On a note that forms part of a consumer's contract to buy goods for personal use, the notice in the contract required by FTC Rule 433 places an HDC of the note in the position of a contract assignee.

Question

Quizplus · Accepted Answer

The FTC Rule 433, also known as the Holder in Due Course (HDC) Rule, requires that consumer credit contracts include a notice that any holder of the contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services. This effectively places an HDC in the position of a contract assignee, limiting their ability to be insulated from claims and defenses the consumer has against the seller.

On a Note That Forms Part of a Consumer's Contract