Word: ftc
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...Consumers may still be sued by holders in due course for payment, but they now have a legal basis for defending themselves. The move will not prevent shoddy merchandise from reaching the marketplace. But since no bank or finance company wants to hire auto mechanics or TV repairmen, the FTC's action should make lenders more wary about buying contracts from merchants who will not stand behind the goods they sell...
Lots of Loans. The FTC'S ruling does not apply to contracts already in effect. Nor does it cover credit-card purchases (consumers are already protected under the Fair Credit Billing Act) or loans that the buyer himself arranges from a third party (an auto loan, say, from a bank). Rather, the regulation is aimed at credit deals set up by the seller -even if the seller only steers the consumer to a certain finance company. That adds up to a lot of business, says the FTC-$122 billion last year alone...
While the rule should inspire consumers to buy with more confidence, it does not please most lenders. Some object to the sweeping language. In reply, the FTC notes that though 40 states have passed laws defining in detail the liability of the holder in due course, few of them were really effective because merchants and lenders found loopholes. Another complaint is that the rule will force small lending institutions to do costly additional work in screening contracts. That, in turn, could lead to higher interest rates and thus harm low-income people who most need installment credit. Perhaps...
Curiously, cereal makers are rather reticent in talking about their recent sales successes. Reason: a Federal Trade Commission investigation that began in 1972 and is likely to wind up in a few months. The FTC is seeking to determine whether Kellogg's, General Mills, General Foods (which markets Post cereals) and Quaker Oats have monopolized the market by flooding it with similar brands and advertising them on a scale that smaller competitors cannot match. The FTC, in other words, suspects that the competition is all a lot of puff; to the cereal makers, it seems only too real...
...FTC has issued one proposal and the first three regulations that manufacturers or retailers must abide by if they offer full warranties for products costing $15 or more. The proposal that is still subject to change is aimed at the used-car business. Among other things, the FTC would require dealers to affix a sticker on each car that they sell. The sticker would have to reveal the car's prior use, private or commercial, and a description of any major work that the dealer had done...