Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The Magnuson-Moss Warranty Act covers all consumer products regardless of their cost.

Accepted Answer

A) True 
 B)False

Question 3

Richard received his credit card bill and noticed an error.He wrote to the company the next week,pointing out the error in his bill.Under the law,what is the credit card's obligation once it receives Richard's letter?

Accepted Answer

The answer of Richard received his credit card bill and...

Question 4

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

Accepted Answer

A)  call the debtor between 8 a.m. and 9 p.m. 
B)  call acquaintances of the debtor to locate the debtor. 
C)  contact the debtor at work if not prohibited by the employer. 
D)  All of the above are permissible.

Question 5

If a consumer cancels a door-to-door sale within the required time,how many days does the seller have to return the buyer's money?

Accepted Answer

A)  Three. 
B)  Ten. 
C)  Twenty-one. 
D)  Thirty.

Question 6

Under the TILA,for subprime mortgage loans,a lender:

Accepted Answer

A)  may charge a prepayment penalty any time the loan is paid off before its due date. 
B)  must collect property taxes and homeowner's insurance for all first mortgages. 
C)  may not change the amount of the monthly payment during the period of the loan. 
D)  may consider the value of the home in determining the borrower's ability to repay the loan.

Question 7

What federal law applies to this particular situation?

Accepted Answer

A)  Truth in Lending Act. 
B)  Fair Credit Billing Act. 
C)  Fair Credit Reporting Act. 
D)  Equal Credit Opportunity Act.

Question 8

"Bait and switch" tactics are not a violation of FTC rules if the consumer is given a choice of which product to buy.

Accepted Answer

A) True 
 B)False

Question 9

If you lease a car rather than buy one on credit,you have no statutory consumer protection.

Accepted Answer

A) True 
 B)False

Question 10

In a closed-end credit transaction:

Accepted Answer

A)  the lender makes a series of loans with a maximum amount set before the first loan is made. 
B)  if the lender is offering a "teaser rate," this must be clearly disclosed. 
C)  the Federal Reserve Board should be consulted before a lender is chosen. 
D)  there is only one loan, and the borrower knows the amount and payment schedule in advance.

Question 11

Prime Products,Inc.was going to be able to ship the comforter Margaret ordered within three weeks instead of the seven days it had originally promised.Prime 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

Mabel is a single 40-year-old who has borrowed money on numerous occasions.Her payment record has been good,except she has been delinquent in paying a few bills.Which of the following is true regarding credit information gathered on Mabel?

Accepted Answer

A)  Since Mabel has been delinquent, she waives her right to see the credit files. 
B)  If Mabel is rejected for a loan because of the consumer report, the lender must tell her the source of the report. 
C)  Mabel has a right to have the information regarding her delinquency in paying a few loans stricken from her credit record because her record has generally been good. 
D)  Mabel's only legal remedy, if there is erroneous information in her credit file, is to report the problem to the FTC for enforcement.

Question 13

Grady receives a $12,940 credit card bill in the mail from a company with which he did not open an account.He fears he is a victim of identity theft.Does he have any recourse?

Accepted Answer

A)  Yes, under the Fair and Accurate Credit Transactions Act (FACT
A) , Grady can place an alert in his credit files using the National Fraud Alert System. 
B)  Yes, under the Fair Credit Billing Act he may call the credit card company to complain about the bill, and the credit card company must investigate and correct any errors. 
C)  Yes, under the Truth in Lending Act, Grady is liable only for the first $50 in unauthorized charges. 
D)  No, he should have been more careful with his personal information so no one could have applied for credit in his name.

Question 14

Consumers have a right to:

Accepted Answer

A)  exclude as obsolete information about a bankruptcy discharge seven years previously. 
B)  know the name of anyone to whom credit information has been supplied by a consumer reporting agency within the last three years. 
C)  have their own version of a disputed credit situation included in their credit file. 
D)  have their credit rating reviewed at least once a year.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The FTC can impose a fine for each violation of a voluntary compliance affidavit,a consent order,an FTC rule,or a cease and desist order,even one issued against someone else.

Accepted Answer

A) True 
 B)False

Question 17

The Magnuson-Moss Warranty Act only covers face-to-face sales,not catalog or Internet sales.

Accepted Answer

A) True 
 B)False

Question 18

Millie ordered clothes from a mail order catalog.No time was specified as to when the goods would be shipped.In such a case the FTC requires that the company must ship the goods to Millie:

Accepted Answer

A)  within 3 business days after receiving the order. 
B)  within 10 business days after receiving the order. 
C)  within 30 days after receipt of the order. 
D)  within a reasonable time and within time lines consistent with industry standards.

Question 19

Don received in the mail merchandise he never ordered.The package was addressed to him,and when he opened it he saw a brochure stating he could keep the products for only $19.95.If he chose not to keep the products he was instructed to mail them back within five days.Don:

Accepted Answer

A)  can keep and use the merchandise without having to pay for it. 
B)  can keep the merchandise only if he pays the $19.95. 
C)  must send the merchandise back within five days if he does not want it. 
D)  None of the above is correct.

Question 20

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.

Exam 39: Consumer Law

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

The Magnuson-Moss Warranty Act covers all consumer products regardless of their cost.

Richard received his credit card bill and noticed an error.He wrote to the company the next week,pointing out the error in his bill.Under the law,what is the credit card's obligation once it receives Richard's letter?

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

If a consumer cancels a door-to-door sale within the required time,how many days does the seller have to return the buyer's money?

Under the TILA,for subprime mortgage loans,a lender:

What federal law applies to this particular situation?

"Bait and switch" tactics are not a violation of FTC rules if the consumer is given a choice of which product to buy.

If you lease a car rather than buy one on credit,you have no statutory consumer protection.

In a closed-end credit transaction:

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

Mabel is a single 40-year-old who has borrowed money on numerous occasions.Her payment record has been good,except she has been delinquent in paying a few bills.Which of the following is true regarding credit information gathered on Mabel?

Grady receives a $12,940 credit card bill in the mail from a company with which he did not open an account.He fears he is a victim of identity theft.Does he have any recourse?

Consumers have a right to:

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

The FTC can impose a fine for each violation of a voluntary compliance affidavit,a consent order,an FTC rule,or a cease and desist order,even one issued against someone else.

The Magnuson-Moss Warranty Act only covers face-to-face sales,not catalog or Internet sales.

Millie ordered clothes from a mail order catalog.No time was specified as to when the goods would be shipped.In such a case the FTC requires that the company must ship the goods to Millie:

Don received in the mail merchandise he never ordered.The package was addressed to him,and when he opened it he saw a brochure stating he could keep the products for only $19.95.If he chose not to keep the products he was instructed to mail them back within five days.Don:

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?