Question 1

The Fair Credit Reporting Act has to do with:

Accepted Answer

The Fair Credit Reporting Act (FCRA) regulates how credit reporting agencies collect, access, use, and share consumer credit information, which includes both reports made by credit agencies and credit checks done by potential lenders.

Question 2

If a debtor defaults on a credit contract, the creditor may:

Accepted Answer

All the options are actions a creditor may take if a debtor defaults on a credit contract, including imposing a late charge, garnishing wages after a court proceeding, and declaring the entire balance due and suing on the debt.

Question 3

The Equal Credit Opportunity Act would not prohibit which of the following? First Bank refuses to extend credit to:

Accepted Answer

The Equal Credit Opportunity Act prohibits discrimination based on sex, age, and national origin, but it does not prohibit credit decisions based on income levels.

Question 4

Holly, who is married to Grant, applies for a credit card from Marlin's Department Store, but she is turned down because she is a married woman and the store's policy is to only issue cards in the name of the husband in such situations. What are her legal rights in this situation?

Accepted Answer

The answer of Holly, who is married to Grant, applies...

Question 5

Under the Fair Credit Billing Act, if a consumer reports an error in the amount on his charge account bill, until the creditor responds, it cannot:

Accepted Answer

Under the Fair Credit Billing Act, creditors are prohibited from taking any action to collect the disputed amount, restricting the use of the account, or reporting the disputed amount as delinquent until the issue is resolved.

Question 6

The Federal Consumer Credit Protection Act:

Accepted Answer

The answer of The Federal Consumer Credit Protection Act:
...

Question 7

Congress outlawed the practice of redlining through what legislation?

Accepted Answer

The Home Mortgage Disclosure Act (HMDA) was enacted in 1975 to combat redlining by requiring financial institutions to provide mortgage data to the public.

Question 8

Sue has a Bloomingdale's credit card. On Monday she charged a $47.90 sweater and then lost the card. Myra found it Monday and charged a $100 scarf and $400 purse. Sue missed her card at 8 a.m. Tuesday and called the store. Myra then charged a coat for $4,000. Sue's bill was $4,547.90. Sue owes:

Accepted Answer

The answer of Sue has a Bloomingdale's credit card. On...

Question 9

a. What was the common law rule with respect to consumer transactions? How has this rule been changed by recent statutory enactments? 
b. Why do you think there were so many consumer protection statutes passed in the last fifty years?

Accepted Answer

The answer of a. What was the common law rule...

Question 10

In order for a full warranty to be given for a consumer product, the manufacturer must provide that:

Accepted Answer

A full warranty requires that the product be repaired for free if it fails to meet quality standards.

Question 11

The Fair Debt Collection Practices Act requires a debt collector to provide the consumer with a written notice. What information must be contained in this notice?

Accepted Answer

A statement telling the consumer that he can request verification of the alleged debt.

Question 12

The Credit Card Fraud Act prohibits which of the following practices?

Accepted Answer

The Credit Card Fraud Act prohibits all the listed practices, including possessing unauthorized cards, counterfeiting or altering credit cards, using account numbers alone, and using cards obtained from a third party with his consent when the third party conspires to report the cards as stolen.

Question 13

What remedies are available for the Federal Trade Commission?

Accepted Answer

The Federal Trade Commission (FTC) can require corrective advertising and issue multiple product orders as remedies for deceptive practices.

Question 14

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission can:

Accepted Answer

The FTC can require the seller to make corrective advertising to rectify the misleading information.

Question 15

A collection agency is prohibited from:

Accepted Answer

Collection agencies are prohibited from calling debtors at inconvenient times, such as in the middle of the night, under the Fair Debt Collection Practices Act (FDCPA).

Question 16

Roscoe Braun, who lives in Cleveland, receives a mailing from Florida from the SwampLand and Reclamation Project. It states that the Brauns can purchase one-acre sites as part of a newly planned development located in Leon County, Florida. The Brauns contact the company and are given a purchase agreement but no additional information. They sign the purchase agreement and send it back. Then, a week later they decide they would prefer to winter in either New Zealand or Australia. Can the Brauns get out of the contract?

Accepted Answer

The answer of Roscoe Braun, who lives in Cleveland, receives...

Question 17

The FTC remedy of "affirmative disclosure" would require:

Accepted Answer

Affirmative disclosure requires a company to include specific information in its advertisements to prevent deception, not necessarily admitting past falsehoods or desisting from all deception.

Question 18

Which of the following best expresses the policy behind the Truth-in-Lending Act?

Accepted Answer

The Truth-in-Lending Act is designed to ensure that consumers are provided with clear and accurate information about the costs and terms of credit, enabling them to make informed decisions and compare different credit offers effectively.

Question 19

Homemade Soup Co. has advertised their soup in certain magazines using photographs showing bowls of their soup with pebbles at the bottom of the bowl. The pebbles were used to displace the soup in the bowl, forcing the vegetables and meat to the surface. This photographer's trick made the soup appear heartier than it was. An FTC staffer is thumbing through the latest edition of her favorite magazine. She notices the Homemade Soup Co. ad and goes to her kitchen, opens up a bowl of Homemade's soup and decides that her bowl of soup looks nothing like the one in the ad. What are the steps the FTC would take to proceed against Homemade Soup Co.?

Accepted Answer

The answer of Homemade Soup Co. has advertised their soup...

Question 20

Discuss the role of the state attorneys general in consumer protection.

Accepted Answer

The answer of Discuss the role of the state attorneys...

Quiz 44: Consumer Protection