Question

Maria Ochoa receives two new credit cards on May 1. She has solicited one of them from Midtown Department Store, and the other arrives unsolicited from High-Flying Airlines. During the month of May, Ochoa makes numerous credit-card purchases from Midtown Department Store, but she does not use the High-Flying Airlines card. On May 31, a burglar breaks into Ochoa’s home and steals both credit cards, along with other items. Ochoa notifies the Midtown Department Store of the theft on June 2, but she fails to notify High-Flying Airlines. Using the Midtown credit card, the burglar makes a $500 purchase on June 1 and a $200 purchase on June 3. The burglar then charges a vacation flight on the High-Flying Airlines card for $1,000 on June 5. Ochoa receives the bills for these charges and refuses to pay them. Discuss Ochoa’s liability for the charges.

Answer 1

The truth in Lending Act is the act that prohibits the lender from issuing unsolicited credit card. It protect the individual from deceptive and abusive practices by credit card issuers.

So the truth in Lending regulations clarified that no credit card may be issued to any individual except : -

• in response to oral or written request or application.
• as a renewal or substitute for accepted credit card.

In this scenario, Maria Ochoa receives unsolicited credit card from High-Flying Airlines for which she is not liable to pay anything as she never requested for the credit card.