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Fair Credit Reporting: 16.12 Credit Scores and Utility Service

Another controversial use of credit scores involves the determination of whether a consumer will receive utility service and have to pay a deposit for such services.482 The use of credit scores by utility companies has been challenged as undermining their common law duty to serve the public and violating the prohibition against consideration of a “collateral” matter in determining whether to provide service.483

Federal Deception Law: 16 C.F.R. § 455.2. Consumer sales—window form

(a) General duty. Before you offer a used vehicle for sale to a consumer, you must prepare, fill in as applicable and display on that vehicle the applicable “Buyers Guide” illustrated by Figures 1–2 at the end of this part. Dealers may use remaining stocks of the version of the Buyers Guide in effect prior to the effective date of this Rule for up to one year after that effective date (i.e., until January 27, 2018).

Federal Deception Law: 16 C.F.R. § 455.3. Window form

(a) Form given to buyer. Give the buyer of a used vehicle sold by you the window form displayed under § 455.2 containing all of the disclosures required by the Rule and reflecting the warranty coverage agreed upon. If you prefer, you may give the buyer a copy of the original, so long as that copy accurately reflects all of the disclosures required by the Rule and the warranty coverage agreed upon.

Federal Deception Law: 16 C.F.R. § 455.4. Contrary statements

You may not make any statements, oral or written, or take other actions which alter or contradict the disclosures required by §§ 455.2 and 455.3. You may negotiate over warranty coverage, as provided in § 455.2(b) of this part, as long as the final warranty terms are identified in the contract of sale and summarized on the copy of the window form you give to the buyer.

Federal Deception Law: 16 C.F.R. § 455.5. Spanish language sales

(a) If you conduct a sale in Spanish, the window form required by § 455.2 and the contract disclosures required by § 455.3 must be in that language. You may display on a vehicle both an English language window form and a Spanish language translation of that form. Use the translation and layout for Spanish language sales in Figures 4, 5, and 6.

(b) Use the following language for the “Implied Warranties Only” disclosure when required by § 455.2(b)(1) as illustrated by Figure 5:

Consumer Class Actions: 7. Class Actions Under the Massachusetts Tort Claims Act

The Massachusetts Tort Claims Act (“MTCA”) establishes the procedures for asserting tort claims against public employees and municipalities. Mass. Gen. Laws ch. 258, § 2. Specifically, the MTCA establishes that public employers “shall be liable for injury or loss of property or personal injury or death caused by the negligent or wrongful acts or omissions of any public employee while acting within the scope of his office or employment.” Id.

Consumer Class Actions: 2. 2020 Developments

There is one 2020 case involving a class action in Nebraska, Lassalle v. State, 307 Neb. 221, 948 N.W.2d. 725 (2020). This class action involved a group of Department of Health and Human Services (“DHHS”) employees that brought a wage dispute against the State. Id.

Federal Deception Law: 3.2.4.4.2 Analysis from Payday Lending Rule’s Supplemental Information

The Federal Register notice accompanying the CFPB’s final payday lending rule explains how consumers fail to understand the material risks and costs of payday, auto title, and similar loans.153 While consumers certainly understand that they are taking out a loan that must be repaid by a certain date, and that there are consequences for non-payment, they do not understand how severe the impact of non-payment is or that non-payment is very likely for these loans.

Federal Deception Law: 3.2.4.4.4 Lack of Understanding Based on Complexity of Product or Service

The CFPB has accepted a consent order from a lead generator that sold leads to small loan lenders. According to the consent order, the company conveyed information to lenders where it knew that the loan product in the consumer’s state of residence would be void in whole or in part. This took unreasonable advantage of the consumer’s lack of understanding of material risks, costs, and conditions of a consumer financial product or service.161

Federal Deception Law: 3.2.4.4.5 Lack of Understanding Based on Creditor’s Failure to Disclose

The CFPB also agreed to a consent order where a company charged surprise fees to military service members while the company processed military payroll deductions to send to creditors. The practice took unreasonable advantage of the consumers’ lack of understanding because servicemembers did not know that they would be charged the fees and the creditor did not disclose the fees or notify the servicemember when the fees were assessed.166

Federal Deception Law: 3.2.4.4.6 Lack of Understanding Based on Special Characteristics of a Group of Consumers

Similarly, the CFPB has alleged that a structured-settlement factoring company (one that exchanges a portion of a consumer’s future payment streams in exchange for a discounted immediate sum) took unreasonable advantage of consumers’ lack of understanding of the material risks, costs, or conditions of such advance loans.169 Many of the consumers were victims of lead-poisoning who had cognitive impairments.

Federal Deception Law: 3.2.4.5.3 Consumers Unable to Protect Their Own Interests When They Have No Choice

Consumers cannot protect their own interests when the consumer has no choice as to a transaction. The CFPB has obtained an administrative consent order where prison or jail authorities required recently incarcerated individuals to receive funds on release on one company’s prepaid card and consumers could not close the card without paying a fee. The prepaid card included various other fees.189

Federal Deception Law: 3.2.4.5.4 Consumers Unable to Protect Their Own Interests When Coercion Prevents Choice

Consumers cannot protect their own interests where their financial circumstances or other factors are so coercive as to leave the consumer with little choice. A federal court has found that ITT, a for-profit school, engaged in such abusive conduct. It took unreasonable advantage of students in the school’s lending practices by giving students little choice after enrollment but to take out new high-priced private loans with ITT.

Federal Deception Law: 3.2.4.5.5 Consumers Unable to Protect Their Own Interests When Important Information Is Withheld

The CFPB has issued a complaint where it alleged that a tax preparer took unreasonable advantage of consumers’ inability to protect their own interests where it did not disclose that it was already holding the consumer’s tax refund, and instead convinced the consumer to take out a loan in lieu of receiving the refund. The tax preparer also did not disclose that it had a financial interest in the loans that it encouraged the consumers to take out.200

Federal Deception Law: 3.4.7 Servicing of the Public Service Loan Forgiveness Program for Federal Student Loans

The CFPB has issued a bulletin concerning the practices of private entities in their servicing of the Public Service Loan Forgiveness (PSLF) Program for federal student loans.244 Under the PSLF Program, borrowers with federal Direct Loans who make 120 qualifying monthly payments while working full-time in public service employment are eligible for loan forgiveness.245 The Department of Education hires pri

Federal Deception Law: 3.4.8 Motor Vehicle Repossessions

The CFPB has issued a bulletin on mitigating harm from repossession of automobiles.247 As the bulletin sets out, it is unfair to offer a delinquent borrower an option to avoid repossession and then to repossess the vehicle even though the borrower has completed the option—unless the completion of the option is too close in time for the creditor to stop the repossession.

Federal Deception Law: 3.4.9 Impeding Consumer Reviews of Products or Services

The CFPB has issued a bulletin concerning unfair or deceptive practices that impede consumer reviews of products or services.254 It is unfair and deceptive to utilize unenforceable contractual restrictions that appear to limit consumers’ ability to leave reviews. It is also unfair and deceptive to use unenforceable contractual restrictions to pressure consumers to remove their reviews.