Vocabulary 3–4 and Exercises 3a–4a in case of difficulties.

TEXT 3

Consumer Transactions in General. Consumer transactions are common and often

dependent upon the use of credit. Credit is expensive. Most consumer transactions are cov-

ered by both state and federal law.

Currently, Ohio law allows an interest rate up to and including an annual percentage

rate of 25 percent as an alternative to other statutory methods of computing the annual per-

centage rate for, among others, retail installment sales, revolving charge accounts (credit

cards), and small loans. Any interest rate is not a required rate. Interest rates are subject

to market pressure and to negotiation. Buyers should shop for low interest rates and low

finance charges in the same way they shop for low prices

Buyers are entitled to: read all parts of an application or contract, all disclosure state-

ments; ask questions about all aspects of such documents which are not absolutely clear;

and obtain satisfactory answers to all questions. If a buyer does not understand any docu-

ment, he should ask for, and obtain, an opportunity to study the document, or have his at-

torney study the document. Denial of information or assistance, or difficulty in obtaining

information or assistance, should alert the buyer that there may be problems.

Both state and federal laws concern the rescission (cancellation) of many kinds of

consumer transactions within a certain period after receiving the goods or services. The

time for exercising the right of rescission is normally very short, for example, within three

days of receiving the goods or services. Under the consumer laws, a buyer has the right to

assert all defenses against any person or entity to whom the seller has transferred buyer’s

contract or note.

TEXT 4

Disclosure to the Buyer. In most consumer transactions, the buyer will receive a dis-

closure form. Disclosure forms vary. Sellers and lenders may, with certain limitations,

modify the disclosure forms, and the forms may be separate from the contract, or part of the

contract. Where a consumer transaction is based upon a revolving charge account (credit

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card) transaction, the buyer must be given a disclosure statement before the account is

established. Such disclosure forms are analogous to the regular forms, but are specifically

designed for these transactions.

The disclosure form contains only that information required by the Truth in Lending

Law; it is not the entire contract. For example, if you buy a car, the disclosure form does

not identify the make, model, color, or serial number of it.

Buyers should obtain and study the disclosure form and contract prior to making a final

commitment. A disclosure form would show, among other things, that the Annual Percent-

age Rate (APR), for example, is 14.84 percent, and the Finance Charge is $ 1,496.80, that

is, it costs $ 1,496.80 to finance $ 6,107.50 under this contract for three years at an APR

of 14.84 percent. Continuing, the disclosure form would show: the total amount, including

down payment, that buyer will pay; the number, amount, and date when payments are due;

that credit life insurance will be purchased and it will cost $ 120.00; the seller will retain

a security interest in the car (the car may be repossessed and sold by seller if buyer fails to

make payments); certain filing fees will be paid; late charges will be assessed; and if buyer

completes all payments before three years, buyer will not have to pay a penalty and may

be entitled to a refund.

Exercise 9. Work in pairs. Study the Vocabulary below and then translate the fol-

lowing texts into English.