Question 1

Mouth-Waterin' Treats Company wants to sell its candy in a normal-sized package labeled "Gigantic Size." NuFabrics,Inc. ,wants to advertise its sweaters as having "That Wool Feel," but does not want to specify on labels that the sweaters are 100 percent polyester.Can these firms market their products as they would like? If not,why not?

Accepted Answer

The answer of Mouth-Waterin' Treats Company wants to sell its...

Question 2

Consumer Finance Corporation (CFC)extends credit to consumers.CFC applies several criteria to decide customers' "suitability" for credit.Under the Equal Credit Opportunity Act,CFC cannot base its decision on a customer's

Accepted Answer

The Equal Credit Opportunity Act prohibits discrimination based on race, color, religion, national origin, sex, marital status, and age. Therefore, CFC cannot base its decision on a customer's race.

Question 3

Tia takes out a loan from Urban Bank.When she fails to make the scheduled payments,the lender advises her of further action that it will take.This violates

Accepted Answer

The lender advising Tia of further action for failing to make scheduled payments does not violate any federal law listed. The Fair Debt Collection Practices Act applies to debt collectors, not original creditors like Urban Bank. The Fair and Accurate Credit Transactions Act and the Truth-in-Lending Act do not specifically address the scenario of a lender advising a borrower of further actions due to non-payment.

Question 4

Auto & Life Insurance Company fails to notify its new customers when they are charged higher premium rates as a result of their credit scores.This is a willful violation of

Accepted Answer

The Fair Credit Reporting Act (FCRA) requires that consumers be notified when adverse actions are taken against them based on information in their credit reports, which includes being charged higher insurance premiums.

Question 5

Rollo has a credit card from Shopping Cards,Inc.To change the terms,Shopping

Accepted Answer

Shopping Cards, Inc. must give Rollo advance notice if they want to change the terms of his credit card. This is required by federal law, specifically the Truth in Lending Act.

Question 6

QT Collection Agency calls Rob several times a day,and in the middle of the night,about an overdue bill that Standard Credit Company turned over to QT for collection.This is a violation of

Accepted Answer

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from making repeated phone calls to debtors at inconvenient times (such as in the middle of the night) in order to harass, oppress, or abuse them. QT Collection Agency's behavior is therefore a violation of the FDCPA.

Question 7

Credit Agency Corporation issues consumer credit reports.The company generally does not delete unverifiable or erroneous information from the reports.Under the Fair Credit Reporting Act,this firm may be subject to

Accepted Answer

Under the Fair Credit Reporting Act, consumers have the right to dispute inaccurate information on their credit reports, and credit reporting agencies have a duty to investigate such disputes within a certain time frame. If the agency fails to do so and does not correct the inaccurate information, the consumer may be entitled to damages. Therefore, choice B is the correct answer.

Question 8

Lu's application to Metro Bank for a credit card is denied.Logan can obtain information on his credit history in a credit agency's files under

Accepted Answer

The Fair Credit Reporting Act provides consumers with the right to obtain a copy of their credit report from credit reporting agencies and dispute any inaccuracies they find. This would allow Logan to obtain information on his credit history and potentially correct any errors that may have contributed to the denial of his credit card application from Metro Bank.

Question 9

Leo's application to Metro Bank for a credit card is denied on the basis of what Leo believes is an inaccurate credit report.Leo should

Accepted Answer

Leo should obtain his credit report and notify the reporting agency of any inaccuracies. This will give him the opportunity to correct any errors in his report, which could potentially improve his credit score and increase his chances of being approved for credit in the future. Appealing to the appropriate federal or state agency or filing a lawsuit may be options if the reporting agency does not correct the inaccuracies, but these should be considered as a last resort. Applying for a credit card with a different financial institution right away may not be the best option as Leo could potentially face the same issue with his credit report.

Question 10

Owen buys a restored 1969 Dodge Charger from Prime Restorations,Inc. ,on credit but makes no payments on the account.Quentin,the owner of Prime Restorations,calls Owen at home on a Monday morning at three A.M.Quentin represents himself as RiteNow Collection Agency and demands payment "or else." The next day,Quentin sends Owen notice that he has thirty days to request verification of the debt,during which its payment will be suspended,but that if he does not pay the full amount due within five business days,Quentin will arrange for the "destruction of Owen's good credit rating." Which laws has Quentin violated,if any,and in what ways?

Accepted Answer

The answer of Owen buys a restored 1969 Dodge Charger...

Question 11

The credit department of Mega-Mart often calls Nora at work about an overdue bill over the objection of Nora's employer.This is a violation of

Accepted Answer

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from contacting consumers at their place of employment if the collector knows or has reason to know that the employer prohibits such communication. Therefore, calling Nora at work over the objection of her employer is a violation of the FDCPA.

Question 12

Kip opens an account at Lotsa Goodies,and buys a digital music player and other items,but makes no payments on the account.To collect the debt,a Lotsa Goodies representative contacts Kip's parents.This violates

Accepted Answer

The answer of Kip opens an account at Lotsa Goodies,and...

Quiz 21: Consumer Protection

Consumer Finance Corporation (CFC) extends credit to consumers.CFC applies several criteria to decide customers' "suitability" for credit.Under the Equal Credit Opportunity Act,CFC cannot base its decision on a customer's