Question 1

Ad substantiation does not require advertisers to have a reasonable basis for their claims at the time the claims were made.

Accepted Answer

A) True 
 B)False  False

Question 2

An employer must notify a job applicant or current employee that a credit report may be used and must obtain the applicant's consent prior to requesting an individual's credit report from a credit bureau.

Accepted Answer

A) True 
 B)False  True

Question 3

If a manufacturer of a consumer product tells a buyer that he is selling it with no warranties, there is a violation of the Magnuson-Moss Act.

Accepted Answer

A) True 
 B)False  False

Question 4

The federal Truth-in-Lending law:

Accepted Answer

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

Question 5

The Truth-in-Lending Act has disclosure requirements for both consumer loans and credit sales over $50,000.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following best expresses the policy behind the Truth-in-Lending Act?

Accepted Answer

A)  To help lenders by permitting them to investigate a person's credit history without having to worry about state libel laws. 
B)  To help small business by requiring that lenders not use as collateral for secured loans a business's most important assets. 
C)  To help borrowers by requiring lenders to charge a "reasonable" rate of interest as determined by the Federal Reserve Board. 
D)  To help debtors for loans for personal, family, or household purpose to be armed with the necessary information on a loan to better bargain for credit and to choose the creditor with the best terms. 
A)  To help lenders by permitting them to investigate a person's credit history without having to worry about state libel laws. 
B)  To help small business by requiring that lenders not use as collateral for secured loans a business's most important assets. 
C)  To help borrowers by requiring lenders to charge a "reasonable" rate of interest as determined by the Federal Reserve Board. 
D)  To help debtors for loans for personal, family, or household purpose to be armed with the necessary information on a loan to better bargain for credit and to choose the creditor with the best terms.

Question 7

The Federal Trade Commission has overall enforcement authority for the Equal Credit Opportunity Act.

Accepted Answer

A) True 
 B)False

Question 8

The Consumer Product Safety Commission enforces the:

Accepted Answer

A)  Flammable Fabrics Act. 
B)  Federal Hazardous Substances Act. 
C)  Refrigerator Safety Act. 
D)  All of these. 
E)  None of these. 
A)  Flammable Fabrics Act. 
B)  Federal Hazardous Substances Act. 
C)  Refrigerator Safety Act. 
D)  All of these. 
E)  None of these.

Question 9

A misrepresentation or material omission that is likely to mislead a consumer to the consumer's detriment is grounds for a claim of deception under FTC rules.

Accepted Answer

A) True 
 B)False

Question 10

The Federal Consumer Credit Protection Act:

Accepted Answer

A)  Sets limits on garnishment proceedings. 
B)  Requires creditors to disclose finance charges. 
C)  Does not yet require disclosure on credit extension charges. 
D)  Requires creditors to disclose finance charges  but  does not require disclosure on credit extension charges. 
E)  S ets limits on garnishment proceedings. and also  requires creditors to disclose finance charges. 
A)  Sets limits on garnishment proceedings. 
B)  Requires creditors to disclose finance charges. 
C)  Does not yet require disclosure on credit extension charges. 
D)  Requires creditors to disclose finance charges  but  does not require disclosure on credit extension charges. 
E)  S ets limits on garnishment proceedings. and also  requires creditors to disclose finance charges.

Question 11

Sue has a Bloomingdale's credit card.On Monday she charged a $47.90 sweater and then lost the card.Myra found it Monday and charged a $100 scarf and $400 purse.Sue missed her card at 8 a.m.Tuesday and called the store.Myra then charged a coat for $4,000.Sue's bill was $4,547.90.Sue owes:

Accepted Answer

A)  $97.90. 
B)  $47.90. 
C)  $547.90. 
D)  $4,547.90. 
A)  $97.90. 
B)  $47.90. 
C)  $547.90. 
D)  $4,547.90.

Question 12

Remedies available to the FTC for violations of unfair and deceptive trade practices include:

Accepted Answer

A)  affirmative disclosure. 
B)  multiple product orders. 
C)  corrective advertising. 
D)  All of these. 
A)  affirmative disclosure. 
B)  multiple product orders. 
C)  corrective advertising. 
D)  All of these.

Question 13

Some states have broadened their lemon law coverage to include used cars and motorcycles.

Accepted Answer

A) True 
 B)False

Question 14

The FTC:

Accepted Answer

A)  and an advertiser can enter into a consent decree to force the advertiser to both stop the running of the advertisement and to publicly admit its advertisement was deceptive. 
B)  can fine an advertiser for running a misleading advertisement if it fails to comply with its order to "cease and desist." 
C)  can order a false or misleading advertisement to be stopped through a "cease and desist order," but cannot require the violator to correct its advertising. 
D)  All of these are correct. 
A)  and an advertiser can enter into a consent decree to force the advertiser to both stop the running of the advertisement and to publicly admit its advertisement was deceptive. 
B)  can fine an advertiser for running a misleading advertisement if it fails to comply with its order to "cease and desist." 
C)  can order a false or misleading advertisement to be stopped through a "cease and desist order," but cannot require the violator to correct its advertising. 
D)  All of these are correct.

Question 15

Northstar Sporting Goods sells consumer goods to Lena for $85 and provides a written warranty regarding the quality of the goods.Northstar:

Accepted Answer

A)  may modify the implied warranties. 
B)  may disclaim any and all implied warranties as long as the disclaimer is conspicuous. 
C)  must designate the warranty as full or limited. 
D)  All of these are correct. 
A)  may modify the implied warranties. 
B)  may disclaim any and all implied warranties as long as the disclaimer is conspicuous. 
C)  must designate the warranty as full or limited. 
D)  All of these are correct.

Question 16

The FCC's Open Internet rules imposing net neutrality by regulating fixed and mobile broadband service providers as utilities were struck down  in a divided decision of a three-judge panel at the U.S.Court of Appeals for the District of Columbia Circuit .

Accepted Answer

A) True 
 B)False

Question 17

The Fair Credit Reporting Act has to do with:

Accepted Answer

A)  bills that are incorrectly added. 
B)  credit checks done by potential lenders. 
C)  reports made by credit agencies. 
D)  All of these. 
E)  reports made by credit agencies and also  credit checks done by potential lenders. 
A)  bills that are incorrectly added. 
B)  credit checks done by potential lenders. 
C)  reports made by credit agencies. 
D)  All of these. 
E)  reports made by credit agencies and also  credit checks done by potential lenders.

Question 18

The Consumer Financial Protection Bureau has rulemaking, supervisory, and enforcement authority over all but which of the following?

Accepted Answer

A)  Persons engaged in extending credit and servicing loans. 
B)  Automobile dealers. 
C)  Check cashing establishments. 
D)  Persons engaged in deposit-taking activities. 
E)  Consumer credit report providers. 
A)  Persons engaged in extending credit and servicing loans. 
B)  Automobile dealers. 
C)  Check cashing establishments. 
D)  Persons engaged in deposit-taking activities. 
E)  Consumer credit report providers.

Question 19

If a debtor defaults on a credit contract, the creditor may:

Accepted Answer

A)  impose a late charge. 
B)  garnish wages if there has been a court proceeding to enforce collection of a judgment. 
C)  declare the entire balance of the debt immediately due and may sue on the debt. 
D)  All of these. 
E)  Both  impose a late charge and  declare the entire balance of the debt immediately due and sue on the debt. 
A)  impose a late charge. 
B)  garnish wages if there has been a court proceeding to enforce collection of a judgment. 
C)  declare the entire balance of the debt immediately due and may sue on the debt. 
D)  All of these. 
E)  Both  impose a late charge and  declare the entire balance of the debt immediately due and sue on the debt.

Question 20

Which of the following acts requires disclosure of finance charges in terms of an annual percentage rate and requires that interest rates be calculated in a uniform manner in consumer credit transactions?

Accepted Answer

A)  Fair Credit Billing Act 
B)  FTC Act 
C)  Equal Credit Opportunity Act 
D)  Truth-in-Lending Act 
A)  Fair Credit Billing Act 
B)  FTC Act 
C)  Equal Credit Opportunity Act 
D)  Truth-in-Lending Act

Exam 44: Consumer Protection

Ad substantiation does not require advertisers to have a reasonable basis for their claims at the time the claims were made.

An employer must notify a job applicant or current employee that a credit report may be used and must obtain the applicant's consent prior to requesting an individual's credit report from a credit bureau.

If a manufacturer of a consumer product tells a buyer that he is selling it with no warranties, there is a violation of the Magnuson-Moss Act.

The federal Truth-in-Lending law:

The Truth-in-Lending Act has disclosure requirements for both consumer loans and credit sales over $50,000.

Which of the following best expresses the policy behind the Truth-in-Lending Act?

The Federal Trade Commission has overall enforcement authority for the Equal Credit Opportunity Act.

The Consumer Product Safety Commission enforces the:

A misrepresentation or material omission that is likely to mislead a consumer to the consumer's detriment is grounds for a claim of deception under FTC rules.

The Federal Consumer Credit Protection Act:

Sue has a Bloomingdale's credit card.On Monday she charged a $47.90 sweater and then lost the card.Myra found it Monday and charged a $100 scarf and $400 purse.Sue missed her card at 8 a.m.Tuesday and called the store.Myra then charged a coat for $4,000.Sue's bill was $4,547.90.Sue owes:

Remedies available to the FTC for violations of unfair and deceptive trade practices include:

Some states have broadened their lemon law coverage to include used cars and motorcycles.

The FTC:

Northstar Sporting Goods sells consumer goods to Lena for $85 and provides a written warranty regarding the quality of the goods.Northstar:

The FCC's Open Internet rules imposing net neutrality by regulating fixed and mobile broadband service providers as utilities were struck down in a divided decision of a three-judge panel at the U.S.Court of Appeals for the District of Columbia Circuit .

The Fair Credit Reporting Act has to do with:

The Consumer Financial Protection Bureau has rulemaking, supervisory, and enforcement authority over all but which of the following?

If a debtor defaults on a credit contract, the creditor may:

Which of the following acts requires disclosure of finance charges in terms of an annual percentage rate and requires that interest rates be calculated in a uniform manner in consumer credit transactions?

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

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 Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

International Business Lawpart X: Property

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

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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