Consumer Credit Protection and Insurance
Case Study #02 (Consumer Credit Protection)
A bank is a profit making organization and therefore authorizes loans when it is satisfied that the borrower will be able to return the principal and interest borrowed, under all probable circumstances as can be thought of. It appears that the first bank thought that granting a loan to Martha will become a NPA (Non-Performing Asset) and therefore declined. The second bank perhaps does not investigate the loan applicant’s probable repayment capacity with the same vigor as the first bank, and approved her loan. However, when Martha defaulted, the first bank has been proved right. It appears that Martha’s refusal by the first bank had more to do with her repayment capacity that because of any racial or demographic issues.
After Martha’s default, the second bank chose to collect their money through a collection agency. They caused Martha severe mental and physical distress, the upshot of which was Martha lost her job. Martha can sue the collection agency and the bank under " the Fair Debt Collection Practices Act (FDCPA), U.S.C. § 1692 et seq. The FDCPA provides debtors with a means for challenging payoff demands, and for determining the validity and accuracy of asserted debts. 15 U.S.C. §1692g. The FDCPA establishes ethical guidelines for the collection of consumer debts.” (Fair Debt Collection Practices Act,n.d.)
It is clear that the debt collection was in fragrant violation of the FDCPA and Martha can easily file a case against the debt collector, since harassment to the tune of disturbing Martha’s work performance, clearly means that the clauses of the FDCPA were being violated. However, coming back to the actual debt, Martha should meet the bank and both parties should work out a repayment schedule which is possible for Martha. This is because as Martha has lost her job, her capability to repay has been affected. Without knowing further details, it is not possible to guide Martha as to what she can legally do further, for her best interests.
Legal Information Institute. (n.d.) . “Fair Debt Collection Practices Act (FDCPA): A Brief Overview of Federal Law”, Cornell University Law School. Accessed at the Internet on 10/17/2014 <URL http://www.law.cornell.edu/wex/fair_debt_collection_practices_act>
Case Study #03: Insurance
In the case of “Job related accidents”, it is Franco whose insurance will be liable to pay damages caused by Chris, even though Chris caused the accident. The law says “Employers are vicariously liable under the doctrine of "respondeat superior" for the negligent acts or omissions by their employees in the course of employment.”( An Employer's Liability for Employee's Acts; Findlaw.com, n.d.). There is however, a difference, between the employee whose intention is to carry out official work and the employee who is using the employer’s car for his personal work. In the latter case, the doctrine of “vicarious liability” will not be applicable. This is however not the case in Chris’ case. He causes the accident while delivering pizzas which is Franco’s work. In the state of North Dakota, driving licenses can be issued at the minimum age of 16 which permits Chris to drive without any restrictions. However, even if Chris had been driving without a license, Franco would still have been liable as it is the employer’s responsibility to find out that information before asking him to drive a car.
Vicarious liability is not applicable in cases of road accidents alone but is also applicable to employer-employee relations in the workplace, harassment including sexual harassment. The Supreme Court has however held that for an employee to hold the employer responsible because of the misconduct by a supervisor will only be applicable in case the supervisor has the power to transfer, discipline, hire, fire, failing to promote etc. the employee. Cases referred