A Federal Trade Commission rule limits the rights of a holder in due course of an instrument that evidences a debt arising out of:
A)a consumer credit contract.
B)an insurance contract.
C)a consumer purchase paid for with a check.
D)a construction contract.

Question

Quizplus · Accepted Answer

The Federal Trade Commission rule mentioned in the question is commonly known as the Holder in Due Course (HDC) Rule. The HDC rule applies to instruments that evidence a debt arising out of a consumer credit contract. The purpose of the HDC rule is to protect consumers against unfair debt collection practices by limiting the rights of the buyers of such debts (i.e., the holders in due course). Therefore, the correct answer is A.

A Federal Trade Commission Rule Limits the Rights of a Holder