Question 1

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances-stove, refrigerator, dishwasher, microwave, and toaster oven-for $3,999. This transaction is subject to​

Accepted Answer

The Truth-in-Lending Act applies to installment contracts and requires clear disclosure of key terms and costs of the credit being offered.

Question 2

Wild Things, Inc. (WTI), in its ads, makes claims about its products that are obvious exaggerations and claims that are false but appear to be true. WTI may be subject to sanctions for​

Accepted Answer

The answer of Wild Things, Inc. (WTI), in its ads,...

Question 3

Dina takes out a student loan from Equity Bank. When she fails to make the scheduled payments for six months, Equity advises her of further action that it will take. This is likely a violation of

Accepted Answer

Equity Bank is the original creditor, and the Fair Debt Collection Practices Act (FDCPA) applies to third-party debt collectors, not original creditors. Therefore, Equity Bank's actions do not violate any federal law in this context.

Question 4

Spicy Salsa, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Tangy Taco Sauce Company, Spicy Salsa's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to​

Accepted Answer

The FTC typically sends a formal complaint to the company responsible for the deceptive ad as the next step after concluding an investigation.

Question 5

QT Collection Agency calls Pat several times a day, and sometimes in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to QT for collection. This is a violation of​

Accepted Answer

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from calling at unreasonable times, such as before 8 a.m. or after 9 p.m., and from making repeated calls intended to annoy or harass.

Question 6

Teri borrows $10,000 from USA National Bank to remodel a room in her home. If USA National Bank lends funds in the ordinary course of its business, this transaction is subject to

Accepted Answer

The Truth-in-Lending Act applies to loans and credit transactions, requiring lenders to disclose terms and costs to borrowers.

Question 7

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 8

Herman's Hammer Company and Melissa's Mallets, Inc. both make hammers. Both companies only use steel produced in the United States to make their hammers. Herman's Hammer Company displays an ad in the local hardware store that says, "Buy from Herman's - we only use American steel, while competitors like Melissa's Mallets use inferior foreign steel!" The statement in the ad is​

Accepted Answer

The statement in the ad is a false claim about a competitor's product because both companies use American steel, so claiming that Melissa's Mallets uses inferior foreign steel is untrue.

Question 9

To generate sales, Goldline Investments, Inc., uses phone solicitation. Under federal law, in soliciting business, Goldline's telemarketers must disclose​

Accepted Answer

Under federal law, telemarketers must disclose all material facts related to a sale to ensure that consumers are fully informed before making a purchase decision.

Question 10

Steel Tool Company makes and sells tools. One of the tools is believed to be hazardous. Steel may be required to​

Accepted Answer

Steel Tool Company may be required to remove the hazardous tool from the market to ensure consumer safety and comply with legal and regulatory standards.

Question 11

Rely Battery Corporation makes batteries for motor vehicles. The Federal Trade Commission (FTC) learns that Chuck's Automotive Stores, a retail company that sells Rely's batteries, engages in deceptive advertising practices. What actions can the FTC take against Chuck's?​

Accepted Answer

The answer of Rely Battery Corporation makes batteries for motor...

Question 12

Sound bites Corporation makes and markets cellphones. Sound bites's ad states that on its phones voices and text come through as "clear as the sky on a cloudless day." The Federal Trade Commission would consider this claim

Accepted Answer

The claim "clear as the sky on a cloudless day" is an example of puffery, which is a subjective statement that is not meant to be taken literally and is generally not considered deceptive.

Quiz 13: Consumer Law

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances-stove, refrigerator, dishwasher, microwave, and toaster oven-for $3,999. This transaction is subject to

Wild Things, Inc. (WTI) , in its ads, makes claims about its products that are obvious exaggerations and claims that are false but appear to be true. WTI may be subject to sanctions for

Dina takes out a student loan from Equity Bank. When she fails to make the scheduled payments for six months, Equity advises her of further action that it will take. This is likely a violation of

Spicy Salsa, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Tangy Taco Sauce Company, Spicy Salsa's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

QT Collection Agency calls Pat several times a day, and sometimes in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to QT for collection. This is a violation of

Teri borrows $10,000 from USA National Bank to remodel a room in her home. If USA National Bank lends funds in the ordinary course of its business, this transaction is subject to

To generate sales, Goldline Investments, Inc., uses phone solicitation. Under federal law, in soliciting business, Goldline's telemarketers must disclose

Steel Tool Company makes and sells tools. One of the tools is believed to be hazardous. Steel may be required to

Rely Battery Corporation makes batteries for motor vehicles. The Federal Trade Commission (FTC) learns that Chuck's Automotive Stores, a retail company that sells Rely's batteries, engages in deceptive advertising practices. What actions can the FTC take against Chuck's?

Sound bites Corporation makes and markets cellphones. Sound bites's ad states that on its phones voices and text come through as "clear as the sky on a cloudless day." The Federal Trade Commission would consider this claim

Quiz 13: Consumer Law

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances-stove, refrigerator, dishwasher, microwave, and toaster oven-for $3,999. This transaction is subject to​

Wild Things, Inc. (WTI) , in its ads, makes claims about its products that are obvious exaggerations and claims that are false but appear to be true. WTI may be subject to sanctions for​

Dina takes out a student loan from Equity Bank. When she fails to make the scheduled payments for six months, Equity advises her of further action that it will take. This is likely a violation of

Spicy Salsa, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Tangy Taco Sauce Company, Spicy Salsa's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to​

QT Collection Agency calls Pat several times a day, and sometimes in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to QT for collection. This is a violation of​

Teri borrows $10,000 from USA National Bank to remodel a room in her home. If USA National Bank lends funds in the ordinary course of its business, this transaction is subject to

To generate sales, Goldline Investments, Inc., uses phone solicitation. Under federal law, in soliciting business, Goldline's telemarketers must disclose​

Steel Tool Company makes and sells tools. One of the tools is believed to be hazardous. Steel may be required to​

Rely Battery Corporation makes batteries for motor vehicles. The Federal Trade Commission (FTC) learns that Chuck's Automotive Stores, a retail company that sells Rely's batteries, engages in deceptive advertising practices. What actions can the FTC take against Chuck's?​

Sound bites Corporation makes and markets cellphones. Sound bites's ad states that on its phones voices and text come through as "clear as the sky on a cloudless day." The Federal Trade Commission would consider this claim

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances-stove, refrigerator, dishwasher, microwave, and toaster oven-for $3,999. This transaction is subject to

Wild Things, Inc. (WTI) , in its ads, makes claims about its products that are obvious exaggerations and claims that are false but appear to be true. WTI may be subject to sanctions for

Spicy Salsa, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Tangy Taco Sauce Company, Spicy Salsa's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

QT Collection Agency calls Pat several times a day, and sometimes in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to QT for collection. This is a violation of

To generate sales, Goldline Investments, Inc., uses phone solicitation. Under federal law, in soliciting business, Goldline's telemarketers must disclose

Steel Tool Company makes and sells tools. One of the tools is believed to be hazardous. Steel may be required to

Rely Battery Corporation makes batteries for motor vehicles. The Federal Trade Commission (FTC) learns that Chuck's Automotive Stores, a retail company that sells Rely's batteries, engages in deceptive advertising practices. What actions can the FTC take against Chuck's?