Question 1

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. 
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. B

Question 2

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. 
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. B

Question 3

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 4

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. 
A) $500. 
B) $100. 
C) $50. 
D) None of these; liability is unlimited.

Question 5

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. 
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.

Question 6

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. 
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.

Question 7

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 8

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. 
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.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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. 
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.

Question 11

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 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

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. 
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.

Question 15

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. 
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.

Question 16

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 17

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. 
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.

Question 18

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 penalties 
A) Affirmative exemption 
B) Corrective advertising and multiple product orders 
C) Impounding inventory 
D) Fines and monetary penalties

Question 19

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 20

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. 
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.

Exam 41: Consumer Protection

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

The Consumer Product Safety Commission:

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

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

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

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

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

The Fair Debt Collection Practices Act prohibits:

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.

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

Most state attorneys general:

The Federal Trade Commission Act allows the FTC to:

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

The federal Truth-in-Lending law:

What are the remedies available for the Federal Trade Commission?

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

The FTC remedy of "affirmative disclosure" would require:

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

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