Practice Consumer Law

Default And Collection Practices

Match the words on the left with the correct definition on the right:

Default	the act or an instance of choosing or deciding.
Bankruptcy	restriction on expenditure.
Option	failure to meet a financial obligation.
On a budget	great.
Assets	working person.
Enormous	result or effect of some previous occurrence.
Wage earner	the property available to an executor or adminis-
	trator for settlement of the debts and payment of
	legacies of a deceased person's estate any prop-
	erty owned by a person or firm.
Consequence	procedure through which a person places assets
	under the control of a federal court in order to be
	relieved of debt.

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UNIT 26.

Creditor Collection Practices

Read and translate the texts.

Creditors have many ways of collecting money from consumers who are unwilling or unable to pay their debts. It is understandable that creditors will take action to recover money or property owed them. However, in the past, some bill collectors engaged in unsavory practices. As a result, some debtors suffered family problems, lost their jobs, and had their privacy invaded.

These practices prompted Congress to pass the Fair Debt Collection Practices Act in 1978. This act protects consumers from abusive and unfair collection practices by professional debt collectors. It does not apply to creditors collecting their own bills. Under the act, the debt collector’s communications are limited to reasonable times and places. False or misleading statements as well as acts of harassment or abuse are strictly prohibited.

Calls and Letters. If you receive unreasonable or harassing phone calls or letters from a debt collector, you should report the collection practice to the Federal Trade Commission or to your local consumer protection agency. Under federal law, you can send bill collectors a notice demanding that all collection contacts cease. You might still owe the money, but the collection contacts would have to stop. You should also consider contacting the phone company, which has the power to remove telephones from anyone using them for harassment.

Repossession. As mentioned earlier, consumers sometimes post collateral when they take out a loan or sign credit sales contracts. The creditor can usually repossess, or take back, the collateral if the borrower defaults on the loan or obligation. Most states do not permit creditors to repossess if repossession would involve violence or a breach of the peace.

Once the collateral has been repossessed, the creditor can sell it and then apply the proceeds of the sale to the amount owed. Debtors

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are also charged for any costs incurred in the repossession and sale. After the sale, the debtor is entitled to get back any amount received by the seller that is in excess of the amount owed (plus expenses). However, if the sale brings in less than the amount owed (plus expenses), the debtor must still pay the difference.

Court Action. As a last resort, creditors may sue debtors in court for the exact amount owed on the debt. At times, the trouble and expense of suing in court make creditors avoid this method. However, creditors often sue debtors in small claims court.

Just because you are sued does not mean the creditor is entitled to collect the disputed amount. Consumers often have legitimate defenses, such as the fact that the goods were defective. As a result, if you ever receive a summons to go to court, don’t ignore it. If you cannot appear in court on the date set in the summons, contact the court clerk in advance to arrange for a postponement of the trial. In addition, contact a lawyer immediately. If you are unable to afford one, you may call the local legal services or legal aid office.

The main thing to avoid when being sued is a default judgment. This is a judgment entered for the plaintiff (creditor) and against the defendant (debtor). Most default judgments occur because the defendant simply fails to show up in court.

Garnishment and Attachment. A creditor who wins a court judgment against a consumer may still have trouble collecting if the consumer does not pay voluntarily. It was once common practice to have people imprisoned for not paying debts; however, this is no longer allowed.

One solution creditors use is to get a court order that forces the debtor’s employer to withhold part of the debtor’s wages and pay it directly to the creditor. This is called garnishment. The federal Wage Garnishment Act limits the amount that can be garnished to 25% of the debtor’s take–home pay (pay after taxes and social security deductions). Persons who are employed by the federal government or who receive other federal money, such as welfare or unemployment compensation, cannot have their income garnished (unless the money is used to meet court–ordered child support payments). The act also prohibits employers from firing

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employees who have their wages garnished for a single debt. State laws may further limit and sometimes completely prohibit garnishment.

Creditors can also get possession of a debtor’s money or property by attachment. This is a court order that forces a bank to pay the creditor out of a consumer’s bank account or that allows the court to seize the consumer’s property and sell it to satisfy the debt.

Find the equivalents of the following words and expressions in the text.

Получать деньги; возвращать деньги; быть замешанным в грязные дела; вмешаться в личную жизнь; побуждать; агент по взысканию долгов; притеснение; оскорбительный теле- фонный звонок; контракт о сборе денег расторгнут; наруше- ние общественного порядка; превышать сумму долга; закон- ная защита; юридическая консультация; заочное решение су- да; истец; ответчик; наложение ареста на деньги должника, находящиеся у третьего лица; пособие по безработице; кон- фисковать имущество.

Answer the questions:

1.What ways of collecting money from consumers who are unwilling or unable to pay their debts do creditors have?

2.What act protects consumers from abusive and unfair collection practices by professional debt collectors? What was it prompted by?

3.Does this act apply to creditors collecting their own bills?

4.What is limited and prohibited under this act?

5.What is repossession?

6.Why should people avoid a default judgment when being sued?

7.What is the difference between garnishment and attachment?

8.Who cannot have their income garnished?

9.Why may state laws further limit and sometimes completely prohibit garnishment?

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Creditor Collection Practices

Match the words on the left with the correct definition on the right:

Invade	complainant.
Prompt	court order that forces the debtor’s employer to
	withhold part of the debtor’s wages and pay it
	directly to the creditor.
Plaintiff	urge.
Defendant	take possession.
Garnishment	violate.
Attachment	accused.
Seize	court order that forces a bank to pay the creditor
	out of a consumer’s bank account or that allows
	the court to seize the consumer’s property and
	sell it to satisfy the debt.

Problem–solving:

The Missed Payment

Orlando buys a used car from Top Value Cars for $1,200 and signs a contract calling for monthly payments for three years. After paying – $800, he misses a payment because of large doctor bills. Leaving home one morning, he finds that the car is gone. Top Value has hired someone to repossess the car in the middle of the night.

Problem–solving:

a.Assume that Top Value sells the car for $500 and incurs expenses of $200 in the repossession and sale. Will Orlando get money back, or will he still owe money to Top Value (even though he no longer has the car)? How much is owed, and to whom?

b.Is the action taken by Top Value legal? Do you think the repossession laws are fair? What arguments could creditors make in support of these laws? What arguments could debtors make against them?

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Revision Tasks and Achievement Tests.

UNIT 1. What is Law?

1. Сomplete the sentences, using the appropriate words:

a – unwritten; b – affect; c – lawless; d – confusion and disorder; e – enforced; f – exist; d – society

1.Many definitions of law…

2.Law can be defined as the rules and regulations made and … by government.

3.The government makes laws that … almost every aspect of daily life.

4.Every … that has ever existed has recognized the need for laws.

5.Laws may be ...

6.Americans held the erroneous view that the societies were...

7.Without laws, there would be…

2.Are the statements true (+) or false (–)? Correct the false statements.

1.There are a few definitions of law.

2.Law can be defined as the rules and regulations made by people that regulate the conduct of them within a society.

3.Laws affect almost every aspect of daily life.

4.Every society has recognized the need for laws.

5.The laws are always written.

6.Pre–industrial societies were lawless.

7.Laws are frequently fair and even good.

8.With laws confusion and disorder are impossible.

Kinds of Laws

1. Сomplete the sentences, using the appropriate words:

a – felonies; b – the penalty; c – award; d – wronged or injured; e – committed the wrong; f – a legal action; g – misdemeanors; h – term; i– everyday situations .

1.A criminal case is… brought by the government against a person charged with committing a crime.

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Revision Tasks and Achievement Tests.

2.Lawsuit can be brought by a person who feels … by another person.

3.Criminal offenses are divided into … and ...

4.… for a felony is a term of more than one year in prison.

5.For a misdemeanor, the penalty is a prison … of one year or less.

6.Courts may … the injured person money for the loss.

7.Civil laws regulate many ...

8.Courts may award the injured person money for the loss, or they may order the person who … to make amends in some other way.

2.Are the statements true (+) or false (–)? Correct the false statements.

1.Laws fall into three major groups.

2.Civil laws regulate public conduct and set out duties owed to society.

3.Criminal laws regulate relations between individuals or groups of individuals.

4.Criminal offenses are divided into felonies and misdemeanors.

5.Felonies are less serious crimes such as murder or robbery.

6.Misdemeanors are more serious crimes such as assault or minor theft.

7.An example of a civil action is a lawsuit for recovery of damages suffered in an automobile accident.

8.One action can not violate civil and criminal law at the same time.

UNIT 2. Law and Values

1. Сomplete the sentences, using the appropriate words:

a – wealth; b – balance; c – illegal; d – shoplifting; e – right; f

–promote; g – goals; h – society; i – wrong; j – benefits; k – reflect.

1.Laws generally reflect and …a society’s values.

2.Laws against murder … the moral belief that killing another person is wrong.

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3.Not everything that is immoral is also ...

4.People expect their legal system to achieve many ...

5.Laws must …rights with responsibilities.

6.Moral values deal with fundamental questions of … and ...

7.Economic values deal with the accumulation, preservation, use, and distribution of...

8.The law encourages home ownership by giving tax … to people who borrow money to pay for a home.

9.Laws against … protect property and discourage stealing by

providing a criminal penalty.

10.Social values concern issues that are important to...

2. Are the statements true (+) or false (–)? Correct the false statements.

1.Our legal system is influenced by our society’s traditional ideas of right and wrong.

2.Everything that is immoral is also illegal.

3.Lying to a friend may be illegal but is seldom immoral.

4.We expect our legal system to achieve many goals: protecting basic human rights, promoting fairness, helping resolve conflicts, promoting order and stability, representing the will of the majority, and protecting the rights of minorities.

5.Conflicts among these goals cause many of society’s most difficult problems.

6.The law can protect the rights of some without violating the rights of others.

7.Political values concern issues that are important to society.

8.Social values can never change.

9.Few laws combine moral, economic, political, and social values.

10.Laws against theft deal with the political issue of stealing, the social issue of protection of property, the moral issue of how government punishes those who violate criminal statutes, and the economic issue of respecting the property of others.

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Revision Tasks and Achievement Tests.

UNIT 3. Consumer Law.

1. Сomplete the sentences, using the appropriate words:

a – smart; b – protection; c – splurge; d – caveat emptor; e – mislead; f – response; g – rights; h – agreement; i – informed; j – consumer.

1.A … is a person who buys goods and services for personal or household purposes from a seller.

2.When sellers agree to provide and consumers agree to pay for goods or services, the parties have entered into a legal ...

3.For many years, consumer law was characterized by the legal expression…

4.Consumers now have a right to be correctly … of important information.

5.Sellers must avoid sales and advertising practices that…, deceive, or are otherwise unfair to consumers.

6.The best … is still a careful purchase.

7.While consumers have many …, they also have responsibilities.

8.… consumers understand the factors that influence their shopping habits.

9.Sometimes consumers … and buy things they really don’t need.

10.Consumers often buy things in …to advertising.

2. Are the statements true (+) or false (–)? Correct the false statements.

1.A consumer is a person who buys goods and services from a seller.

2.When sellers agree to provide and consumers agree to pay for goods or services, the parties have entered into a contract.

3.Consumers now do not have a right to be correctly informed of important information, such as quality, price and credit terms.

4.The worst protection is a careful purchase.

5.Sellers are seldom better informed about the products or services being offered.

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6.Consumers have a right to be fair and honest.

7.If you fall victim to a deceptive practice, all is not lost.

8.When you can’t solve the problem yourself, the law may provide a remedy.

9.Smart consumers think about whether they need the product, whether they can afford it, and how they can purchase it carefully.

10.Many ads provide useful information about products or announce the start of a sale.

UNIT 4. How Laws Protect the Consumer

1. Сomplete the sentences, using the appropriate words:

а – discrimination; b – harmful; c – establishments; d – prohibit; e – access; f – remedies;

g – standards; h – enforce; i – marketplace; j – passed

1.Congress has ... many consumer protection laws.

2.They …unfair or misleading trade practices.

3.Federal laws set …for the quality, safety, and reliability of many goods and services.

4.The Consumer Product Safety Act allows the government to ban, seize, or prevent the sale of … products.

5.The federal government has established many agencies that

…consumer laws and help consumers.

6.Congress passes laws and agencies issue rules to improve the operation of the …

7.A new federal law, the Americans with Disabilities Act (ADA), protects consumers against … on the basis of disability.

8.Consumers who are disabled must have equal …to goods and services.

9.The ADA covers all …that are generally open to the public.

10.State laws give the government power not only to stop unfair and deceptive practices but also to provide consumers with a variety of...

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