Key Terms
Consumer law
Area of law covering consumer transactions — credit, goods, real property, or services obtained for personal, family, or
Consumer protection laws
Laws designed to protect consumers against unfair trade and credit practices and against faulty or dangerous goods.
Debtor
Someone who owes an obligation to another individual or business, especially the obligation to pay money. A consumer bec
Purpose
Prevent abusive practices by debt collectors.
Credit bureau
An organization that maintains and distributes information about a person's creditworthiness to creditors, insurance com
Credit freeze
Consumer restricts or prohibits creditors from requesting their credit report. Third parties cannot access the report wi
Preauthorized transfer
An electronic fund transfer authorized in advance to recur at regular intervals. Example: automatic monthly mortgage pay
Fraud alert
Posted with credit bureaus; included in the consumer's credit report. Requires businesses to verify the identity of any
CFPB
Created by Congress in 2010. Single point of contact for consumers seeking financial consumer protection.
Note
Additional federal and state agencies also have consumer protection authority. The CFPB is not the only enforcement body
Four categories of purchaser protection
1. Labeling and packaging — labels must be truthful; regulations cover comparison, injury prevention, access prevention,
Puffery
Broad promotional statement not intended to be taken literally ("best in its class," "nobody beats us"). Legal as long a
Bait and switch
Advertising a low-priced product to lure consumers in, then pushing a higher-priced product. The advertised product is e
These laws exist because the alternative is worse
Aggressive collectors calling at midnight, lenders hiding rates in fine print, credit files that nobody can see or chall