Under Rules Created by the FTC in the 1970s

question 7

Multiple Choice

Under rules created by the FTC in the 1970s:

• A) Finance companies that have purchased negotiable installment notes from a seller are not subject to the claims and defenses that a debtor could assert against the seller, and therefore have all the rights of an HDC.
• B) Finance companies that have purchased negotiable installment notes from a seller are subject to the same claims and defenses that a debtor could assert against the seller, and do not have the rights of an HDC.
• C) A subsequent holder who knows a check was dishonored when he purchased it may not receive payment under the Shelter Principle.
• D) A subsequent holder may not receive payment on a check that was dishonored even if he was not aware it was dishonored when he purchased it.
• E) Finance companies may avoid a debtor's claims and defenses if they can prove they and the transferor company were not closely connected and they had no knowledge of the seller's promises.

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Definitions:

John Mitchell

An American labor leader and president of the United Mine Workers of America (1898-1908), known for his role in the labor movement and efforts to improve workers' rights.

Industrial Liberty

The notion of freedom within the context of industrial development, often referring to labor rights, economic opportunities, and the ability to innovate and compete in a market economy.

Ludlow Massacre

An event in 1914 where a violent conflict between striking coal miners and the Colorado National Guard resulted in numerous deaths, including women and children.

Rockefeller-Owned Companies

Enterprises and corporations that were owned or controlled by John D. Rockefeller, most famously including Standard Oil, which played a significant role in the development of the U.S. oil industry.