Question 1

Consumers have a right to:

Accepted Answer

A)  exclude as obsolete information about a bankruptcy discharge within seven years. 
B)  know the name of anyone to whom credit information has been supplied by a consumer reporting agency within the last three years. 
C)  have their own version of a disputed credit situation included in their credit file. 
D)  have their credit rating reviewed at least once a year. 
A)  exclude as obsolete information about a bankruptcy discharge within seven years. 
B)  know the name of anyone to whom credit information has been supplied by a consumer reporting agency within the last three years. 
C)  have their own version of a disputed credit situation included in their credit file. 
D)  have their credit rating reviewed at least once a year.

Question 2

Grady receives a $2,940 credit card bill in the mail from a company with which he doesn't have an account.He fears he is a victim of identity theft.Does he have any recourse?

Accepted Answer

A)  Yes, under the Fair and Accurate Credit Transactions Act (FACT
A) , Grady can place an alert in his credit files using the National Fraud Alert System. 
B)  Yes, under the Fair Credit Billing Act he may call the credit card company to complain about the bill, and the credit card company must investigate and correct any errors. 
C)  Yes, under the Truth in Lending Act, Grady is liable only for the first $50 in unauthorized charges. 
D)  No, he should have been more careful with his personal information so no one could have applied for credit in his name. 
A)  Yes, under the Fair and Accurate Credit Transactions Act (FACT
A) , Grady can place an alert in his credit files using the National Fraud Alert System. 
B)  Yes, under the Fair Credit Billing Act he may call the credit card company to complain about the bill, and the credit card company must investigate and correct any errors. 
C)  Yes, under the Truth in Lending Act, Grady is liable only for the first $50 in unauthorized charges. 
D)  No, he should have been more careful with his personal information so no one could have applied for credit in his name.

Question 3

Which of the following statements expresses the purpose of the Truth-in-Lending Act?

Accepted Answer

A)  To require lenders to charge a "reasonable" rate of interest. 
B)  To help small business. 
C)  To provide consumers with information necessary to make the best credit decision. 
D)  To help lenders limit state laws. 
A)  To require lenders to charge a "reasonable" rate of interest. 
B)  To help small business. 
C)  To provide consumers with information necessary to make the best credit decision. 
D)  To help lenders limit state laws.

Question 4

Richard received his credit card bill and noticed an error.He wrote to the company the next week,pointing out the error in his bill.Under the law,what is the credit card issuer's obligation once it receives Richard's letter?

Accepted Answer

Under the Fair Credit Billing Act,the co

Question 5

Under FTC rules,a customer can cancel a door-to-door sales contract within:

Accepted Answer

A)  three business days of the sale. 
B)  five business days of the sale. 
C)  one calendar week from the date the sale was made. 
D)  a "reasonable time" after the sale was made. 
A)  three business days of the sale. 
B)  five business days of the sale. 
C)  one calendar week from the date the sale was made. 
D)  a "reasonable time" after the sale was made.

Question 6

If your wallet,which contained a credit card,was stolen and you called the credit card company immediately,your maximum liability would be?

Accepted Answer

A)  Nothing. 
B)  $50. 
C)  $100. 
D)  Unlimited unless you had purchased a protection policy from the credit card issuer. 
A)  Nothing. 
B)  $50. 
C)  $100. 
D)  Unlimited unless you had purchased a protection policy from the credit card issuer.

Question 7

The Trimbles apply to Community Savings & Loan for a ten-year installment loan of $20,000 to remodel their kitchen.Discuss the disclosures Community is required to make.

Accepted Answer

The Truth in Lending Act will apply to t

Question 8

Monty applies for a $32,000 loan to purchase a truck for his family's use.This loan is subject to TILA disclosure requirements.

Accepted Answer

A) True 
 B)False

Question 9

The Fair Debt Collection Practices Act prohibits which of the following practices?

Accepted Answer

A)  A debt collector falsely representing himself as a lawyer. 
B)  A debt collector telephoning the debtor at 8:00 a. m. 
C)  Visiting a debtor at work if the employer permits personal visits. 
D)  Using neighbors to locate the debtor. 
A)  A debt collector falsely representing himself as a lawyer. 
B)  A debt collector telephoning the debtor at 8:00 a. m. 
C)  Visiting a debtor at work if the employer permits personal visits. 
D)  Using neighbors to locate the debtor.

Question 10

John loans George money and they sign a written agreement whereby George will repay John in monthly installments.Is this loan subject to the Truth-in-Lending Act?

Accepted Answer

A)  Yes, if the loan is for more than $1,000. 
B)  Yes, if John and George live in different states. 
C)  No, if John is not in the business of offering credit. 
D)  No, if John and George are related. 
A)  Yes, if the loan is for more than $1,000. 
B)  Yes, if John and George live in different states. 
C)  No, if John is not in the business of offering credit. 
D)  No, if John and George are related.

Question 11

The most important federal agency involved in consumer protection is the Consumer Protection Agency.

Accepted Answer

A) True 
 B)False

Question 12

Mabel is a single,40-year-old who has borrowed money on numerous occasions.Her payment record has been good,except she has been delinquent in paying a few bills.Which of the following is true regarding credit information gathered on Mabel?

Accepted Answer

A)  As Mabel has been delinquent, she waives her right to see the credit files. 
B)  If Mabel is rejected for a loan because of the consumer report, the lender must tell her the source of the report. 
C)  Mabel has a right to have the information regarding her delinquency in paying a few loans stricken from her credit record because her record has generally been good. 
D)  Mabel's only legal remedy, if there is erroneous information in her credit file, is to report the problem to the FTC for enforcement. 
A)  As Mabel has been delinquent, she waives her right to see the credit files. 
B)  If Mabel is rejected for a loan because of the consumer report, the lender must tell her the source of the report. 
C)  Mabel has a right to have the information regarding her delinquency in paying a few loans stricken from her credit record because her record has generally been good. 
D)  Mabel's only legal remedy, if there is erroneous information in her credit file, is to report the problem to the FTC for enforcement.

Question 13

John purchased $600 worth of clothes from Clothing Mart. He paid for the clothes with a credit card. When he received his statement, he sent the credit card company a check for $600. The credit card company mistakenly recorded his payment as $60. When John received his next statement, he noticed the $540 error and wrote to the credit card company.

A couple of weeks later when he attempted to use his card to buy gasoline, he was told by the cashier that the card had been canceled and she was instructed to take his card. John was shocked, embarrassed, and angry. When he contacted the credit card company, it pointed out a provision in his initial contract for the card that stated the company could revoke his card privileges at any time with or without cause.
-Such a provision within the credit card contract is:

Accepted Answer

A)  unconscionable. 
B)  an illegal contract of adhesion. 
C)  not binding, as a person cannot waive the statutory rights granted to him by federal credit card legislation. 
D)  valid unless state legislation prohibits such clauses. 
A)  unconscionable. 
B)  an illegal contract of adhesion. 
C)  not binding, as a person cannot waive the statutory rights granted to him by federal credit card legislation. 
D)  valid unless state legislation prohibits such clauses.

Question 14

Employers must have permission from job applicants to request a consumer report.

Accepted Answer

A) True 
 B)False

Question 15

Lewis had a minimum payment of $87 due on March 12 for one of his credit cards.He was unable to send the payment until March 31,at which time he sent $100.With his next credit card statement,Lewis received notification that,because of his late payment,his interest rate on his outstanding balance would be increasing from its normal 14.99% to the default rate of 27.99%.His credit card company:

Accepted Answer

A)  has the right to increase his interest rate because of the late payment. 
B)  violated the Credit Card Act of 2009. 
C)  may not increase his interest rate on outstanding balances unless Lewis is more than 60 days late in making his minimum payment. 
D)  may not increase his interest rate on outstanding balances because Lewis sent more than his minimum payment for March. 
E)  Both (b) and (c). 
A)  has the right to increase his interest rate because of the late payment. 
B)  violated the Credit Card Act of 2009. 
C)  may not increase his interest rate on outstanding balances unless Lewis is more than 60 days late in making his minimum payment. 
D)  may not increase his interest rate on outstanding balances because Lewis sent more than his minimum payment for March. 
E)  Both (b) and (c).

Question 16

The Federal Trade Commission Act considers the terms "deceptive" and "unfair" synonymous when determining what practices should be prohibited.

Accepted Answer

A) True 
 B)False

Question 17

Under the TILA,consumers have the right to rescind a mortgage for up to:

Accepted Answer

A)  five business days (Monday through Friday) after signing. 
B)  three business days (Monday through Saturday) after the signing. 
C)  three years from the date of the mortgage if the lender does not comply with the disclosure provisions of the TILA. 
D)  Both (a) and (c). 
E)  Both (b) and (c). 
A)  five business days (Monday through Friday) after signing. 
B)  three business days (Monday through Saturday) after the signing. 
C)  three years from the date of the mortgage if the lender does not comply with the disclosure provisions of the TILA. 
D)  Both (a) and (c). 
E)  Both (b) and (c).

Question 18

Millie ordered clothes from a mail order catalog.No time was specified as to when the goods would be shipped.In such a case the FTC requires that the company must ship the goods to Millie within:

Accepted Answer

A)  3 business days after receiving the order. 
B)  10 business days after receiving the order. 
C)  30 days after receipt of the order. 
D)  a reasonable time and within time lines consistent with industry standards. 
A)  3 business days after receiving the order. 
B)  10 business days after receiving the order. 
C)  30 days after receipt of the order. 
D)  a reasonable time and within time lines consistent with industry standards.

Question 19

Under the TILA,for subprime mortgage loans,a lender:

Accepted Answer

A)  may charge a prepayment penalty any time the loan is paid off before its due date. 
B)  must collect property taxes and homeowner's insurance for all first mortgages. 
C)  may not change the monthly payments during the period of the loan. 
D)  may consider the value of the mortgaged home as the sole asset in determining the homeowner's ability to repay the loan. 
A)  may charge a prepayment penalty any time the loan is paid off before its due date. 
B)  must collect property taxes and homeowner's insurance for all first mortgages. 
C)  may not change the monthly payments during the period of the loan. 
D)  may consider the value of the mortgaged home as the sole asset in determining the homeowner's ability to repay the loan.

Question 20

A debit card:

Accepted Answer

A)  is legally like a credit card. 
B)  is also known as a check card. 
C)  if stolen subjects the owner to the same liability as a stolen credit card. 
D)  if stolen subjects to owner to responsibility for all losses if the theft is not reported to the bank within two days of discovering the theft. 
A)  is legally like a credit card. 
B)  is also known as a check card. 
C)  if stolen subjects the owner to the same liability as a stolen credit card. 
D)  if stolen subjects to owner to responsibility for all losses if the theft is not reported to the bank within two days of discovering the theft.

Exam 25: Consumer Law

Consumers have a right to:

Grady receives a $2,940 credit card bill in the mail from a company with which he doesn't have an account.He fears he is a victim of identity theft.Does he have any recourse?

Which of the following statements expresses the purpose of the Truth-in-Lending Act?

Richard received his credit card bill and noticed an error.He wrote to the company the next week,pointing out the error in his bill.Under the law,what is the credit card issuer's obligation once it receives Richard's letter?

Under FTC rules,a customer can cancel a door-to-door sales contract within:

If your wallet,which contained a credit card,was stolen and you called the credit card company immediately,your maximum liability would be?

The Trimbles apply to Community Savings & Loan for a ten-year installment loan of $20,000 to remodel their kitchen.Discuss the disclosures Community is required to make.

Monty applies for a $32,000 loan to purchase a truck for his family's use.This loan is subject to TILA disclosure requirements.

The Fair Debt Collection Practices Act prohibits which of the following practices?

John loans George money and they sign a written agreement whereby George will repay John in monthly installments.Is this loan subject to the Truth-in-Lending Act?

The most important federal agency involved in consumer protection is the Consumer Protection Agency.

Mabel is a single,40-year-old who has borrowed money on numerous occasions.Her payment record has been good,except she has been delinquent in paying a few bills.Which of the following is true regarding credit information gathered on Mabel?

Employers must have permission from job applicants to request a consumer report.

The Federal Trade Commission Act considers the terms "deceptive" and "unfair" synonymous when determining what practices should be prohibited.

Under the TILA,consumers have the right to rescind a mortgage for up to:

Millie ordered clothes from a mail order catalog.No time was specified as to when the goods would be shipped.In such a case the FTC requires that the company must ship the goods to Millie within:

Under the TILA,for subprime mortgage loans,a lender:

A debit card:

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