Tim buys a high-powered tool from binford tools to use on the construction of his own garage. binford tools provides a full warranty on the tool for the first six months. to pay for the tool, tim signs a negotiable promissory note which contains the ftc consumer credit notice. binford properly negotiates the note to first finance. within three weeks, the tool stops working and binford refuses to repair or replace it. in the meantime, first finance demands payment from tim. under the federal trade commission rules, this consumer credit situation means first finance

The Federal Trade Commission enforces credit laws that your protect your right as a customer to obtain, maintain and use credit. Under the FTC Act, the FTC has the power to prohibit unfair and deceptive business practices. Its authority covers mortgage companies and brokers, creditors and also debt collectors. FTC is also in charge of enforcing several other laws that regulate credit, e.g. Truth in Lending Act, the Home Ownership and Equity Protection Act, the Consumer Leasing Act, the Fair Debt Collection Practices Act, and a long list of etc.

In this case, First Financial cannot collect this debt because currently Tim and Binford are in the middle of a dispute over a product's warranty.