Question 1

Clark goes to the First Bank to obtain a consumer loan.The bank requests that the Rich Credit Reporting Agency furnish a credit report, which they do.Based upon the report, which says that Clark has been convicted of theft and credit card fraud, the bank denies Clark's application.Is Clark entitled to know what was in the report? If Clark thinks the information in the report is inaccurate, what can he do?

Accepted Answer

The Fair Credit Reporting Act applies to credit reports used to secure employment, insurance, and credit.Clark may request and receive from the agency information regarding the nature and substance of all information on him in the agency's files, the sources of the information, and the names of all recipients of the reports for other than employment purposes within the preceding six months.If Clark notifies the reporting agency of disagreement with the accuracy and completeness of information in the file, the agency must reinvestigate within a reasonable time.If reinvestigation proves the information is inaccurate, it must be promptly deleted.If the dispute remains unresolved after reinvestigation, Clark may submit a brief statement setting forth the nature of the dispute that must then be incorporated into the report.

Question 2

Most state attorneys general:

Accepted Answer

A)  help to coordinate lawsuits against a company that has been engaging in fraudulent acts involving more than one state
B)  are active in consumer protection by enforcing laws against consumer fraud through judicially imposed injunctions.
C)  help consumers by enforcing laws that impose restitution.
D)  All of these.E) All of the above
F) A) and C)

Question 3

A cease and desist order, issued by the FTC, directs a party to stop a certain practice or face punishment, such as a fine.

Accepted Answer

A) True 
 B)False

Question 4

The FTC remedy of "affirmative disclosure" would require:

Accepted Answer

A)  a new ad that admits the first ad was false.
B)  providing certain information in a company's ads.
C)  that the advertiser desist from deception in all products it markets.
D)  All of these would be required.E) C) and D)
F) A) and B)

Question 5

The Fair Debt Collection Practices Act prohibits:

Accepted Answer

A)  communication with a debtor who is represented by an attorney.
B)  calls after 6 p.m.
C)  contacting third persons to find out the whereabouts of a debtor.
D)  a creditor from calling a debtor regarding payment of a bill.E) A) and B)
F) C) and D)

Question 6

What are the remedies available for the Federal Trade Commission?

Accepted Answer

A)  Affirmative exemption
B)  Corrective advertising and multiple product orders
C)  Impounding inventory
D)  Fines and monetary penaltiesE) All of the above
F) None of the above

Question 7

The federal Truth-in-Lending law:

Accepted Answer

A)  requires the lender to show how much profit is made on a particular sale.
B)  regulates the maximum cost of credit.
C)  is a uniform law made available to all states, like the UCC.
D)  is intended to allow comparison of various credit offers or advertisements.E) A) and C)
F) A) and D)

Question 8

Under the FCCPA, the liability of a credit card holder for another's unauthorized use of the card is limited to:

Accepted Answer

A)  $500.
B)  $100.
C)  $50.
D)  None of these; liability is unlimited.E) None of the above
F) A) and B)

Question 9

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission:

Accepted Answer

A)  has no power to address the practice.
B)  can require the seller to make additional advertisements to correct it.
C)  can require the company to go out of business.
D)  can report the company to the President of the United States for deregulation.E) B) and C)
F) A) and D)

Question 10

The Credit Card Fraud Act prohibits which of the following practices?

Accepted Answer

A)  Possessing unauthorized cards
B)  Counterfeiting or altering credit cards
C)  Using a card obtained from a third party with his consent when the third party conspires to report the cards as stolen
D)  All of these.E) B) and C)
F) B) and D)

Question 11

In order for advertising to be found deceptive by the FTC, it is necessary that:

Accepted Answer

A)  the advertisement can only be reasonably interpreted in one way, and in that way, it is misleading.
B)  there is a misrepresentation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment.
C)  the sellers have malice or evil intent.
D)  something affirmative was said which was misleading; i.e., an omission cannot be deceptive.E) B) and C)
F) A) and B) B

Question 12

The Federal Trade Commission Act allows the FTC to:

Accepted Answer

A)  determine what constitutes deceptive advertising practices.
B)  prohibit all advertising in certain professions.
C)  require advertisers to contribute to a fund to reimburse injured consumers.
D)  require the independent testing of consumer goods.E) C) and D)
F) A) and B)

Question 13

The Consumer Product Safety Commission:

Accepted Answer

A)  only has the authority to educate the public concerning product safety problems.
B)  uses data it gathers to set uniform product safety standards for goods such as toys and lawn mowers.
C)  can only make manufacturers voluntarily submit their products for testing if the product falls below its regulatory standards.
D)  has no enforcement powers since compliance with its regulations is left up to the manufacturer.E) B) and C)
F) None of the above B

Question 14

Under the Fair Credit Billing Act, if a consumer makes a complaint about the amount on his charge account bill, the store can:

Accepted Answer

A)  immediately bar the customer from any further credit purchases.
B)  report the unpaid amount to a credit-reporting agency as delinquent.
C)  refer the matter to a collection agency for immediate collection.
D)  None of these.E) C) and D)
F) A) and C)

Question 15

If an advertising statement is technically true but may tend to mislead, the FTC can still require a company to stop using it.

Accepted Answer

A) True 
 B)False

Question 16

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 forbids credit card issuers from raising interest rates or any fees during the first year a credit card account is open, and the Act states that gift cards or certificates may not expire sooner than five years after issuance.

Accepted Answer

A) True 
 B)False

Question 17

A typical automobile financing agreement would be a closed-end credit agreement.

Accepted Answer

A) True 
 B)False

Question 18

Homemade Soup Co.has advertised their soup in certain magazines using photographs showing bowls of their soup but with pebbles at the bottom of the bowl.The pebbles were used to displace the soup in the bowl, forcing the vegetables and meat to the surface.This photographer's trick made the soup appear heartier than it was.An FTC staffer is thumbing through the latest edition of her favorite magazine.She notices the Homemade Soup Co.ad and goes to her kitchen, opens a can of Homemade's soup and decides that her bowl of soup looks nothing like the one in the ad.What are the steps the FTC would take to proceed against Homemade Soup Co.?

Accepted Answer

In a typical situation, the FTC discover...

Question 19

One difference between a full and a limited warranty is that in a limited warranty, the manufacturer may, if reasonable, limit the warranty of merchantability to two years.

Accepted Answer

A) True 
 B)False

Question 20

The Federal Trade Commission was created in 1968 in response to the consumer movement of the 1960s.

Accepted Answer

A) True 
 B)False

Exam 41: Consumer Protection

Most state attorneys general:

Correct Answer
verified

A cease and desist order, issued by the FTC, directs a party to stop a certain practice or face punishment, such as a fine.

Correct Answer
verified

The FTC remedy of "affirmative disclosure" would require:

Correct Answer
verified

The Fair Debt Collection Practices Act prohibits:

Correct Answer
verified

What are the remedies available for the Federal Trade Commission?

Correct Answer
verified

The federal Truth-in-Lending law:

Correct Answer
verified

Under the FCCPA, the liability of a credit card holder for another's unauthorized use of the card is limited to:

Correct Answer
verified

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission:

Correct Answer
verified

The Credit Card Fraud Act prohibits which of the following practices?

Correct Answer
verified

In order for advertising to be found deceptive by the FTC, it is necessary that:

Correct Answer
verified
B

The Federal Trade Commission Act allows the FTC to:

Correct Answer
verified

The Consumer Product Safety Commission:

Correct Answer
verified
B

Under the Fair Credit Billing Act, if a consumer makes a complaint about the amount on his charge account bill, the store can:

Correct Answer
verified

If an advertising statement is technically true but may tend to mislead, the FTC can still require a company to stop using it.

Correct Answer
verified

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 forbids credit card issuers from raising interest rates or any fees during the first year a credit card account is open, and the Act states that gift cards or certificates may not expire sooner than five years after issuance.

Correct Answer
verified

A typical automobile financing agreement would be a closed-end credit agreement.

Correct Answer
verified

Correct Answer
verified
In a typical situation, the FTC discover...
View Answer

One difference between a full and a limited warranty is that in a limited warranty, the manufacturer may, if reasonable, limit the warranty of merchantability to two years.

Correct Answer
verified

The Federal Trade Commission was created in 1968 in response to the consumer movement of the 1960s.

Correct Answer
verified

Exam 41: Consumer Protection

Most state attorneys general:

Correct AnswerverifiedShow Answer

A cease and desist order, issued by the FTC, directs a party to stop a certain practice or face punishment, such as a fine.

Correct AnswerverifiedShow Answer

The FTC remedy of "affirmative disclosure" would require:

Correct AnswerverifiedShow Answer

The Fair Debt Collection Practices Act prohibits:

Correct AnswerverifiedShow Answer

What are the remedies available for the Federal Trade Commission?

Correct AnswerverifiedShow Answer

The federal Truth-in-Lending law:

Correct AnswerverifiedShow Answer

Under the FCCPA, the liability of a credit card holder for another's unauthorized use of the card is limited to:

Correct AnswerverifiedShow Answer

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission:

Correct AnswerverifiedShow Answer

The Credit Card Fraud Act prohibits which of the following practices?

Correct AnswerverifiedShow Answer

In order for advertising to be found deceptive by the FTC, it is necessary that:

Correct AnswerverifiedB

The Federal Trade Commission Act allows the FTC to:

Correct AnswerverifiedShow Answer

The Consumer Product Safety Commission:

Correct AnswerverifiedB

Under the Fair Credit Billing Act, if a consumer makes a complaint about the amount on his charge account bill, the store can:

Correct AnswerverifiedShow Answer

If an advertising statement is technically true but may tend to mislead, the FTC can still require a company to stop using it.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A typical automobile financing agreement would be a closed-end credit agreement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIn a typical situation, the FTC discover...View AnswerShow Answer

One difference between a full and a limited warranty is that in a limited warranty, the manufacturer may, if reasonable, limit the warranty of merchantability to two years.

Correct AnswerverifiedShow Answer

The Federal Trade Commission was created in 1968 in response to the consumer movement of the 1960s.

Correct AnswerverifiedShow Answer

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B

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B

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Correct Answer
verified
In a typical situation, the FTC discover...
View Answer

Correct Answer
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Correct Answer
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