Effective January 1, 2011, the FTC’s Risk-Based Pricing Rule imposes a new disclosure requirement on creditors. This new rule was motivated by a concern that, because consumers are entitled to “adverse action” notices under the Fair Credit Reporting Act only when they are denied credit (or reject a counteroffer for credit), consumers are not adequately apprised of the effect credit reports have on the pricing of credit.
Tag: Penalties
The FTC “Red Flags” Rule has caused quite a stir in dealership circles. In fact, I’m asked about “Red Flags” more frequently than any other topic. Dealers are concerned about what the rules mean and how they will impact the way they do business.
The Privacy Rule requires financial institutions to give their customers privacy notices that explain the financial institution’s information collection and sharing practices. In turn, customers have the right to limit some sharing of their information.
The federal Truth in Lending Act (TILA) and the accompanying Regulation Z is considered the cornerstone of federal consumer protection laws. For the most part, TILA is simply a disclosure law designed to prevent unscrupulous creditors from preying on consumers. Unfortunately, TILA claims against auto dealers are common and penalties can be steep.