Deck 17: Consumer-Protection

Question 1

A 2016 amendment to the Agricultural Marketing Act requires food producers to label food products that contain genetically modified organisms (GMOs).

Answer 1

True

Question 2

Congress has made it a federal crime to engage in the extortionate extension of credit.

Answer 2

True

Question 3

The U.S.Food and Drug Administration inspects facilities engaged in egg production.

Answer 3

False

Question 4

Under the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the CAN-SPAM Act),online merchants cannot transfer a customer's payment information to a third-party merchant for a separate online sale without first obtaining the customer's consent to the transfer.

Question 5

Bitcoin gift cards are highly regulated currency and can be used with Amazon,Best Buy,and iTunes.

Question 6

In CASE 17.1 United States v.DeCoster (2016),the court held that a corporate officer is held liable for failure to take necessary measures to prevent or remedy violations of the Food,Drug,and Cosmetic Act,regardless of whether they were aware of or intended to cause the violation.

Question 7

The FDA has authority to regulate certain manufacturing aspects of tobacco,but it cannot regulate marketing of cigarettes or nicotine.

Question 8

In general,consumer protection law at the state level is more stringent than federal law.

Question 9

Executive branch regulatory agencies are located in cabinet departments.

Question 10

The Drug Quality and Security Act,enacted in 2013,made the compounding of drugs illegal.

Question 11

The Flammable Fabrics Act is an example of a federal law regulating the labeling of clothing.

Question 12

The Federal Commerce Commission has adopted guidelines specifying when manufacturers and marketers can label their products "Made in USA."

Question 13

The Fair Debt Collection Practices Act applies only to third-party debt collectors.

Question 14

The labeling of medical devices is under the jurisdiction of the Food and Drug Administration.

Question 15

If a used car is sold without a warranty,the label must state that the car is being sold "as is" as part of the FTC-required Buyer's Guide label.

Question 16

States may regulate odometer tampering,but there is no federal law that does so.

Question 17

The Fair Credit Reporting Act gives consumers a right to have corrected copies of their credit reports sent to creditors.

Question 18

Generic drugs can be approved for use on a showing that they are identical to approved brand-name drugs.

Question 19

The Truth-in-Lending Act (TILA)is intended to assure a truthful loan application by the consumer.

Question 20

Courts usually consider advertisements to be only an offer to deal.

Question 21

Which of the following categories of drugs cannot be approved by the Food and Drug Administration?

A) Schedule I
B) Schedule C
C) Schedule 2
D) Schedule D

Question 22

Under the Magnuson-Moss Warranty Act,a seller who offers a written warranty on goods must provide a full warranty.

Question 23

The Food and Drug Administration shares responsibility with the __________ for regulating pesticide residues on food.

A) Department of Agriculture
B) Department of Insecticide
C) Federal Trade Commission
D) Environmental Protection Agency

Question 24

The Consumer Credit Protection Act limits the garnishment of wages to the lesser of _____ of the debtor's disposable earnings for the week or the amount by which disposable earnings for the week exceed _____ times the current federal minimum hourly wage.

A) 10%; 30
B) 25%; 30
C) 30%; 25
D) 35%; 40

Question 25

Which of the following is allowed to broadband providers,according to the Open Internet Rules that went into effect in 2015?

A) Blocking access to legal services or devices
B) Eliminating pay-for-play fast lanes
C) Providing paid prioritization over other Internet traffic for consideration
D) Throttling lawful Internet traffic based on content

Question 26

The Federal Trade Commission has _____ commissioners who serve for _____-year terms.

A) seven; four
B) ten; five
C) six; six
D) five; seven

Question 27

The Truth-in-Lending Act provides consumers a right of __________ whenever their home is used as collateral for credit except for original construction or acquisition.

A) rescission
B) redemption
C) new mortgage
D) refinance

Question 28

Which of the following is NOT true regarding bioengineered insects and pathogens?

A) Scientists have created genetically engineered insects and microbes to fight pests that harm crops.
B) The Environmental Protection agency issues permits for the use of bioengineered insects.
C) The Food and Drug Administration issues permits for the use of bioengineered pathogens.
D) The Environmental Protection Agency issues permits for the use of bioengineered pathogens.

Question 29

A car loan is an example of a closed-end credit transaction.

Question 30

Before implementing a mandatory safety standard,the Consumer Product Safety Commission must find that __________ are inadequate.

A) voluntary standards
B) safety guidelines
C) product designs
D) warnings

Question 31

Caveat emptor means:

A) "let the buyer beware."
B) "let the buyer prevail."
C) "let the market decide."
D) "let the seller beware."

Question 32

The FDA sets _____ standards for what is considered adulterated natural foods.

A) mislabeling
B) unavoidable
C) zero tolerance
D) minimum tolerance

Question 33

Caveat venditor means:

A) "let the buyer beware."
B) "let the buyer prevail."
C) "let the market decide."
D) "let the seller beware."

Question 34

Which of the following is true regarding the Equal Credit Opportunity Act?

A) It prohibits discrimination against credit applicants based on gender and marital status.
B) It does not apply to applicants who derive their income from public assistance.
C) It applies only to business credit.
D) It applies only to consumer credit.

Question 35

The __________ has the primary responsibility for regulating the packaging and labeling of commodities other than food,drugs,medical devices,and cosmetics.

A) Federal Commerce Commission
B) Federal Interstate Regulating Commission
C) Federal Trade Commission
D) Uniform Commodity Commission

Question 36

The Truth-in-Lending Act limits credit card liability to $50 per card for unauthorized charges made before a card issuer is notified of a lost or stolen card.

Question 37

Point-of-purchase nutrition information labeling is voluntary for:

A) many raw foods.
B) vending machine products.
C) packages containing more than one serving.
D) food supplements that qualify as medicinal.

Question 38

Rules regarding the sale of e-cigarettes include all of the following EXCEPT:

A) purchaser must be 18 or older.
B) anyone under the age of 27 must show photo identification before being allowed to purchase tobacco products.
C) free samples are allowed to those over 18 showing photo identification.
D) vending machine sales are generally prohibited.

Question 39

Which of the following is NOT true regarding the use of genetically modified foods internationally?

A) The European Parliament refused to approve legislation requiring the labeling of genetically modified foods.
B) Australia requires the labeling of genetically modified food.
C) The only GMO crop China grows is cotton.
D) In New Zealand,if a genetically modified ingredient is "highly refined," the labeling requirements concerning GMOs do not apply.

Question 40

Under the FTC's __________,"all or virtually all" of the product must be made in the fifty states,the District of Columbia,or the U.S.territories and possessions.​

A) ​Made in USA policy
B) ​Made within USA policy
C) ​Wood Products Labeling Act
D) ​Labeling Preemption Act

Question 41

Which of the following are protected categories under the Equal Credit Opportunity Act?

A) Gender,race,color,religion,and national origin
B) Gender,race,color,religion,national origin,and age
C) Gender,marital status,race,color,religion,national origin,and age
D) Gender,marital status,race,color,religion,national origin,age,and residents of disadvantaged neighborhoods

Question 42

Discuss the purpose of the purpose of the Consumer Product Safety Commission and the process by which it sets mandatory safety standards.Discuss fully.

Question 43

Which of the following is true regarding FDA approval of medical devices in relation to state law claims for failure to warn?

A) FDA approval of medical devices does not preempt state failure-to-warn claims arising out of injuries caused by the device.
B) FDA approval of medical devices preempts state failure-to-warn claims arising out of injuries caused by the device,regardless of whether the device was exempted from full review.
C) FDA approval of medical devices preempts state failure-to-warn claims arising out of injuries caused by the device,unless the device was exempted from full review.
D) FDA approval of certain medical devices does not preempt state failure-to-warn claims arising out of injuries caused by the device,but federal law preempts state failure-to-warn claims related to nonapproved devices.

Question 44

The FTC now requires used car sellers to affix a __________ to the cars that they sell.

A) fixed price
B) buyer's guide
C) base price
D) discount price

Question 45

Which of the following is true regarding the use of irradiated foods in the United States?

A) Irradiated foods are outlawed.
B) Irradiation is allowed only for fruits and vegetables,and no notice is required.
C) Irradiation is allowed for fresh and frozen red meat,and no notice is required.
D) Irradiation is allowed for a variety of fresh and frozen meat,fruits,and vegetables,but must be labeled as treated.

Question 46

In general,when will the FDA require prescription use of a drug?

A) If the drug is toxic,requires a physician's supervision for safe use,or is addictive
B) Only if the drug is toxic
C) Only if the drug is either toxic or requires a physician's supervision for safe use
D) Only if the drug is addictive or requires a physician's supervision for safe use

Question 47

Which,according to the Food and Drug Administration,of the following is part of the definition of a drug?

A) Articles used for food or drink for humans or other animals
B) Chewing gum
C) Articles intended to affect the function of the body
D) Articles used for components of drink

Question 48

The Federal Trade Commission's "Guides for the Use of Environmental Marketing Claims" include all of the following EXCEPT:

A) the requirement of scientific testing necessary to substantiate environmental claims.
B) the application of the scientific validity of a consumer's belief as the standard for reasonableness.
C) the requirement of the marketer to specify whether the claim applies to the entire product,its packaging,a service,or a portion of those components.
D) a prohibition against the overstatement of any benefits claimed.

Question 49

Drug Company X has a prescription drug that will make people look younger and lose weight.The problem is that it causes significant stomach problems.Arden,an executive of Drug Company X,wants to advertise the drug's benefits on television and radio but leave out the stomach problems.Arden's secretary,Beck,warns that Arden could run into problems and is not sure the drug can even be advertised.Arden disagrees,stating that it is up to physicians to warn patients of possible complications.Arden decides not to provide any information regarding contacting Company X so that no one at Company X will be annoyed by receiving numerous inquiries about obtaining the drug's benefits.What would an FDA representative likely say in regard to Arden's plan? Provide your response in detail.

Question 50

Which of the following is true regarding the placement of health claims for foods on labels?

A) The FDA permits health food claims on labels without FDA approval as a new drug or the risk of sanctions for issuing a misbranded product,as long as the claim has been certified by the FDA as being supported by significant scientific agreement.
B) The FDA disallows health food claims on labels unless the food has been approved by the FDA as a type of new drug for the health concern involved.
C) The FDA allows health food claims on labels so long as the claim has not been certified by the FDA as false and misleading.
D) The FDA allows health food claims on labels without prior approval of the FDA only for organically grown foods.

Question 51

Which of the following is true regarding USDA standards for organic food?

A) Pesticides,genetic engineering,growth hormones,or irradiation may not be used.
B) Pesticides may be used,but genetic engineering and the use of growth hormones is disallowed.
C) Pesticides and irradiation may not be used,but genetic engineering and the use of growth hormones is allowed.
D) The USDA has no standards for organic food.

Question 52

_____ is the legal procedure by which a creditor may collect a debt by attaching a portion of a debtor's weekly wages.

A) Rescission
B) Garnishment
C) Joinder
D) Attachment

Question 53

Set forth the four main provisions of the CAN-SPAM Act.

Question 54

The first step in the FDA approval process for new drugs is their classification by the __________ based on currently accepted medical use and potential for abuse.

A) National Institute of Health
B) The Consumer Product Safety Commission
C) Drug Enforcement Administration
D) Congress

Question 55

What is the purpose of the Truth in Lending Act? What does it provide regarding the liability of credit cardholders for unauthorized charges when a card is lost or stolen?

Question 56

In 2014,the _______ announced it considered ______ to be a convertible virtual currency.

A) Wall Street Protection Group; ETF funds
B) Consumer Financial Protection Bureau; bitcoin
C) Internal Revenue Service; bitcoin
D) Internal Revenue Service; gold

Question 57

In CASE 17.2,XYZ Two Way Radio Service,Inc.v.Uber Technologies,Inc.(2016),the court analyzed whether Uber's claims regarding background checks and safety constituted false advertising in violation of the Lanham Act,among other claims.How did the court rule?

A) The court held that Uber's statements were subjective claims that "cannot be proven true or false" and are actionable under the Lanham Act.
B) The court held that Uber's statements that were challenged in the suit were nonactionable puffery under the Lanham Act.
C) The court held that Uber's statements regarding its background checks were false or misleading.
D) The court agreed with XYZ Two Way Radio Service,Inc.'s claims that certain Uber statements constituted false advertising in violation of the Lanham Act.

Question 58

Which of the following is NOT an FDA requirement for food manufacturing and processing facilities?

A) Take preemptive measures to prevent contamination.
B) Identify foods at high risk for foodborne illness outbreaks.
C) Develop an electronic tracking system that follows food from "farm to fork."
D) Block foods from facilities outside the United States.

Question 59

The ______ controls the disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available and avoid the uninformed use of credit.

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

Question 60

The __________ has primary responsibility for regulating the labeling of food.

A) Federal Trade Commission
B) Food and Drug Administration
C) The Consumer Product Safety Commission
D) The Federal Trade Commission

Question 61

Explain the Federal Trade Commission's current stand on ownership of broadcasting stations and why some consider it controversial.

Question 62

When does an advertiser violate the Federal Trade Commission bait and switch advertising rules?