Question 1

Reference - Convertibles. Barry, a new car dealer, advertised that a new brand of convertible called Wind would be available at his dealership for the price of $10,000 each. He had only three Wind vehicles, however; and when those were sold, he tried to convince shoppers to purchase a much more expensive new convertible at a price of $25,000. Kathy, a customer who decided to purchase one of the more expensive vehicles needed financing in order to do so. She had $10,000 to pay on the car and sought a loan from ABC Bank for the remainder. She wanted the loan for a specific amount of time. ABC Bank offered her the loan and she agreed. The only information she received from ABC Bank was confirmation that she borrowed $15,000 at an 8% interest rate. After receiving several complaints, the Federal Trade Commission disapproved of Barry's action in regard to the Wind vehicles. Claiming that his advertisement was misleading, the Commission proceeded to issue a cease-and-desist order prohibiting deceptive advertising involving Wind vehicles and also in regard to any other vehicles Barry offered for sale. Under the Truth-in-Lending Act what type of information should Kathy have received from ABC Bank?

Accepted Answer

A)   The total amount financed; and the number, amount, and due dates of payments.
B)   The total amount financed; the number, amount, and due dates of payments; and the bank policy in the event of a delinquency.
C)   The total amount financed; the number, amount, and due dates of payments; and the bank's policy regarding selling loans to other financial institutions.
D)   The total amount financed; the number, amount, and due dates of payments; the bank policy in the event of a delinquency; and the bank's policy regarding selling loans to other financial institutions.
E)   Only the information she received.F) None of the above
G) All of the above

Question 2

The Truth-in-Lending Act includes which of the following categories of loans?

Accepted Answer

A)   Open-end credit
B)   Closed-end credit
C)   Credit card applications and solicitations
D)   Open-end credit, closed-end credit, and credit card applications and solicitations
E)   Open-end credit and closed-end credit, but not credit card applications and solicitationsF) A) and B)
G) A) and C)

Question 3

State consumer protection laws prohibiting used-car fraud are known as _____________ laws.

Accepted Answer

A)   Orange
B)   Prune
C)   Lemon
D)   Onion
E)   GarlicF) A) and E)
G) B) and C)

Question 4

To which of the following loans does the Truth-in Lending Act apply?

Accepted Answer

A)   Loans to a natural person
B)   Loans to a natural person and to a limited partnerships
C)   Loans to a natural person, loans to a limited partnership, and loans to a general partnership
D)   Loans to a natural person, loans to a limited partnership, loans to a general partnership, and loans to a corporation
E)   All loansF) A) and D)
G) B) and C)

Question 5

Which of the following is the appropriate term for a requirement by the Federal Trade Commission that a company run advertisements in which the company explicitly states that formerly advertised claims were untrue?

Accepted Answer

A)   Corrective advertising
B)   Repeal advertising
C)   Notice publication
D)   Notice advertising
E)   Action publicationF) A) and D)
G) B) and C)

Question 6

Reference - The Burial Emporium. Fred operates a funeral home called Fred's Burial Emporium. Fred likes to keep things simple. He has one flat price with no itemization and requires that customers purchase a complete package from him if they want any services whatsoever. Fred also goes door-to-door selling funeral packages. He tries to visit neighborhoods in which there has been a recent death because residents in the neighborhood will have final arrangements on their minds. He believes and informs customers that once customers sign a contract for burial services, there is no backing out. Fred also obtains a good deal of business from phone solicitation. He enjoys calling late at night, between 10 p.m. and 11 p.m., when people are tired, but before they go to bed. He believes that if people do not feel well, they are more likely to consider funeral arrangements. After some pesky consumer complaints, the Federal Trade Commission and other federal agencies investigate Fred. He hires a good lawyer with his profits in an attempt to stay out of trouble. Which of the following is true regarding Fred's door-to-door solicitation and his practice of informing customers that there is no backing out of contracts entered into for funeral services?

Accepted Answer

A)   There is no problem with Fred's actions so long as he truly gives specific notice that he will not agree to any cancellations.
B)   Fred must give customers at least 24 hours in which to cancel such a contract, but that is only because funeral services are involved.
C)   There is no problem with Fred's actions even if he does not give specific notice that he will not agree to any cancellations.
D)   Because door-to-door sales are involved, Fred must give consumers 24 hours in which to cancel.
E)   Because door-to-door sales re involved, consumers must have three days in which to cancel purchases.F) A) and B)
G) C) and D)

Question 7

Congress created the Federal Trade Commission (FTC)  through the Federal Trade Commission Act of ________________________.

Accepted Answer

A)   1900
B)   1914
C)   1929
D)   1934
E)   1976F) A) and C)
G) C) and D)

Question 8

The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals on the basis of _____________.

Accepted Answer

A)   Race, religion, national origin, color, sex, marital status, or age
B)   Race, national origin, color, sex, marital status, or age
C)   Race, religion, national origin, color, sex, or age
D)   Race, religion, national origin, color, or sex
E)   Race, religion, color, sex, marital status, or ageF) B) and E)
G) A) and B)

Question 9

Which of the following is the term used for the requirement of the Federal Trade Commission that advertisers have a reasonable basis for claims made in advertisements?

Accepted Answer

A)   Ad substantiation
B)   Ad verification
C)   Proof of ad veracity
D)   Illustration of ad veracity
E)   Acknowledgement of ad veracityF) None of the above
G) A) and B)

Question 10

By federal law, major credit reporting agencies are now required to provide consumers with a free copy of their credit report every _____________.

Accepted Answer

A)   36 months
B)   24 months
C)   12 months
D)   6 months
E)   None of these because there is no such requirement.F) A) and E)
G) A) and D)

Question 11

The existence of deceptive advertisements is enough alone to prove damages for recovery when individual civil suits are filed for deceptive practices.

Accepted Answer

A) True 
 B)False

Question 12

Congress repealed the law prohibiting the sale of highly flammable clothing.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is the agency responsible for enforcing the Federal Food, Drug, and Cosmetic Act?

Accepted Answer

A)   The U.S. Food and Drug Administration
B)   The Federal Consumer Administration
C)   The Federal Consumption Administration
D)   The Federal Safety Commission
E)   The U.S. Uniform Drug CommissionF) C) and E)
G) A) and B)

Question 14

For how long does registration on the Federal Trade Commission's "Do Not Call" registry last?

Accepted Answer

A)   Two years
B)   Three years
C)   Four years
D)   Five years
E)   Thirty-six monthsF) B) and C)
G) A) and E)

Question 15

Which of the following are interpretations of consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior?

Accepted Answer

A)   Consumer guides
B)   Consumer recommendations
C)   Business interpretations
D)   Industry guides
E)   Business requirementsF) B) and D)
G) B) and E)

Question 16

The Consumer Product Safety Commission lacks the authority to issue product recalls on its own.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true regarding federal regulation of used-car sales?

Accepted Answer

A)   Odometer fraud is prohibited.
B)   There are requirements regarding notification that a car is being sold "as is."
C)   The dealer may attach a label providing that no further inspection is needed if the car has already gone through a thorough inspection by the dealer.
D)   Odometer fraud is prohibited; there are requirements regarding notification that a car is being sold "as is;" and the dealer may attach a label providing that no further inspection is needed if the car has already gone through a thorough inspection by the dealer.
E)   Odometer fraud is prohibited and there are requirements regarding notification that a car is being sold "as is," but the dealer is not allowed to indicate that no further inspection is needed.F) B) and D)
G) D) and E)

Question 18

Which of the following must be true in order for a loan to come within the protection of the Truth-in-Lending Act?

Accepted Answer

A)   The credit or loan must be subject to a finance charge.
B)   The credit or loan must have repayments of more than four installments.
C)   The credit or loan must have an interest rate of over 5%.
D)   The credit or loan must be subject to a finance charge, or credit or loan must have repayments of more than four installments, and the credit or loan must have an interest rate of over 5%.
E)   The credit or loan must be subject to a finance charge or have repayments of more than four installments, but there is no requirement regarding the loan having an interest rate of over 5%.F) D) and E)
G) A) and E)

Question 19

The law in Quebec requires that if a product is sold in Quebec, its packaging and product instructions are to be in French alone.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is false regarding the Consumer Product Safety Act?

Accepted Answer

A)   It enforces mandatory standards regarding product safety.
B)   It has no authority to require a recall of products.
C)   It conducts research regarding potentially hazardous products.
D)   It educates consumers about product safety.
E)   It can ban consumer products from the market.F) A) and D)
G) A) and E)

Exam 25: Consumer Law

For how long does registration on the Federal Trade Commission's "Do Not Call" registry last?

Correct Answer
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By federal law, major credit reporting agencies are now required to provide consumers with a free copy of their credit report every _____________.

Correct Answer
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The Consumer Product Safety Commission lacks the authority to issue product recalls on its own.

Correct Answer
verified

Which of the following is the appropriate term for a requirement by the Federal Trade Commission that a company run advertisements in which the company explicitly states that formerly advertised claims were untrue?

Correct Answer
verified

The law in Quebec requires that if a product is sold in Quebec, its packaging and product instructions are to be in French alone.

Correct Answer
verified

Which of the following is the term used for the requirement of the Federal Trade Commission that advertisers have a reasonable basis for claims made in advertisements?

Correct Answer
verified

Which of the following are interpretations of consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior?

Correct Answer
verified

The Truth-in-Lending Act includes which of the following categories of loans?

Correct Answer
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Correct Answer
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Which of the following is true regarding federal regulation of used-car sales?

Correct Answer
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To which of the following loans does the Truth-in Lending Act apply?

Correct Answer
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Which of the following is false regarding the Consumer Product Safety Act?

Correct Answer
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Which of the following must be true in order for a loan to come within the protection of the Truth-in-Lending Act?

Correct Answer
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Congress repealed the law prohibiting the sale of highly flammable clothing.

Correct Answer
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Correct Answer
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The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals on the basis of _____________.

Correct Answer
verified

Which of the following is the agency responsible for enforcing the Federal Food, Drug, and Cosmetic Act?

Correct Answer
verified

Congress created the Federal Trade Commission (FTC) through the Federal Trade Commission Act of ________________________.

Correct Answer
verified

State consumer protection laws prohibiting used-car fraud are known as _____________ laws.

Correct Answer
verified

The existence of deceptive advertisements is enough alone to prove damages for recovery when individual civil suits are filed for deceptive practices.

Correct Answer
verified

Exam 25: Consumer Law

For how long does registration on the Federal Trade Commission's "Do Not Call" registry last?

Correct AnswerverifiedShow Answer

By federal law, major credit reporting agencies are now required to provide consumers with a free copy of their credit report every _____________.

Correct AnswerverifiedShow Answer

The Consumer Product Safety Commission lacks the authority to issue product recalls on its own.

Correct AnswerverifiedShow Answer

Which of the following is the appropriate term for a requirement by the Federal Trade Commission that a company run advertisements in which the company explicitly states that formerly advertised claims were untrue?

Correct AnswerverifiedShow Answer

The law in Quebec requires that if a product is sold in Quebec, its packaging and product instructions are to be in French alone.

Correct AnswerverifiedShow Answer

Which of the following is the term used for the requirement of the Federal Trade Commission that advertisers have a reasonable basis for claims made in advertisements?

Correct AnswerverifiedShow Answer

Which of the following are interpretations of consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior?

Correct AnswerverifiedShow Answer

The Truth-in-Lending Act includes which of the following categories of loans?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true regarding federal regulation of used-car sales?

Correct AnswerverifiedShow Answer

To which of the following loans does the Truth-in Lending Act apply?

Correct AnswerverifiedShow Answer

Which of the following is false regarding the Consumer Product Safety Act?

Correct AnswerverifiedShow Answer

Which of the following must be true in order for a loan to come within the protection of the Truth-in-Lending Act?

Correct AnswerverifiedShow Answer

Congress repealed the law prohibiting the sale of highly flammable clothing.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals on the basis of _____________.

Correct AnswerverifiedShow Answer

Which of the following is the agency responsible for enforcing the Federal Food, Drug, and Cosmetic Act?

Correct AnswerverifiedShow Answer

Congress created the Federal Trade Commission (FTC) through the Federal Trade Commission Act of ________________________.

Correct AnswerverifiedShow Answer

State consumer protection laws prohibiting used-car fraud are known as _____________ laws.

Correct AnswerverifiedShow Answer

The existence of deceptive advertisements is enough alone to prove damages for recovery when individual civil suits are filed for deceptive practices.

Correct AnswerverifiedShow Answer

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