Exam 19: Consumer Protection

The Kefauver Amendment of 1962 requires the FDA to approve drugs based on proven effectiveness, not just safety.

A financial institution (such as a bank) that issues electronic fund-transfer cards must provide consumers:

The Food and Drug Administration:

Under the Fair Credit Reporting Act, a consumer reporting agency (credit bureau) must:

Fact Pattern 19-1 In 1999, the Drugs-R-Us began testing its new drug, Reduceo, a medicine to help people lose weight. Tests looked promising and, in 2006, the company applied to the FDA for approval to market Reduceo as a prescription drug. In March 2009, the FDA granted Drug-R-Us approval to market Reduceo. Reduceo was sold with some "diet enhancing" cookies that contained no drugs but were claimed to help dieting with Reduceo. Frank saw an ad for the new drug. The Reduceo ad stated that it was a "wonder drug" and "tests prove it is the safest weight reduction drug on the market today!" Frank was interested and made an appointment to see his doctor. Frank's physician prescribed the new drug for his patient. Frank had no success using other weight-loss drugs, and dieting and exercise seemed ineffective. Frank took Reduceo from June until the end of August and lost 25 lbs. He also ate Reduceo's cookies. He was delighted with his weight loss, but was concerned because dots appeared before his eyes, causing disorientation. One day, the dots appeared before Frank's eyes while he was driving. He became disoriented and hit a tree and was seriously injured. He sued Drugs-R-Us, alleging negligence in manufacturing and inadequate warning of possible effects, as well as for deceptive advertising. -Refer to Fact Pattern 19-1. After Frank had his accident, other people who were taking Reduceo reported seeing spots and becoming disoriented. If many people taking experience this side effect, what enforcement activities could the FDA use?

Which of the following is NOT a required disclosure under the Consumer Leasing Act:

An art gallery sells fake "authorized" Vincent Van Gogh prints to clients for $50,000 each, telling buyers their purchases are good investments. If the FTC sues, the gallery will:

The Federal Trade Commission was established in:

Under the Truth-in-Lending Act, if a creditor violates disclosure requirements, liability will be imposed only if monetary damages to the consumer can be shown.

The current time frame for developing a new drug and clearing all the FDA hurdles to market it is about:

In Schuchmann v. Air Services Heating and Air Conditioning, where a company refused to provide air conditioning service after five years on a product with a "lifetime warranty," the court held that lifetime does not mean that; it is commonly understood to mean a "reasonable" length of time.

In Wyeth v. Levine, where Levine sued the drug developer Wyeth for failure to warn after she lost her forearm and hand after being given a drug by IV-push, a method known to have risks, the U.S. Supreme Court:

The part of the Dodd-Frank Act, a major financial reform bill passed in 2010, that has the largest impact on consumer credit markets is its:

The Delaney Clause (the Food Additives Amendment) allows the FDA to regulate food additives.

Medical devices are subject to FDA regulation.

When a FTC trade regulation rule is finalized it becomes part of the:

The most heavily controlled medical devices are:

The Fair Debt Collection Practices Act prohibits debt collectors from discussing a debtor's debts with their employer.

The Food and Drug Administration does not have which of the following powers:

Fact Pattern 19-1 In 1999, the Drugs-R-Us began testing its new drug, Reduceo, a medicine to help people lose weight. Tests looked promising and, in 2006, the company applied to the FDA for approval to market Reduceo as a prescription drug. In March 2009, the FDA granted Drug-R-Us approval to market Reduceo. Reduceo was sold with some "diet enhancing" cookies that contained no drugs but were claimed to help dieting with Reduceo. Frank saw an ad for the new drug. The Reduceo ad stated that it was a "wonder drug" and "tests prove it is the safest weight reduction drug on the market today!" Frank was interested and made an appointment to see his doctor. Frank's physician prescribed the new drug for his patient. Frank had no success using other weight-loss drugs, and dieting and exercise seemed ineffective. Frank took Reduceo from June until the end of August and lost 25 lbs. He also ate Reduceo's cookies. He was delighted with his weight loss, but was concerned because dots appeared before his eyes, causing disorientation. One day, the dots appeared before Frank's eyes while he was driving. He became disoriented and hit a tree and was seriously injured. He sued Drugs-R-Us, alleging negligence in manufacturing and inadequate warning of possible effects, as well as for deceptive advertising. -Refer to Fact Pattern 19-1. When Drugs-R-Us submitted Reduceo for FDA approval, what standard would the agency have applied in it approval process? Drugs-R-Us would: