In which of the following consumer credit transactions does the FTC HDC rule apply?
A)when the buyer signs a sales contract that includes a check
B)when the buyer signs a sales contract that includes a promissory note
C)when the buyer signs an installment sales contract that does not contain a waiver of defenses clause
D)when the buyer arranges financing with a third-party lender

Question

Quizplus · Accepted Answer

The FTC HDC (Holder in Due Course) rule applies when the buyer signs a sales contract that includes a promissory note. This rule provides protection for purchasers of promissory notes who bought them in good faith and without notice of any problems with the payment, such as a dispute or fraud. The rule limits the defenses that the debtor can raise against the purchaser of the promissory note, who is known as the holder in due course.

In Which of the Following Consumer Credit Transactions Does the FTC