Question 1

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission can:

Accepted Answer

A) do nothing. 
B) require the seller to make additional advertisements to correct it. 
C) require the company to go out of business. 
D) report the company to the President of the United States for deregulation. 
A) do nothing. 
B) require the seller to make additional advertisements to correct it. 
C) require the company to go out of business. 
D) report the company to the President of the United States for deregulation.

Question 2

The Equal Credit Opportunity Act prohibits discrimination based on what factors in the extension of credit?

Accepted Answer

A) Gender, marital status, or race. 
B) Religion, national origin, and age. 
C) Income, occupation, or apparent stability. 
D) Both (a) and (b). 
A) Gender, marital status, or race. 
B) Religion, national origin, and age. 
C) Income, occupation, or apparent stability. 
D) Both (a) and (b).

Question 3

The Federal Trade Commission has overall enforcement authority for the Equal Credit Opportunity Act.

Accepted Answer

A) True 
 B)False

Question 4

The NHTSA has the authority to set motor vehicle safety standards that promote crash prevention.

Accepted Answer

A) True 
 B)False

Question 5

Enforcement and interpretation of the Truth-in-Lending Act was given to the:

Accepted Answer

A) Commerce Department. 
B) Justice Department. 
C) Federal Trade Commission. 
D) Federal Reserve Board. 
A) Commerce Department. 
B) Justice Department. 
C) Federal Trade Commission. 
D) Federal Reserve Board.

Question 6

ARM disclosure rules apply to any loan that is:

Accepted Answer

A) an open-ended consumer transaction. 
B) secured with real or personal property. 
C) longer than one year in duration. 
D) All of the above. 
A) an open-ended consumer transaction. 
B) secured with real or personal property. 
C) longer than one year in duration. 
D) All of the above.

Question 7

Since 1976, the Food and Drug Administration has had the increased authority to:

Accepted Answer

A) subject medical devices to premarket approval. 
B) require manufacturers to do corrective advertising. 
C) make manufacturers responsible for seeing that drugs are proven safe and effective before being sold. 
D) make package inserts or labels on drugs list possible side effects. 
A) subject medical devices to premarket approval. 
B) require manufacturers to do corrective advertising. 
C) make manufacturers responsible for seeing that drugs are proven safe and effective before being sold. 
D) make package inserts or labels on drugs list possible side effects.

Question 8

If a debtor defaults on a credit contract, the creditor may:

Accepted Answer

A) impose a late charge. 
B) garnish wages if there has been a court proceeding to enforce collection of a judgment. 
C) take possession of the property securing the debt and sell it. 
D) All of the above. 
E) (a) and (c) are correct. 
A) impose a late charge. 
B) garnish wages if there has been a court proceeding to enforce collection of a judgment. 
C) take possession of the property securing the debt and sell it. 
D) All of the above. 
E) (a) and (c) are correct.

Question 9

The Truth-in-Lending Act:

Accepted Answer

A) applies only to such lenders as banks and savings and loans. 
B) prohibits inclusion of inaccurate or specified obsolete information in consumer reports. 
C) is regulated by the Federal Reserve Board under Regulation Z. 
D) allows a buyer who is financing his home with a first mortgage to rescind that transaction within three days. 
A) applies only to such lenders as banks and savings and loans. 
B) prohibits inclusion of inaccurate or specified obsolete information in consumer reports. 
C) is regulated by the Federal Reserve Board under Regulation Z. 
D) allows a buyer who is financing his home with a first mortgage to rescind that transaction within three days.

Question 10

The Credit Card Fraud Act contains criminal penalties for violations of its provisions.

Accepted Answer

A) True 
 B)False

Question 11

A collection agency may not personally contact the debtor if the debtor has engaged a lawyer to represent him.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following would NOT be considered to be an example of open-ended credit?

Accepted Answer

A) A gasoline credit card account. 
B) A VISA account. 
C) A real estate mortgage account. 
D) A department store credit card account. 
A) A gasoline credit card account. 
B) A VISA account. 
C) A real estate mortgage account. 
D) A department store credit card account.

Question 13

Which of the following acts mandates clear disclosure of relevant credit information in consumer credit transactions? It requires conspicuous disclosure of finance charges and that interest rates be calculated in a uniform manner.

Accepted Answer

A) Equal Credit Opportunity Act 
B) Fair Credit Billing Act 
C) Truth-in-Lending Act 
D) FTC Act 
A) Equal Credit Opportunity Act 
B) Fair Credit Billing Act 
C) Truth-in-Lending Act 
D) FTC Act

Question 14

The Credit Card Fraud Act prohibits which of the following practices?

Accepted Answer

A) Possessing unauthorized cards. 
B) Counterfeiting or altering credit cards. 
C) Using accounts numbers alone. 
D) Using cards obtained from a third party with his consent when the third party conspires to report the cards as stolen. 
E) All of the above. 
A) Possessing unauthorized cards. 
B) Counterfeiting or altering credit cards. 
C) Using accounts numbers alone. 
D) Using cards obtained from a third party with his consent when the third party conspires to report the cards as stolen. 
E) All of the above.

Question 15

The FTC remedy of "affirmative disclosure" would require:

Accepted Answer

A) a new ad that admits the first ad was false. 
B) providing certain information in a company's ad. 
C) that the advertiser desist from deception in all products it markets. 
D) All of the above would be required. 
A) a new ad that admits the first ad was false. 
B) providing certain information in a company's ad. 
C) that the advertiser desist from deception in all products it markets. 
D) All of the above would be required.

Question 16

The Gramm-Leach-Bliley Financial Modernization Act is administered and enforced solely through two federal agencies: the SEC and FTC.

Accepted Answer

A) True 
 B)False

Question 17

Northstar Sporting Goods sells consumer goods to Lena for $85 and provides a written warranty regarding the quality of the goods.Northstar:

Accepted Answer

A) must designate the warranty as full or limited. 
B) may disclaim any and all implied warranties as long as the disclaimer is conspicuous. 
C) may modify the implied warranties. 
D) All of the above. 
A) must designate the warranty as full or limited. 
B) may disclaim any and all implied warranties as long as the disclaimer is conspicuous. 
C) may modify the implied warranties. 
D) All of the above.

Question 18

The FTC has issued three policy statements addressing the meaning of unfairness and has provided that an injury is unfair if:

Accepted Answer

A) when applying a cost-benefit analysis to the situation, the costs are lower than the benefits to consumers or competition. 
B) it is substantial and not outweighed by any benefits to consumers or competition. 
C) it is one that consumers themselves could not reasonably have avoided. 
D) Both (a) and (b) are correct. 
E) Both (b) and (c) are correct. 
A) when applying a cost-benefit analysis to the situation, the costs are lower than the benefits to consumers or competition. 
B) it is substantial and not outweighed by any benefits to consumers or competition. 
C) it is one that consumers themselves could not reasonably have avoided. 
D) Both (a) and (b) are correct. 
E) Both (b) and (c) are correct.

Question 19

The Consumer Product Safety Commission cannot issue an order banning a hazardous product from the market.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following best expresses the policy behind the Truth-in-Lending Act?

Accepted Answer

A) To help borrowers by requiring lenders to charge a "reasonable" rate of interest as determined by the Federal Reserve Board. 
B) To help small business by requiring that lenders not use as collateral for secured loans a business's most important assets. 
C) To help debtors for loans for personal, family, household, or agricultural purpose to be armed with the necessary information on a loan to better bargain for credit and to choose the creditor with the best terms. 
D) To help lenders by permitting them to investigate a person's credit history without having to worry about state libel laws. 
A) To help borrowers by requiring lenders to charge a "reasonable" rate of interest as determined by the Federal Reserve Board. 
B) To help small business by requiring that lenders not use as collateral for secured loans a business's most important assets. 
C) To help debtors for loans for personal, family, household, or agricultural purpose to be armed with the necessary information on a loan to better bargain for credit and to choose the creditor with the best terms. 
D) To help lenders by permitting them to investigate a person's credit history without having to worry about state libel laws.

Exam 45: Consumer Protection

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission can:

The Equal Credit Opportunity Act prohibits discrimination based on what factors in the extension of credit?

The Federal Trade Commission has overall enforcement authority for the Equal Credit Opportunity Act.

The NHTSA has the authority to set motor vehicle safety standards that promote crash prevention.

Enforcement and interpretation of the Truth-in-Lending Act was given to the:

ARM disclosure rules apply to any loan that is:

Since 1976, the Food and Drug Administration has had the increased authority to:

If a debtor defaults on a credit contract, the creditor may:

The Truth-in-Lending Act:

The Credit Card Fraud Act contains criminal penalties for violations of its provisions.

A collection agency may not personally contact the debtor if the debtor has engaged a lawyer to represent him.

Which of the following would NOT be considered to be an example of open-ended credit?

Which of the following acts mandates clear disclosure of relevant credit information in consumer credit transactions? It requires conspicuous disclosure of finance charges and that interest rates be calculated in a uniform manner.

The Credit Card Fraud Act prohibits which of the following practices?

The FTC remedy of "affirmative disclosure" would require:

The Gramm-Leach-Bliley Financial Modernization Act is administered and enforced solely through two federal agencies: the SEC and FTC.

Northstar Sporting Goods sells consumer goods to Lena for $85 and provides a written warranty regarding the quality of the goods.Northstar:

The FTC has issued three policy statements addressing the meaning of unfairness and has provided that an injury is unfair if:

The Consumer Product Safety Commission cannot issue an order banning a hazardous product from the market.

Which of the following best expresses the policy behind the Truth-in-Lending Act?

Introduction to Law

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Constitutional Law

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Intentional Torts

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Introduction to Contracts

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Relationship of Principal and Agent

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Formation and Internal Relations of General Partnerships

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Nature and Formation of Corporations

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Secured Transactions and Suretyship

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