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US 16 CFR Part 433: Preservation of Consumers Claims and Defenses (FTC Holder Rule)

US 16 CFR Part 433 (the FTC Holder Rule) requires consumer credit contracts to include the Holder Notice preserving consumer claims and defenses against…

What US 16 CFR Part 433: Preservation of Consumers Claims and Defenses (FTC Holder Rule) requires

US 16 CFR Part 433 (the FTC Holder Rule) requires consumer credit contracts to include the Holder Notice preserving consumer claims and defenses against subsequent assignees and holders of the credit obligation. The Notice (15-point or larger bold type) effectively abrogates the holder-in-due-course doctrine for consumer credit transactions by allowing consumers to assert against the holder any claim or defense the consumer could assert against the seller. The Rule applies to sellers of consumer goods or services who arrange or accept consumer credit; violation is an unfair or deceptive practice under FTC Act Section 5. Recovery is limited to amounts paid under the contract. The FTC 2019 advisory opinion clarified that consumers may seek affirmative recovery up to amounts paid.

Pillar: Sales, Marketing & PR · Authority: US FTC · Version: 1.0.0 · Last updated:

Primary source: https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-433

SHA-256 integrity: 15e86291c7b4e66aeb3a3be2a0e90e1767c46f96f565dfc61454be3c492f763e

Primary Citations — 5 traced to source

  • US 16 CFR Preservation of Consumers Claims and Defenses (Holder in Due Course Rule)
  • US 16 CFR § 433.1 Definitions

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