FTC holder rule in Ohio

1998In support, ITT cites Hardeman v. Wheels, Inc. (1988), 56 Ohio App.3d 142 , 565 N.E.2d 849 , in which the court found that, because liability imposed derivatively against a lender under the FTC holder rule is not based on the lender’s own misconduct, and because punitive damages are assessed to punish conscious wrongdoing, an award of treble damages under R.C. 1345.09 against a culpable party may not be imposed derivatively under Section 433.2, Title 16, C.F.R.

1998In support, ITT cites Hardeman v. Wheels, Inc. (1988), 56 Ohio App.3d 142 , 565 N.E.2d 849 , in which the court found that, because liability imposed derivatively against a lender under the FTC holder rule is not based on the lender’s own misconduct, and because punitive damages are assessed to punish conscious wrongdoing, an award of treble damages under R.C. 1345.09 against a culpable party may not be imposed derivatively under Section 433.2, Title 16, C.F.R.

2005A financial institution may not "evade the remedial reach of the FTC holder rule simply by omitting the required notice." Id. {¶ 11} In the instant case, though, we further conclude that the Credit Union bears no derivative liability for its failure to incorporate this language into the contract, as the FTC holder rule was inapplicable to the transaction.

2005Id. (citations omitted). {¶ 9} As a threshold matter, we find that FTC holder rule language was not incorporated into the contract at issue in the present case.

2005The FTC holder rule "shifts the risk of seller misconduct to creditors who could [better] absorb the costs of misconduct." Primus Auto Financial Services v. Brown, Hamilton App. No. C-0405993, 2005-Ohio-5207, ¶ 7 .

2004It is under this exception to the CSPA that Roberts makes her argument. {¶ 20} The FTC holder rule is codified in FTC regulation 16 C.F.R. 433.2 , which provides in relevant part: In connection with any sale or lease of goods or services to consumers, in or affecting commerce as "commerce" is defined in the Federal Trade Commission Act, it is an unfair or deceptive act or practice . . . for a seller, directly or indirectly, to: (a) Take or receive a consumer credit contract which fails to contain the following provision in at least ten point, bold face, type: NOTICE Any holder of this consumer

2004Milchen v. Bob Morris Pontiac-GMC Truck (1996), 113 Ohio App.3d 190 , 197 .

1996Maberry v. Said, 911 F.Supp. at 1402 . *196 Bank One argues that the inclusion of the FTC language in the bank note still does not render a financial institution liable under the CSPA for the acts of third parties.

1996Instead, the court in Vannoy based its conclusion upon a footnote in Blon v. Bank One, Akron, N.A., 35 Ohio St.3d 98 , 519 N.E.2d 363 . 5 The facts in Blon are distinguishable from those in the case at bar.

1996Instead, the court in Vannoy based its conclusion upon a footnote in Blon v. Bank One, Akron, N.A., 35 Ohio St.3d 98 , 519 N.E.2d 363 . 5 The facts in Blon are distinguishable from those in the case at bar.

1996In Vannoy v. Capital Lincoln-Mercury Sales, Inc. (1993), 88 Ohio App.3d 138, 145 , 623 N.E.2d 177, 182-183 , the Ross County Court of Appeals refused to hold a financing bank liable for alleged CSPA violations committed by an automobile dealer, stating that because the CSPA exempts transactions between financial institutions and their customers, “[i]t follows that [the bank] cannot be held liable for any damages awarded for violation of the Consumer Sales Practices Act by [the auto dealer].” However, this case fails to address, or even mention, the applicability of the FTC holder rule.

1996In Vannoy v. Capital Lincoln-Mercury Sales, Inc. (1993), 88 Ohio App.3d 138, 145 , 623 N.E.2d 177, 182-183 , the Ross County Court of Appeals refused to hold a financing bank liable for alleged CSPA violations committed by an automobile dealer, stating that because the CSPA exempts transactions between financial institutions and their customers, “[i]t follows that [the bank] cannot be held liable for any damages awarded for violation of the Consumer Sales Practices Act by [the auto dealer].” However, this case fails to address, or even mention, the applicability of the FTC holder rule.