

Fair Credit Reporting: 9.2.2.5 Effects of Alerts

All three varieties of alerts must notify users that the consumer does not authorize new credit, an additional credit card on an existing account, or any increase in the credit limit of any existing account.92 However, an extension of credit under an existing open-end credit account (e.g., a credit card) is exempt from this limitation.93

Fair Credit Reporting: 9.2.3.1 Generally

As a result of the Equifax data breach,105 Congress included a number of consumer reporting provisions when it passed the “Economic Growth, Regulatory Relief, and Consumer Protection Act” in May 2018.106 The most significant provision is that Congress added subsection 1681c-1(i) to the FCRA,107 which requires the nationwide consumer reporting agencies108 to provide for free security freezes.

Fair Credit Reporting: 9.2.3.3 Removal and Thaws

Once placed, a nationwide consumer reporting agency may remove a security freeze only under three circumstances: (1) upon the direct request of the consumer;123 (2) in the case of protected consumers, upon the direct request of the consumer’s representative;124 or (3) if the security freeze was placed “due to a material misrepresentation of fact” by the consumer125 or a protected consumer’s representative.126

Fair Credit Reporting: 9.2.3.4 Effective of a Freeze; Exemptions

If a creditor or other third party seeks a consumer report that is frozen and the consumer does not allow access to the report, the creditor may treat the application is incomplete. A nationwide CRA may advise a third party that it has placed a security freeze with respect to a consumer.131

The security freeze provision provides for a number of exceptions to the general right to freeze a file, summarized as follows:

Fair Credit Reporting: 9.2.3.5 Notice of Right to a Freeze

Any time a consumer has the right to receive a summary of rights under section 1681g, that summary must include a designated notice that describes the consumer’s right to obtain a security freeze.143 The Consumer Financial Protection Bureau has created a model summary of such a notice.144

Fair Credit Reporting: 9.2.3.6 Remedies; Preemption

Consumers may bring a cause of action for negligent or intentional violation of the federal security freeze provision.145 State laws with respect to the subject matter regulated by the security freeze provisions at section 1681c-1(i) and (j) are preempted.146 Thus, for example, any state laws that apply security freezes to employment or insurance use of a consumer report are preempted.147 Since the federal security freeze provisions only apply to n

Fair Credit Reporting: 9.2.4.1 Access to Thief’s Transaction Information

The FCRA requires businesses that have dealt with an identity thief to provide information about their transactions to the victim and to law enforcement agencies.148 This requirement was intended to help victims document fraud transactions and find the thief. Finding the thief is necessary to prosecute and convict the thief.