Question 1

A finance company may reject an applicant for a loan on the grounds that the applicant is:

Accepted Answer

Marital status and age are not valid reasons for rejecting a loan application. Discrimination based on these factors is illegal.

Question 2

Pursuant to the CARD Act of 2009, all credit card companies must have bills in consumers' hands not less than __________ before the bill is due.

Accepted Answer

The CARD Act of 2009 mandates that credit card companies must provide bills to consumers at least 21 days before the bill is due. This ensures that consumers have enough time to review their statements, identify any errors or fraudulent charges, and pay their bills on time to avoid late fees and interest charges.

Question 3

It is lawful to refuse to extend credit to a consumer based on the consumer's:

Accepted Answer

It is lawful to refuse to extend credit to a consumer based on their credit history, but it is illegal to take into consideration factors such as race, marital status, and age when making lending decisions.

Question 4

If you allow another person to use your credit card but the person uses the card for a purpose other than the one you specified:

Accepted Answer

The answer of If you allow another person to use...

Question 5

The Fair Credit Reporting Act applies to:

Accepted Answer

The Fair Credit Reporting Act (FCRA) is designed to protect consumers by regulating the collection, dissemination, and use of consumer credit information. It does not apply to commercial or business credit.

Question 6

An unsolicited distribution of credit cards to persons who have not applied for them is:

Accepted Answer

Unsolicited distribution of credit cards is generally considered illegal under federal law, specifically the Credit Card Accountability Responsibility and Disclosure Act of 2009, which prohibits the issuance of credit cards without the consumer's request or application.

Question 7

Anyone promoting the sale of a real estate development that is divided into fifty (50) or more parcels of less than five (5) acres each must file a(n) __________ statement with the secretary of Housing and Urban Development.

Accepted Answer

A development statement must be filed with the secretary of Housing and Urban Development if a real estate development is divided into fifty or more parcels of less than five acres each. The other options (A, C, and D) are not relevant in this context.

Question 8

Peter applied for a loan at three banks. Peter's application was denied at the first two banks but finally was approved by the third institution. Peter believes that the first two banks denied his application because of his minority status. No explanation ever was provided by the banks denying Peter's request for funds. After obtaining the loan, Peter soon found himself unable to make the prescribed payments. Peter went into default, causing the bank to turn his case over to a collection agency. The collection agency called him "night and day" and were very abusive in their collection practices. Peter became quite distraught and unable to function at his job. As a result, Peter was soon fired. Peter asks for your advice regarding his legal rights. What is your response?

Accepted Answer

The answer of Peter applied for a loan at three...

Question 9

The owner of a lost credit card is:

Accepted Answer

According to the Fair Credit Billing Act, the cardholder is not liable for more than $50 for unauthorized use of their lost credit card as long as they report the loss to the issuer. If the card is reported as lost or stolen before any unauthorized transactions occur, the cardholder is not liable for any unauthorized use.

Question 10

Sue Thompson received a home "cold-canvas" sales call from a representative of the Enlightened Encyclopedia Company. The salesperson, after a rather aggressive presentation, convinced Sue to order a $1,200 Deluxe Encyclopedia set for her two children. Sue was impressed with the quality of the books, but shortly after signing the contract, she realized that she could not really afford to make the required monthly payments. What rights, if any, does Sue have in this situation?

Accepted Answer

The answer of Sue Thompson received a home "cold-canvas" sales...

Question 11

Samuel signed a contract to purchase furniture on credit. The contract clearly set forth in bold print all charges included in the cost of the credit, including the interest rate and annual percentage rate. The seller informed Samuel that the seller regularly sold these contracts to a finance company that paid it immediate cash and then collected from the debtors. The seller further advised that the finance company did not want "the headache" of determining the validity of consumer complaints and that therefore the contract provided that the consumer waived all defenses concerning the furniture against the finance company. The contract expressly provided that the seller would remain responsible for any non-conformities in the furniture or breaches of contract on its part. The furniture was defective, but the finance company is demanding that Samuel make the payments to it required by the contract and resolve its disputes with the seller of the furniture. Samuel consults you regarding his rights. What is your response?

Accepted Answer

The answer of Samuel signed a contract to purchase furniture...

Question 12

The __________ lending market makes loans to consumers who have bankruptcies, no credit history, low-to-moderate incomes, or a poor credit history.

Accepted Answer

The term "subprime" refers to lending to individuals who are considered to be at a higher risk of defaulting on the loan due to their poor credit history or financial situation. The other options are not relevant to the lending market.

Question 13

What is not a correct statement concerning the Fair Debt Collection Practices Act?

Accepted Answer

The Fair Debt Collection Practices Act does not apply to all persons collecting debts for others; it specifically applies to third-party debt collectors, not original creditors.

Quiz 33: Consumer Protection