ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 44
CONSUMER LAW
44-1A. Debt collection
Yes. The court held that the letter violated the FDCPA because of the “visual effect” of the
44-2A. Equal credit opportunity
The court held that the home improvement contract did not constitute a credit transaction and
therefore was not subject to the antidiscrimination provisions of the Equal Credit Opportunity Act
(ECOA). Under the ECOA, “credit” is defined as “the right granted by a creditor to a debtor to
44-3A. Deceptive advertising
B-2 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 44
Singles. The ALJ therefore ordered Kraft to cease and desist from making these claims. The
FTC commissioners affirmed the order, with some modifications, and Kraft appealed. The U.S.
Court of Appeals for the Seventh Circuit upheld the FTC’s ruling. Kraft’s principal argument on
appeal was that the FTC erred as a matter of law by not requiring actual evidence that Kraft’s
44-4A. Fair debt collection
The court held that the assessment did not qualify as a “debt” within the meaning of the FDCPA.
The U.S. Court of Appeals for the Tenth Circuit reversed this judgment, however, and remanded
the case. The appellate court set out the FDCPA definition of a debt: “any obligation or alleged
44-5A. Fair debt collection
The court granted Credit Bureau’s motion, and the Mahons appealed to the U.S. Court of
Appeals for the Ninth Circuit, which affirmed the judgment of the lower court. The appellate
44-6A. Equal credit opportunity
The borrowers argued in part that Riggs violated the ECOA when it required Marcia’s signature
on the personal guaranty. They claimed that this violated the ECOA’s prohibition on
discrimination on the basis of marital status. The U.S. Court of Appeals for the Fourth Circuit
44-7A. Debt collection
The district court found no violation of the FDCPA. The U.S. Court of Appeals for the Second
Circuit reversed the decision of the lower court and remanded the case. The appellate court
concluded in part that the notice “contained a contradictory message. * * * [T]he back of the
notice provided plaintiff with all the information necessary to contest the claim (as required by
44-8A. Fair debt collection
CrossCheck argued that it was not a “debt collector” within the meaning of the FDCPA. If the
court had accepted this argument, it might have ruled in CrossCheck’s favor. The court
concluded, however, that “[t]here are disputes of material fact concerning CrossCheck’s status
as a ‘debt collector’ under the FDCPA” and denied the motion. The court quoted the FDCPA’s
definition of debt collector: “any person who uses any instrumentality of interstate commerce or
the mails in any business the principal purpose of which is the collection of any debts, or who
44-9A. Deceptive advertising
Deceptive advertising occurs if a reasonable consumer would be misled by a claim. In this case,
the court issued a preliminary injunction, concluding in part that “end70 Corporation and its
president and owner * * * Damien Zamora have engaged in [deceptive] acts and practices that
44-10A. Debt collection
The court issued a summary judgment in favor of Goldman. Cohen appealed to the U.S. Court
of Appeals for the Second Circuit, which affirmed the lower court’s judgment, “concluding that
Cohen’s initiation of a lawsuit in state court seeking recovery of back rent and attorneys’ fees