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The FCRA, FTC, & the Delegation Doctrine

Please discuss those 3 questions below:

Q1: In October, Renie Guimond discovered that her credit report at TransUnion Credit Information Co. incorrectly stated that she was married, used the name "Ruth Guimond," and had a credit card from Saks Fifth Avenue. After she reported the errors, TransUnion wrote her in November to say that it had removed this information. However, in March, TransUnion again published the erroneous information. The following October, TransUnion finally removed the incorrect information from her file. Guimond was never denied credit because of these mistakes. Is TransUnion liable for violating the Fair Credit Reporting Act?

Q2: Sears, Roebuck & Co. adopted a new advertising program to boost sales of its Lady Kenmore dishwashers. The new ads claimed that these dishwashers "completely eliminated" the need for rinsing dishes before placing them in the dishwasher. The owner's manuals accompanying the machines, however, recommended pre-rinsing. Interviews with consumers indicated that pre-rinsing was still required for truly clean dishes. In an action against Sears, the Federal Trade Commission (FTC) held that the advertising was misleading. The FTC's remedial order required that Sears keep records to support all future advertising claims for all "major home appliances" and submit them to the FTC. Sears conceded that its dishwasher advertising was misleading but argued that the remedial order, which covered other appliances as well as Lady Kenmore dishwashers, was overly broad and unfair. Discuss fully whether the FTC's broad order is legal.

Q3: Please discuss administrative law and the delegation doctrine

Solution Preview

Let's take a look at the facts in this scenario.

1 -- Renie discovered that her credit report incorrectly stated that she was married, her name was Ruth, and that she had a credit card at a department store (which also shows aspects of identity theft). She reported the incorrect information to the credit reporting agency, and the agency stated they would remove the information. They didn't remove it until one year after it was first reported. Renie was never denied credit due to the false information. Is the credit reporting agency liable?

Yes. The consumer reporting must be in compliance with FCRA. As part of the FCRA, each agency must also comply with certain standards which include 15 USC 1681(e), Section B. This section states (quoted directly), "Whenever a ...

Solution Summary

This solution explains each of the three business law questions presented. The liability on behalf of Trans Union is discussed in the first question. In the second question, the appropriateness of the FTC order is discussed with a final conclusion based on law. This solution also explains the delegation doctrine in relation to administrative law.