Under Rules Created by the FTC in the 1970s

Multiple Choice

Under rules created by the FTC in the 1970s:

A) Finance companies that have purchased negotiable installment notes from a seller are not subject to the claims and defenses that a debtor could assert against the seller, and therefore have all the rights of an HDC.
B) Finance companies that have purchased negotiable installment notes from a seller are subject to the same claims and defenses that a debtor could assert against the seller, and do not have the rights of an HDC.
C) A subsequent holder who knows a check was dishonored when he purchased it may not receive payment under the Shelter Principle.
D) A subsequent holder may not receive payment on a check that was dishonored even if he was not aware it was dishonored when he purchased it.
E) Finance companies may avoid a debtor's claims and defenses if they can prove they and the transferor company were not closely connected and they had no knowledge of the seller's promises.