Question 1

The FTC's ____ states that the information received in consumer reports must be properly destroyed after it has been used for its proper purpose.

Accepted Answer

A)  Fairness Rule 
B)  R-value Rule 
C)  Disposal Rule 
D)  Destruction Rule 
E)  Shredded Documents Rule 
A)  Fairness Rule 
B)  R-value Rule 
C)  Disposal Rule 
D)  Destruction Rule 
E)  Shredded Documents Rule

Question 2

The "Mail Order Rule" states that if a company:

Accepted Answer

A)  buys products through the mail it must use the U.S. Postal Service, and not a private courier system 
B)  buys products through the mail from a foreign country, it must register with the FTC 
C)  sells products through the mail it must have a reasonable basis for expecting to ship the products within the time advertised 
D)  sells products through the mail is must provide toll-free 800 phone numbers for its customers to use so that they do not spend additional money placing an order 
E)  none of the other choices are correct 
A)  buys products through the mail it must use the U.S. Postal Service, and not a private courier system 
B)  buys products through the mail from a foreign country, it must register with the FTC 
C)  sells products through the mail it must have a reasonable basis for expecting to ship the products within the time advertised 
D)  sells products through the mail is must provide toll-free 800 phone numbers for its customers to use so that they do not spend additional money placing an order 
E)  none of the other choices are correct

Question 3

The FTC has held that if an automobile is advertised to get 35 miles per gallon in highway driving, that must be the average mileage that ordinary drivers will get in ordinary driving, otherwise it is deceptive advertising.

Accepted Answer

A) True 
 B)False

Question 4

The Federal Trade Commission regulates:

Accepted Answer

A)  deceptive business practices 
B)  false advertising claims 
C)  highly risky stock deals 
D)  deceptive business practices and false advertising claims 
E)  deceptive business practices and false advertising claims and highly risky stock deals 
A)  deceptive business practices 
B)  false advertising claims 
C)  highly risky stock deals 
D)  deceptive business practices and false advertising claims 
E)  deceptive business practices and false advertising claims and highly risky stock deals

Question 5

The Mail Order Rule attempts to reduce the incidence of deceptive practices in the first-class postal business.

Accepted Answer

A) True 
 B)False

Question 6

If a creditor is found to have violated the Equal Credit Opportunity Act, he is liable for:

Accepted Answer

A)  actual damages 
B)  punitive damages up to $10,000 
C)  attorney's fees 
D)  court costs 
E)  all of the other specific choices are correct 
A)  actual damages 
B)  punitive damages up to $10,000 
C)  attorney's fees 
D)  court costs 
E)  all of the other specific choices are correct

Question 7

Under the Lanham Act, Ford was able to sue General Motors for false advertising that hurt Ford pickup sales, and collected over $100 million in damages.

Accepted Answer

A) True 
 B)False

Question 8

The Consumer Leasing Act applies to consumer leases for all of the following except a lease:

Accepted Answer

A)  of living room furniture for 18 months 
B)  of a car for two years 
C)  of a computer for a year 
D)  of a big-screen television for six months 
E)  all of the other choices are covered if for personal use 
A)  of living room furniture for 18 months 
B)  of a car for two years 
C)  of a computer for a year 
D)  of a big-screen television for six months 
E)  all of the other choices are covered if for personal use

Question 9

Before passage of the 1938 Food, Drug, and Cosmetic Act, drugs were:

Accepted Answer

A)  all prescribed by physician only 
B)  all prescribed by pharmacists and physicians 
C)  regulated by the FDA only if they posed "serious risks" to human health 
D)  either legal or illegal 
E)  completely unregulated, you could buy anything 
A)  all prescribed by physician only 
B)  all prescribed by pharmacists and physicians 
C)  regulated by the FDA only if they posed "serious risks" to human health 
D)  either legal or illegal 
E)  completely unregulated, you could buy anything

Question 10

Which of the following is part of the FTC policy statement for determining if a practice is deceptive?

Accepted Answer

A)  there is a representation or omission of information in a communication to consumers 
B)  the deception is likely to mislead a reasonable consumer 
C)  the deception may cause physical harm to consumers 
D)  there is a representation or omission of information in a communication to consumers and the deception is likely to mislead a reasonable consumer 
E)  there is a representation or omission of information in a communication to consumers and the deception is likely to mislead a reasonable consumer and the deception may cause physical harm to consumers 
A)  there is a representation or omission of information in a communication to consumers 
B)  the deception is likely to mislead a reasonable consumer 
C)  the deception may cause physical harm to consumers 
D)  there is a representation or omission of information in a communication to consumers and the deception is likely to mislead a reasonable consumer 
E)  there is a representation or omission of information in a communication to consumers and the deception is likely to mislead a reasonable consumer and the deception may cause physical harm to consumers

Question 11

Which of the following was NOT a factor in triggering the passage of the Pure Food and Drug Act:

Accepted Answer

A)  studies by a government chemist showed some food preservatives were harmful to humans 
B)  publication of Upton Sinclair's book The Jungle 
C)  deaths in the Spanish-American War from impure food 
D)  deaths in WWII from impure drugs 
E)  all of the other specific choices are correct 
A)  studies by a government chemist showed some food preservatives were harmful to humans 
B)  publication of Upton Sinclair's book The Jungle 
C)  deaths in the Spanish-American War from impure food 
D)  deaths in WWII from impure drugs 
E)  all of the other specific choices are correct

Question 12

Under the Fair and Accurate Credit Transaction Act, the FTC has issued regulations:

Accepted Answer

A)  that credit card receipts may not show more than the last five numbers of a card 
B)  that consumers must be allowed to correct bad information on their credit reports 
C)  that consumer information must be properly disposed of 
D)  that credit card details may not be printed on credit receipts 
E)  all of the other choices 
A)  that credit card receipts may not show more than the last five numbers of a card 
B)  that consumers must be allowed to correct bad information on their credit reports 
C)  that consumer information must be properly disposed of 
D)  that credit card details may not be printed on credit receipts 
E)  all of the other choices

Question 13

The FTC uses the ____ to put its policy about advertising into effect:

Accepted Answer

A)  advertising monitoring program 
B)  advertising regulation program 
C)  advertising substantiation program 
D)  advertising decree program 
E)  legitimate advertising program 
A)  advertising monitoring program 
B)  advertising regulation program 
C)  advertising substantiation program 
D)  advertising decree program 
E)  legitimate advertising program

Question 14

Most advanced European nations have substantially stronger regulations of drugs than exist in the U.S.

Accepted Answer

A) True 
 B)False

Question 15

The FTC has the authority to attack deceptive sales practices via the Internet just like any other sale.

Accepted Answer

A) True 
 B)False

Question 16

In recent years, the FDA has allowed drugs that show some promise for life-threatening diseases such as AIDS to be used more quickly than normally.

Accepted Answer

A) True 
 B)False

Question 17

What is not a feature of the Consumer Credit Protection Act:

Accepted Answer

A)  abusive debt collection tactics are limited 
B)  credit reporting agencies must follow certain rules about accuracy in consumer reports 
C)  creditors must follow certain procedures for handling charges disputed by consumers 
D)  creditors must disclose all relevant terms in credit transactions 
E)  all of the other choices are features of the Act 
A)  abusive debt collection tactics are limited 
B)  credit reporting agencies must follow certain rules about accuracy in consumer reports 
C)  creditors must follow certain procedures for handling charges disputed by consumers 
D)  creditors must disclose all relevant terms in credit transactions 
E)  all of the other choices are features of the Act

Question 18

The Fair Debt Collection Practices Act applies to:

Accepted Answer

A)  all creditors attempting to collect debts 
B)  merchants attempting to collect debts from their customers, but not to financial institutions 
C)  debt collection agencies 
D)  merchants attempting to collect debts from their customers, but not to financial institutions, and to debt collection agencies 
E)  all creditors attempting to collect debts and merchants attempting to collect debts from their customers, but not to financial institutions, and to debt collection agencies 
A)  all creditors attempting to collect debts 
B)  merchants attempting to collect debts from their customers, but not to financial institutions 
C)  debt collection agencies 
D)  merchants attempting to collect debts from their customers, but not to financial institutions, and to debt collection agencies 
E)  all creditors attempting to collect debts and merchants attempting to collect debts from their customers, but not to financial institutions, and to debt collection agencies

Question 19

The Fair Credit Billing Act that governs credit card issuers:

Accepted Answer

A)  prohibits mailing unsolicited credit cards 
B)  applies only to credit cards that charge interest on existing balances 
C)  establishes procedures for lost or stolen credit cards 
D)  prohibits mailing unsolicited credit cards and establishes procedures for lost or stolen credit cards 
E)  prohibits mailing unsolicited credit cards and establishes procedures for lost or stolen credit cards and establishes procedures for lost or stolen credit cards 
A)  prohibits mailing unsolicited credit cards 
B)  applies only to credit cards that charge interest on existing balances 
C)  establishes procedures for lost or stolen credit cards 
D)  prohibits mailing unsolicited credit cards and establishes procedures for lost or stolen credit cards 
E)  prohibits mailing unsolicited credit cards and establishes procedures for lost or stolen credit cards and establishes procedures for lost or stolen credit cards

Question 20

Under the FTC's advertising substantiation program, if any consumers will be misled by an advertisement, it must be modified.

Accepted Answer

A) True 
 B)False

Exam 19: Consumer Protection

The FTC's ____ states that the information received in consumer reports must be properly destroyed after it has been used for its proper purpose.

The "Mail Order Rule" states that if a company:

The FTC has held that if an automobile is advertised to get 35 miles per gallon in highway driving, that must be the average mileage that ordinary drivers will get in ordinary driving, otherwise it is deceptive advertising.

The Federal Trade Commission regulates:

The Mail Order Rule attempts to reduce the incidence of deceptive practices in the first-class postal business.

If a creditor is found to have violated the Equal Credit Opportunity Act, he is liable for:

Under the Lanham Act, Ford was able to sue General Motors for false advertising that hurt Ford pickup sales, and collected over $100 million in damages.

The Consumer Leasing Act applies to consumer leases for all of the following except a lease:

Before passage of the 1938 Food, Drug, and Cosmetic Act, drugs were:

Which of the following is part of the FTC policy statement for determining if a practice is deceptive?

Which of the following was NOT a factor in triggering the passage of the Pure Food and Drug Act:

Under the Fair and Accurate Credit Transaction Act, the FTC has issued regulations:

The FTC uses the ____ to put its policy about advertising into effect:

Most advanced European nations have substantially stronger regulations of drugs than exist in the U.S.

The FTC has the authority to attack deceptive sales practices via the Internet just like any other sale.

In recent years, the FDA has allowed drugs that show some promise for life-threatening diseases such as AIDS to be used more quickly than normally.

What is not a feature of the Consumer Credit Protection Act:

The Fair Debt Collection Practices Act applies to:

The Fair Credit Billing Act that governs credit card issuers:

Under the FTC's advertising substantiation program, if any consumers will be misled by an advertisement, it must be modified.

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