Question 1

The Federal Trade Commission Act considers the terms "deceptive" and "unfair" to be synonymous when determining what practices should be prohibited.

Accepted Answer

A) True 
 B)False

Question 2

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  False

Question 3

Brooke uses her credit card to purchase a lawn mower at the local "big box" hardware store,but when she tries to use the mower for the first time,she finds it is not self-propelled as advertised.Does she have any recourse?

Accepted Answer

Since Brooke used a credit card for the ...

Question 4

Which of the following statements express the purpose of the Truth-in-Lending Act?

Accepted Answer

A)  To require lenders to charge a "reasonable" rate of interest.
B)  To help small business.
C)  To provide consumers with information necessary to make the best credit decision.
D)  To help lenders limit state laws.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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 7

The issue in the Gray v.American Express Co.case involved:

Accepted Answer

A)  lost credit cards.
B)  disputed bills.
C)  unfair interest rates.
D)  privacy.

Question 8

Explain the difference between a debit and a credit card and discuss the potential liability for a lost or stolen card.

Accepted Answer

A credit card evidences an open-end cred...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

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 12

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. A

Question 13

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

Under the Fair Credit Billing Act,the co...

Question 14

The Equal Credit Opportunity Act makes it illegal for a lender to discriminate against a potential borrower because of race,national origin,religion,or sex,but it is permissible to treat a borrower differently if he or she is on welfare.

Accepted Answer

A) True 
 B)False  False

Question 15

Company policy of PushOne,Inc.is to block the company name and telephone number on potential customers' Caller ID systems so they won't know the call is from a telemarketer.This policy violates FTC rules.

Accepted Answer

A) True 
 B)False

Question 16

The Fair Debt Collection Practices Act prohibits which of the following practices?

Accepted Answer

A)  A debt collector falsely representing himself as a lawyer.
B)  A debt collector telephoning the debtor at 8:00am.
C)  Visiting a debtor at work if the employer permits personal visits.
D)  Using neighbors to locate the debtor.

Question 17

What are the three tests or elements used by the FTC to determine whether a particular act is an unfair trade practice?

Accepted Answer

The FTC considers an act to be unfair if...

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Consumer credit reporting agencies are unregulated governmental agencies.

Accepted Answer

A) True 
 B)False

Question 20

The maximum rate of interest for credit transactions is established by:

Accepted Answer

A)  state law.
B)  federal law.
C)  the Federal Reserve Board.
D)  the FTC.

Exam 31: Consumer Protection

The Federal Trade Commission Act considers the terms "deceptive" and "unfair" to be synonymous when determining what practices should be prohibited.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedFalse

Brooke uses her credit card to purchase a lawn mower at the local "big box" hardware store,but when she tries to use the mower for the first time,she finds it is not self-propelled as advertised.Does she have any recourse?

Correct AnswerverifiedSince Brooke used a credit card for the ...View AnswerShow Answer

Which of the following statements express the purpose of the Truth-in-Lending Act?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

The issue in the Gray v.American Express Co.case involved:

Correct AnswerverifiedShow Answer

Explain the difference between a debit and a credit card and discuss the potential liability for a lost or stolen card.

Correct AnswerverifiedA credit card evidences an open-end cred...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Consumers have a right to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedA

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?

Correct AnswerverifiedUnder the Fair Credit Billing Act,the co...View AnswerShow Answer

The Equal Credit Opportunity Act makes it illegal for a lender to discriminate against a potential borrower because of race,national origin,religion,or sex,but it is permissible to treat a borrower differently if he or she is on welfare.

Correct AnswerverifiedFalse

Company policy of PushOne,Inc.is to block the company name and telephone number on potential customers' Caller ID systems so they won't know the call is from a telemarketer.This policy violates FTC rules.

Correct AnswerverifiedShow Answer

The Fair Debt Collection Practices Act prohibits which of the following practices?

Correct AnswerverifiedShow Answer

What are the three tests or elements used by the FTC to determine whether a particular act is an unfair trade practice?

Correct AnswerverifiedThe FTC considers an act to be unfair if...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Consumer credit reporting agencies are unregulated governmental agencies.

Correct AnswerverifiedShow Answer

The maximum rate of interest for credit transactions is established by:

Correct AnswerverifiedShow Answer

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False

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Since Brooke used a credit card for the ...
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A credit card evidences an open-end cred...
View Answer

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A

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Under the Fair Credit Billing Act,the co...
View Answer

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False

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The FTC considers an act to be unfair if...
View Answer

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