Under rules created by the FTC in the 1970s:
A)Finance companies may avoid a debtor's claims and defenses if they can prove they and the transferor company were not closely connected and they had no knowledge of the seller's promises.
B)Finance companies that have purchased negotiable installment notes from a seller are subject to the same claims and defenses that a debtor could assert against the seller,and do not have the rights of an HDC.
C)A subsequent holder who knows a check was dishonored when he purchased it may not receive payment under the Shelter Principle.
D)A subsequent holder may not receive payment on a check that was dishonored even if he was not aware it was dishonored when he purchased it.
E)Finance companies that have purchased negotiable installment notes from a seller are not subject to the claims and defenses that a debtor could assert against the seller,and therefore have all the rights of an HDC.

Question

Quizplus · Accepted Answer

A)The FTC created several rules in the 1970s that require every consumer credit contract or any purchase money loan to contain the following statement: Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained pursuant hereto or with the proceeds hereof.Consequently,no subsequent holder of the contract will have the rights of an HDC.

Under Rules Created by the FTC in the 1970s