Question 1

A subprime mortgage refers to a mortgage securing a loan that is issued:

Accepted Answer

A)  to consumers at an interest rate lower than the prime interest rate established by the treasury. 
B)  on property that cannot pass a reasonable safety inspection. 
C)  to customers with excellent creditworthiness at a lower than ordinary market rate. 
D)  to consumers who do not qualify for ordinary market rates due to a lack of creditworthiness. 
E)  to consumers with excellent creditworthiness at a zero rate of interest. 
A)  to consumers at an interest rate lower than the prime interest rate established by the treasury. 
B)  on property that cannot pass a reasonable safety inspection. 
C)  to customers with excellent creditworthiness at a lower than ordinary market rate. 
D)  to consumers who do not qualify for ordinary market rates due to a lack of creditworthiness. 
E)  to consumers with excellent creditworthiness at a zero rate of interest.

Question 2

In a bankruptcy proceeding, which of the following debts will have the lowest priority?

Accepted Answer

A)  Government tax claims. 
B)  Employees who are owed wages earned within 90 days of filing. 
C)  Consumers who have paid deposits or prepayments for undelivered goods or services up to $1,800 per consumer. 
D)  Creditors with claims in the ordinary course of business incurred after the bankruptcy was filed. 
E)  Creditors with claims that arise from the costs of preserving and administering the debtor's estate. 
A)  Government tax claims. 
B)  Employees who are owed wages earned within 90 days of filing. 
C)  Consumers who have paid deposits or prepayments for undelivered goods or services up to $1,800 per consumer. 
D)  Creditors with claims in the ordinary course of business incurred after the bankruptcy was filed. 
E)  Creditors with claims that arise from the costs of preserving and administering the debtor's estate.

Question 3

Using zip codes as a factor in denying credit has been determined to be illegal by the FTC due to possible discrimination that could result.

Accepted Answer

A) True 
 B)False

Question 4

Section 5 of the _____ Act prohibits unfair or deceptive acts or trade practices.

Accepted Answer

A)  Equal Credit Opportunity 
B)  Fair Credit Reporting 
C)  Truth-in-Lending 
D)  Fair Debt Collection Practices 
E)  Federal Trade Commission 
A)  Equal Credit Opportunity 
B)  Fair Credit Reporting 
C)  Truth-in-Lending 
D)  Fair Debt Collection Practices 
E)  Federal Trade Commission

Question 5

Under the FCRA, an injured consumer may only recover:

Accepted Answer

A)  actual damages, attorney's fees, and in some instances speculative damages. 
B)  actual damages. 
C)  punitive damages and the attorney's fees but no actual damages. 
D)  actual damages, attorney's fees, and in some instances punitive damages. 
E)  actual damages and the attorney's fees but no punitive damages. 
A)  actual damages, attorney's fees, and in some instances speculative damages. 
B)  actual damages. 
C)  punitive damages and the attorney's fees but no actual damages. 
D)  actual damages, attorney's fees, and in some instances punitive damages. 
E)  actual damages and the attorney's fees but no punitive damages.

Question 6

What is the legal recourse for a debtor in case of violations of the Fair Debt Collection Practices Act by a collector?

Accepted Answer

Violations of the Fair Debt Collection P

Question 7

Most of the laws which apply the concepts of privacy protect the individual from being overwhelmed by the intrusive power of the government and other large organizations.

Accepted Answer

A) True 
 B)False

Question 8

In a bankruptcy proceeding against an individual, debts are adjusted under Chapter 13 of the bankruptcy law.

Accepted Answer

A) True 
 B)False

Question 9

The Magnuson-Moss Warranty Act applies to all consumer product warranties regarding products priced _____ or more.

Accepted Answer

A)  $10 
B)  $15 
C)  $20 
D)  $25 
E)  $50 
A)  $10 
B)  $15 
C)  $20 
D)  $25 
E)  $50

Question 10

Trade practice regulation ensures fair competition by preventing those who would deceive consumers from diverting trade from those who compete honestly.

Accepted Answer

A) True 
 B)False

Question 11

Under the cease and desist order issued by the Bureau of Consumer Protection, a party assents to sign an order which restrains the promotional activity deemed offensive.

Accepted Answer

A) True 
 B)False

Question 12

Under the Right to Financial Privacy Act of 1978, the individual depositor has the right to challenge an agency's legal basis for seeking the financial records.

Accepted Answer

A) True 
 B)False

Question 13

If there are violations of the Equal Credit Opportunity Act (ECOA), affected consumers:

Accepted Answer

A)  have the right to file a petition to the president to seek redressal. 
B)  cannot seek public enforcement by the FTC but have the right to sue under private remedies provided in the Act. 
C)  have to depend on public enforcement by the FTC as they do not have the right to sue. 
D)  have the right to sue as well as the right to seek public enforcement by the FTC. 
E)  have the right to resort to intimidatory tactics against the guilty party. 
A)  have the right to file a petition to the president to seek redressal. 
B)  cannot seek public enforcement by the FTC but have the right to sue under private remedies provided in the Act. 
C)  have to depend on public enforcement by the FTC as they do not have the right to sue. 
D)  have the right to sue as well as the right to seek public enforcement by the FTC. 
E)  have the right to resort to intimidatory tactics against the guilty party.

Question 14

_____ refers to the efforts of a debt collector to locate the debtor which may require that the collector contact third parties who know of the debtor's whereabouts.

Accepted Answer

A)  Bright-line rule 
B)  Judicial restraint 
C)  Prior restraint 
D)  Redlining 
E)  Skip-tracing 
A)  Bright-line rule 
B)  Judicial restraint 
C)  Prior restraint 
D)  Redlining 
E)  Skip-tracing

Question 15

What is the purpose of the Privacy Act of 1974?

Accepted Answer

The Privacy Act places constraints on ho

Question 16

Bankruptcy laws are subject to regulatory interpretation.

Accepted Answer

A) True 
 B)False

Question 17

In what way does the Federal Trade Commission (FTC) exercise its quasi-legislative power? What is the nature and effect of this exercise?

Accepted Answer

At the recommendation of the Bureau of C

Question 18

The basic penalty for trade practice violations under the FTC Act is a civil fine of not more than $10,000 per violation.

Accepted Answer

A) True 
 B)False

Question 19

Big Prime is a major lender licensed to lend only in Delaware. Big Prime finds that customers in Sussex County perform far below customers in the other counties. Assume that the county which is heavily into farming and low-paying industrial jobs is 25 percent African-American and has a 40 percent population of legal and illegal immigrants. Big Prime finds that while it is profitable overall, it is losing money on the Sussex County loans. Further research reveals that Sussex County is one of the poorest-performing customer bases nationwide and most companies doing business there are losing money. The board of directors decides not to make any more loans in Sussex County. Big Prime is violating provisions of the:

Accepted Answer

A)  Federal Trade Commission. 
B)  Fair Credit Reporting Act. 
C)  Truth-in-Lending Act. 
D)  Fair Debt Collection Practices Act. 
E)  Equal Credit Opportunity Act. 
A)  Federal Trade Commission. 
B)  Fair Credit Reporting Act. 
C)  Truth-in-Lending Act. 
D)  Fair Debt Collection Practices Act. 
E)  Equal Credit Opportunity Act.

Question 20

Voluntary bankruptcy proceedings are filed by the creditor.

Accepted Answer

A) True 
 B)False

Exam 18: Privacy and Consumer Protection

A subprime mortgage refers to a mortgage securing a loan that is issued:

In a bankruptcy proceeding, which of the following debts will have the lowest priority?

Using zip codes as a factor in denying credit has been determined to be illegal by the FTC due to possible discrimination that could result.

Section 5 of the _____ Act prohibits unfair or deceptive acts or trade practices.

Under the FCRA, an injured consumer may only recover:

What is the legal recourse for a debtor in case of violations of the Fair Debt Collection Practices Act by a collector?

Most of the laws which apply the concepts of privacy protect the individual from being overwhelmed by the intrusive power of the government and other large organizations.

In a bankruptcy proceeding against an individual, debts are adjusted under Chapter 13 of the bankruptcy law.

The Magnuson-Moss Warranty Act applies to all consumer product warranties regarding products priced _____ or more.

Trade practice regulation ensures fair competition by preventing those who would deceive consumers from diverting trade from those who compete honestly.

Under the cease and desist order issued by the Bureau of Consumer Protection, a party assents to sign an order which restrains the promotional activity deemed offensive.

Under the Right to Financial Privacy Act of 1978, the individual depositor has the right to challenge an agency's legal basis for seeking the financial records.

If there are violations of the Equal Credit Opportunity Act (ECOA), affected consumers:

_____ refers to the efforts of a debt collector to locate the debtor which may require that the collector contact third parties who know of the debtor's whereabouts.

What is the purpose of the Privacy Act of 1974?

Bankruptcy laws are subject to regulatory interpretation.

In what way does the Federal Trade Commission (FTC) exercise its quasi-legislative power? What is the nature and effect of this exercise?

The basic penalty for trade practice violations under the FTC Act is a civil fine of not more than $10,000 per violation.

Voluntary bankruptcy proceedings are filed by the creditor.

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