Deck 32: Consumer Protection

Question 1

Those who are liable for violations of consumer protection situations are persons or enterprises that regularly enter into the type of transaction in which the injured consumer was involved.

Answer 1

True

Question 2

The FTC requires that only descriptive and non-ambiguous terms such as jumbo, giant, or full be used in product labeling.

Answer 2

False

Question 3

An auto dealer who does not actually know of a roll-back can use lack of knowledge as a defense against odometer fraud, regardless of the condition of the car.

Answer 3

False

Question 4

Corrective advertising required by the FTC also is called retroactive advertising.

Question 5

The aim of consumer protection legislation is to protect persons of limited means and limited knowledge.

Question 6

Consumer protection laws, which commonly regulate the form of consumer contracts, provide that back-page disclaimers are void if the front page of a contract does not call attention to the presence of the terms on the back page.

Question 7

The types of provisions that make contracts unconscionable include clauses that award excessive damages or the application of credit payments across purchases over time so that the consumer is never able to pay off any goods.

Question 8

Consumer protection even protects a consumer from the consumer's own negligence.

Question 9

Labels on packages are regulated to provide information about the contents and warnings about the dangers involved in the use of the product.

Question 10

Consumer protection law often requires those dealing with consumers to make certain mandated disclosures.

Question 11

A consumer claiming that there has been a violation of a consumer protection statute has the burden of proving that the statutory definition of "consumer" has been satisfied.

Question 12

A sale of goods or services for $25 or more made to a buyer at home may be set aside without cause within five (5) business days.

Question 13

Consumers must re-register every three years in order to stay on the National Do Not Call Registry.

Question 14

One of the protections for consumers against subprime loans includes credit counseling before consumers may sign for certain types of subprime loans.

Question 15

Despite consumer protection legislation, for most consumers pursing their rights in court is not cost beneficial.

Question 16

Consumer title loans, made in exchange for title to a car if the borrower defaults, are also called predatory loans and are illegal per se.

Question 17

Antitrust statutes that prohibit anticompetitive behavior give consumers the right to collect treble punitive damages for a violation.

Question 18

The category of protected consumers for many statutes has been expanded to include partnerships, corporations and government entities.

Question 19

Individuals can seek criminal and civil penalties against those who violate consumer protection statutes.

Question 20

Consumer protection statutes do not require proof of intent, regardless of whether the merchant did not think the ad was misleading.

Question 21

The Telephone Consumer Protection Act prohibits all of the following except:

A) automated marking calls without prior express consent.
B) calls to patients' room in hospitals.
C) calls after 9:00 PM.
D) 911 calls.

Question 22

A sale of goods or services for $25 or more made to a buyer at home may be set aside within __________ days.

A) three (3) business
B) three (3) calendar
C) five (5) business
D) five (5) calendar

Question 23

Under the Equal Credit Opportunity Act, it is unlawful to discriminate against an applicant because all or part of the applicant's income is obtained from a public assistance program.

Question 24

Odometer fraud allows the purchaser to recover:

A) the entire purchase price of the automobile plus $1,500.
B) twice the actual loss from the fraud.
C) the total loss the buyer can collect to $1,500.
D) three times the actual loss or $1,500, whichever is higher.

Question 25

Advertising regulations are designed to:

A) give the consumer an accurate description of the product.
B) punish sellers who knowingly make false statements about the product offered for sale.
C) punish sellers who state a false opinion about the product.
D) give the consumer information about other similar products that are available.

Question 26

Who may bring an action for relief under consumer protection legislation?

A) the Federal Trade Commission
B) a state attorney general
C) the consumer
D) all of these

Question 27

The CARD Act substantially restricts the solicitation of credit card accounts for those under the age of 18.

Question 28

Consumer protection statutes and regulations do not protect against:

A) deceptive advertising.
B) the consumer's own negligence.
C) unsolicited credit cards sent to creditworthy consumers.
D) unreasonable methods of debt collection by debt collection agencies.

Question 29

What is not a correct statement concerning consumer protection legislation?

A) It prohibits the consumer from suing in his or her own right and gives the right to sue solely to an agency or to the attorney general.
B) It recognizes that the theoretical right of the consumer to sue may be of little practical value.
C) It provides special remedies.
D) It provides certain agencies to police statutes passed to aid consumers.

Question 30

Automobile lemon laws protect only persons buying automobiles for personal, family, or household use.

Question 31

Anyone promoting the sale of a real estate development that is divided into fifty (50) or more parcels of less than five (5) acres each must file a development statement with the secretary of Housing and Urban Development.

Question 32

Pursuant to the Credit Repair Organization Act of 1996, credit repair organizations must be "non-profit."

Question 33

When improper collection methods are used, it is no defense to the creditor that the improper acts were performed by an agent, an employee, or any other person acting on behalf of the creditor.

Question 34

A consumer may waive all defenses otherwise provided for by law.

Question 35

Compensatory damages:

A) compensate consumers for their actual loss.
B) are imposed to punish the defendant for wrongdoing.
C) may be a percentage of the company's net worth.
D) allow consumers to collect treble damages for a violation.

Question 36

The policing of fraudulent advertising is entrusted to which of the following administrative agencies?

A) IRS
B) FTC
C) UCCC
D) FDA

Question 37

When an enterprise has made false and deceptive statements in advertising, the FTC may require new advertising to correct the former statement so that consumers are aware of the truth. This corrective advertising required by the FTC is also called __________ advertising.

A) retractive
B) redactive
C) retroactive
D) refractive

Question 38

When a credit application is refused, it is sufficient that the lender give the applicant a written statement saying: "application refused."

Question 39

A letter from a collection agency to a consumer that gives the impression a lawsuit is about to be brought against the consumer when in fact it will not be brought is not a violation of the Fair Debt Collection Practices Act.

Question 40

The Fair Credit Reporting Act applies only to consumer credit.

Question 41

What is not a correct statement concerning the Fair Debt Collection Practices Act?

A) It prohibits improper practices in the collection of consumer debts.
B) It applies to original creditors who are collecting from original debtors.
C) The validity of the debt is not a defense.
D) Violators are liable to debtors for damages.

Question 42

An unsolicited distribution of credit cards to persons who have not applied for them is:

A) always allowed.
B) voidable.
C) illegal.
D) only allowed if the recipient is at least 21 years old.

Question 43

A finance company may not reject an loan applicant on any of the grounds listed below, except:

A) the applicant is married.
B) the applicant is sixty-five or older.
C) the applicant is divorced.
D) the applicant is on a fixed income.

Question 44

The __________ lending market makes loans to consumers who have bankruptcies, no credit history, low-to-moderate incomes, or a poor credit history.

A) subprime
B) subterranean
C) suboptimal
D) optimus prime

Question 45

Peter applied for a loan at three banks. Peter's application was denied at the first two banks but finally was approved by the third institution. Peter believes that the first two banks denied his application because of his minority status. No explanation ever was provided by the banks denying Peter's request for funds. After obtaining the loan, Peter soon found himself unable to make the prescribed payments. Peter went into default, causing the bank to turn his case over to a collection agency. The collection agency called him "night and day" and were very abusive in their collection practices. Peter became quite distraught and unable to function at his job. As a result, Peter was soon fired. Peter asks for your advice regarding his legal rights. What is your response?

Question 46

Anyone promoting the sale of a real estate development that is divided into fifty (50) or more parcels of less than five (5) acres each must file a(n) __________ statement with the secretary of Housing and Urban Development.

A) building plan
B) development
C) environmental impact
D) real property

Question 47

Sue Thompson received a home "cold-canvas" sales call at her home from a representative of the Enlightened Encyclopedia Company. The salesperson, after a rather aggressive presentation, convinced Sue to order a $1,200 Deluxe Encyclopedia set for her two children. Sue was impressed with the quality of the books, but shortly after signing the contract, she realized that she could not really afford to make the required monthly payments. What rights, if any, does Sue have in this situation?

Question 48

If you allow another person to use your credit card but the person uses the card for a purpose other than the one you specified:

A) an unauthorized usage has occurred.
B) an authorized usage has occurred.
C) you will not be responsible for more than $50 of the amount charged.
D) you are not liable for any of the amount charged.

Question 49

It is lawful to refuse to extend credit to a consumer based on the consumer's:

A) race.
B) marital status.
C) credit history.
D) age.

Question 50

The owner of a lost credit card is:

A) liable for all purchases made by its finder if the card was lost through negligence.
B) not liable for any purchases if the card was lost despite the exercise of reasonable care by the cardholder.
C) liable for all purchases if the card originally had been sent to the cardholder without any prior request and never was used by such holder.
D) not liable for more than $50 for the unauthorized use of the card.

Question 51

Samuel signed a contract to purchase furniture on credit. The contract clearly set forth in bold print all charges included in the cost of the credit, including the interest rate and annual percentage rate. The seller informed Samuel that the seller regularly sold these contracts to a finance company that paid it immediate cash and then collected from the debtors. The seller further advised that the finance company did not want "the headache" of determining the validity of consumer complaints and that therefore the contract provided that the consumer waived all defenses concerning the furniture against the finance company. The contract expressly provided that the seller would remain responsible for any non-conformities in the furniture or breaches of contract on its part. The furniture was defective, but the finance company is demanding that Samuel make the payments to it required by the contract and resolve its disputes with the seller of the furniture. Samuel consults you regarding his rights. What is your response?

Question 52

Pursuant to the CARD Act of 2009, all credit card companies must have bills in consumers' hands not less than __________ before the bill is due.

A) seven (7) days
B) fourteen (14) days
C) twenty-one (21) days
D) thirty (30) days

Question 53

The Fair Credit Reporting Act applies to:

A) consumer credit.
B) commercial credit.
C) business credit.
D) international sales contracts.