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Fair Credit Reporting: 17.3.4.4 Legislative Intent

Retailers typically argue that the legislature could not have intended that they be included under the state credit repair law. The legislature’s specific list of entities that are exempt is, however, strong evidence that others are not exempt.433 In addition, there are good reasons why a legislature would want a state credit repair law to apply to dealers who arrange credit. These sellers often make most of their profit through arranging credit, not selling goods or services.

Fair Credit Reporting: 17.3.7 State Enforcement

The typical state credit repair statute permits state enforcement, including restitution of fees paid by consumers, as well as a private cause of action.453 States also can enforce the federal CROA,454 and there may be advantages to the state to bring both state and federal statutes in a single suit.

Fair Credit Reporting: 17.3.8 Federal Preemption

The federal CROA provides that it does not annul, alter, affect, or exempt any person subject to its provisions from complying with state laws except to the extent that the state law is inconsistent with the federal law, and then only to the extent of the inconsistency.455 This language is essentially identical to the general preemption provision (but not the special preemption provisions) of the Fair Credit Reporting Act456 and the preemption provisions of the Truth in Lending Act,

Fair Credit Reporting: 17.4.2 Federal Telephone Consumer Protection Act

The federal Telephone Consumer Protection Act of 1991500 provides certain protections against telemarketing calls. It has no restrictions specifically aimed at credit repair clinics, but has general restrictions that fraudulent credit repair clinics may violate. It is discussed in detail in another NCLC treatise.501

Fair Credit Reporting: 17.4.3 State Telemarketing Statutes

Almost all states have their own telemarketing laws that afford a private cause of action to consumers.513 Most of these statutes do not place special restrictions on credit repair clinics, but in many cases a credit repair clinic that has conducted a sale over the telephone will have violated one of the more general prohibitions of the state telemarketing statute. For example, many require specific disclosures and a written contract or confirmation of the transaction.

Consumer Arbitration Agreements: 4.1.1 Introduction

The Federal Arbitration Act (FAA) was not enacted to force parties into arbitration, but to enforce parties’ voluntary agreements to arbitrate specified disputes. “Arbitration is simply a matter of contract between parties; it is a way to resolve disputes—but only those disputes—that the parties have agreed to submit to arbitration.”1

Consumer Arbitration Agreements: 4.3.1 Assent by Signing the Agreement

“Assent must be manifested by something. Ordinarily, it is manifested by a signature.”30 Subject to a number of defenses described in this subsection, a party that signs an arbitration clause, as with any other agreement, is deemed to have assented to it, even if the party later claims they did not intend to agree to arbitration.31

Consumer Arbitration Agreements: 4.3.4.2 Click-Wrap

A “click-wrap” is one type of electronic agreement. The full agreement is presented on the digital screen, in a scrolling window, or via hyperlink, and the consumer cannot proceed further in making a purchase, downloading software, or otherwise completing the transaction without first clicking a button stating “I agree” or similar language. Courts have generally found such click-wrap agreements to be valid and enforceable.73

Consumer Arbitration Agreements: 4.3.4.1a Proof the Individual Visited the Website

The defendant has the burden of proof to show that it was this consumer that clicked on the website, and not some other person or even the entity operating the website impersonating the consumer.70 Even when the defendant presents evidence that the consumer was the one visiting a website, such evidence may end up being bogus or even fraudulent in a surprising number of cases.

Consumer Arbitration Agreements: 4.3.4.1 General

Arbitration agreements are increasingly being presented to consumers and workers electronically, often when the consumer or worker visits a website.59 The rules as to the formation of such electronic arbitration agreements are the same as for paper ones—the agreement is not binding unless properly formed under state law.

Consumer Arbitration Agreements: 4.3.4.3 Sign-in-Wrap

A “sign-in-wrap” agreement is like a click-wrap agreement in that the consumer must click a button to agree to a transaction, and text somewhere on the page informs consumers that by pressing the button the user assents to the linked terms and conditions. But sign-in-wrap agreements differ from click-wrap agreements in that the button the user is clicking is not labeled “agree” or “accept,” and is a button the user would have had to press anyway in order to obtain the desired service or product.

Consumer Arbitration Agreements: 4.3.4.4 Browse-Wrap

“Browse-wrap” agreements do not require the consumer to take a specific action to agree to the terms before proceeding with the transaction. Instead, a notice (which may be more or less conspicuous) is provided on the website, stating that the actual terms of the agreement are found elsewhere on that or some other website. To review the terms, the consumer must click on one or more hyperlinks, but the consumer is allowed to complete the transaction without clicking on those hyperlinks.