Question 1

Under the Fair Debt Collection Practices Act,a collection company is legally permitted to

Accepted Answer

A) call the debtor at any time of the day. 
B) call acquaintances of the debtor to tell them that the consumer is in debt. 
C) call the debtor even if the debtor has requested in writing that he or she wishes no further contact. 
D) visit the debtor at work if the consumer's employer permits such contact. 
A) call the debtor at any time of the day. 
B) call acquaintances of the debtor to tell them that the consumer is in debt. 
C) call the debtor even if the debtor has requested in writing that he or she wishes no further contact. 
D) visit the debtor at work if the consumer's employer permits such contact. D

Question 2

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

Accepted Answer

A) To require lenders to charge a "reasonable" rate of interest 
B) To regulate interest rates and terms of loans 
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 regulate interest rates and terms of loans 
C) To provide consumers with information necessary to make the best credit decision 
D) To help lenders limit state laws C

Question 3

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. C

Question 4

The Magnuson-Moss Warranty Act requires manufacturers to provide a warranty on their products regardless of cost.

Accepted Answer

A) True 
 B)False

Question 5

The maximum rate of interest for credit transactions is established by

Accepted Answer

A) state law. 
B) federal law. 
C) the Federal Reserve Board. 
D) the FTC. 
A) state law. 
B) federal law. 
C) the Federal Reserve Board. 
D) the FTC.

Question 6

Suppose Bill's credit card is stolen and he notified his credit card company of this fact.Which of the following is true regarding the amount of unauthorized charges made before Bill notified his credit card company?

Accepted Answer

A) Bill is not responsible for any of the unathorized charges. 
B) Bill is responsible for the first $50 of unathorized charges. 
C) Bill is responsible for the first $100 of unauthorized charges. 
D) Bill is responsible for half of the unauthorized charges. 
A) Bill is not responsible for any of the unathorized charges. 
B) Bill is responsible for the first $50 of unathorized charges. 
C) Bill is responsible for the first $100 of unauthorized charges. 
D) Bill is responsible for half of the unauthorized charges.

Question 7

With regard to mortgages,the Consumer Finance Protection Bureau (CFPB)requires mortgage servicers

Accepted Answer

A) to contact borrowers who are 36 days late in making a payment. 
B) to wait 180 days after nonpayment before beginning foreclosure. 
C) to credit payments within 3 days after they are received. 
D) to extend delinquent borrowers additional time to repay the loan. 
A) to contact borrowers who are 36 days late in making a payment. 
B) to wait 180 days after nonpayment before beginning foreclosure. 
C) to credit payments within 3 days after they are received. 
D) to extend delinquent borrowers additional time to repay the loan.

Question 8

Electronic payments via a telephone,computer,or wire transfers are not regulated by the government.

Accepted Answer

A) True 
 B)False

Question 9

Marla applies for and receives a three-year loan through Sharkey Lenders for $5,000 at 27% APR.If the loan agreement violates the applicable usury statute,Marla may be able to keep

Accepted Answer

A) the interest that exceeds the usury limit. 
B) all of the interest on the loan. 
C) the interest and the $5,000. 
D) Any of the answer choices are possible, depending on where the loan was made. 
A) the interest that exceeds the usury limit. 
B) all of the interest on the loan. 
C) the interest and the $5,000. 
D) Any of the answer choices are possible, depending on where the loan was made.

Question 10

Brett applies for a $60,000 loan to purchase a tractor for his farm business.This loan is subject to TILA disclosure requirements.

Accepted Answer

A) True 
 B)False

Question 11

Prime Products,Inc.found out that it was going to take three weeks to ship the comforter Margaret ordered instead of the seven days it had originally promised her.Prime Products must cancel Margaret's order and notify her that it can deliver within three weeks if she wants to reorder.

Accepted Answer

A) True 
 B)False

Question 12

The FTC may consider an act unfair if it simply violates public policy.

Accepted Answer

A) True 
 B)False

Question 13

Company policy of PushOne,Inc.is to block the company name and telephone number on potential customers' Caller ID systems so they won't know the call is from a telemarketer.This policy violates FTC rules.

Accepted Answer

A) True 
 B)False

Question 14

In 30-year mortgages,the finance charge typically exceeds the amount of the principal.

Accepted Answer

A) True 
 B)False

Question 15

Under the Truth In Lending Act,a lender must disclose all of the following EXCEPT

Accepted Answer

A) the average percentage rate charged by competitors. 
B) the amount financed. 
C) the annual percentage rate (APR). 
D) the finance charge. 
A) the average percentage rate charged by competitors. 
B) the amount financed. 
C) the annual percentage rate (APR). 
D) the finance charge.

Question 16

Under the Fair and Accurate Credit Transactions Act (FACTA),

Accepted Answer

A) a creditor may not discriminate against a borrower on the basis of race, sex, religion, or age. 
B) a debt collector may not harass or abuse debtors. 
C) a credit card company must promptly investigate and respond to any consumer complaints about a credit card bill. 
D) a consumer has the right to obtain one free credit report every year from each of the three major reporting agencies. 
A) a creditor may not discriminate against a borrower on the basis of race, sex, religion, or age. 
B) a debt collector may not harass or abuse debtors. 
C) a credit card company must promptly investigate and respond to any consumer complaints about a credit card bill. 
D) a consumer has the right to obtain one free credit report every year from each of the three major reporting agencies.

Question 17

The Trimbles apply to Community Bank for an installment loan of $20,000 to remodel their bathroom.Discuss the disclosures Community Bank is required to make.

Accepted Answer

The Truth in Lending Act will apply to t

Question 18

In 1969,the federal government estimated that consumer products caused 30,000 deaths,110,000 disabling injuries and 20 million trips to the doctor.The product category causing the majority of harm was

Accepted Answer

A) automobiles. 
B) children's toys. 
C) power tools. 
D) food products. 
A) automobiles. 
B) children's toys. 
C) power tools. 
D) food products.

Question 19

The Truth-in-Lending Act applies to private individuals who loan money.

Accepted Answer

A) True 
 B)False

Question 20

MoneyMaker Toy Company violated the safety standards set forth by the Consumer Product Safety Commission when it produced a toy gun that caused injury to hundreds of children.Because of MoneyMaker's actions

Accepted Answer

A) the CPSC can impose civil penalties on the company. 
B) the CPSC can impose criminal penalties on the company. 
C) users can sue for damages, including attorney's fees, if MoneyMaker knew it was violating a consumer product safety rule when it produced the guns. 
D) All of the answers are correct. 
A) the CPSC can impose civil penalties on the company. 
B) the CPSC can impose criminal penalties on the company. 
C) users can sue for damages, including attorney's fees, if MoneyMaker knew it was violating a consumer product safety rule when it produced the guns. 
D) All of the answers are correct.

Exam 39: Consumer Protection

Under the Fair Debt Collection Practices Act,a collection company is legally permitted to

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

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 Magnuson-Moss Warranty Act requires manufacturers to provide a warranty on their products regardless of cost.

The maximum rate of interest for credit transactions is established by

Suppose Bill's credit card is stolen and he notified his credit card company of this fact.Which of the following is true regarding the amount of unauthorized charges made before Bill notified his credit card company?

With regard to mortgages,the Consumer Finance Protection Bureau (CFPB)requires mortgage servicers

Electronic payments via a telephone,computer,or wire transfers are not regulated by the government.

Marla applies for and receives a three-year loan through Sharkey Lenders for $5,000 at 27% APR.If the loan agreement violates the applicable usury statute,Marla may be able to keep

Brett applies for a $60,000 loan to purchase a tractor for his farm business.This loan is subject to TILA disclosure requirements.

Prime Products,Inc.found out that it was going to take three weeks to ship the comforter Margaret ordered instead of the seven days it had originally promised her.Prime Products must cancel Margaret's order and notify her that it can deliver within three weeks if she wants to reorder.

The FTC may consider an act unfair if it simply violates public policy.

Company policy of PushOne,Inc.is to block the company name and telephone number on potential customers' Caller ID systems so they won't know the call is from a telemarketer.This policy violates FTC rules.

In 30-year mortgages,the finance charge typically exceeds the amount of the principal.

Under the Truth In Lending Act,a lender must disclose all of the following EXCEPT

Under the Fair and Accurate Credit Transactions Act (FACTA),

The Trimbles apply to Community Bank for an installment loan of $20,000 to remodel their bathroom.Discuss the disclosures Community Bank is required to make.

In 1969,the federal government estimated that consumer products caused 30,000 deaths,110,000 disabling injuries and 20 million trips to the doctor.The product category causing the majority of harm was

The Truth-in-Lending Act applies to private individuals who loan money.

MoneyMaker Toy Company violated the safety standards set forth by the Consumer Product Safety Commission when it produced a toy gun that caused injury to hundreds of children.Because of MoneyMaker's actions

Introduction to Law

Business Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

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Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Cyberlaw and Privacy

Introduction to Contracts

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Consideration

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Written Contracts

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Remedies

Practical Contracts

Introduction to Sales

Ownership, Risk and Warranties

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Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants' Liability

Agency Law

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Starting a Business: LLCs and Other Options

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Life and Death of a Corporation

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