Question 1

A sale of goods or services for $25 or more made to a buyer at home may be set aside without cause within five (5) business days.

Accepted Answer

False

Question 2

Despite consumer protection legislation, for most consumers pursing their rights in court is not cost beneficial.

Accepted Answer

False

Question 3

Those who are liable for violations of consumer protection situations are persons or enterprises that regularly enter into the type of transaction in which the injured consumer was involved.

Accepted Answer

This statement is true. Those who are regularly involved in transactions with consumers are expected to follow consumer protection laws, and may be held liable if they violate those laws.

Question 4

Corrective advertising required by the FTC also is called retroactive advertising.

Accepted Answer

Corrective advertising, as required by the FTC, is not called retroactive advertising. Retroactive advertising refers to advertising for a product or service that is no longer available or has been replaced by a new version. Corrective advertising, on the other hand, is advertising designed to correct false or misleading statements previously made in advertising by a company.

Question 5

Consumers must re-register every three years in order to stay on the National Do Not Call Registry.

Accepted Answer

Once a number is registered on the National Do Not Call Registry, it remains there permanently unless the consumer removes it or the number is disconnected and reassigned to someone else.

Question 6

Consumer protection laws, which commonly regulate the form of consumer contracts, provide that back-page disclaimers are void if the front page of a contract does not call attention to the presence of the terms on the back page.

Accepted Answer

Consumer protection laws do provide that back-page disclaimers are void if the front page of a contract does not call attention to the presence of the terms on the back page. This is because consumers should be made aware of all the terms and conditions before agreeing to a contract.

Question 7

Consumer protection even protects a consumer from the consumer's own negligence.

Accepted Answer

Consumer protection laws generally provide protection from fraudulent or unfair practices by businesses, but they do not typically protect consumers from their own negligence or poor judgment.

Question 8

Antitrust statutes that prohibit anticompetitive behavior give consumers the right to collect treble punitive damages for a violation.

Accepted Answer

Antitrust statutes do give consumers the right to collect treble punitive damages (three times the actual damages) for a violation.

Question 9

Consumer protection statutes do not require proof of intent, regardless of whether the merchant did not think the ad was misleading.

Accepted Answer

Consumer protection statutes are meant to protect consumers from misleading advertisements, regardless of whether the merchant intended to mislead the consumers or not. Therefore, they do not require proof of intent.

Question 10

An auto dealer who does not actually know of a roll-back can use lack of knowledge as a defense against odometer fraud, regardless of the condition of the car.

Accepted Answer

Under federal law, ignorance of an odometer rollback is not a defense for auto dealers. Dealers are expected to know, or should have known, about the true mileage of the vehicles they sell, and they have a responsibility to ensure the accuracy of the odometer readings.

Question 11

A consumer claiming that there has been a violation of a consumer protection statute has the burden of proving that the statutory definition of "consumer" has been satisfied.

Accepted Answer

In order for a consumer to have standing to bring a claim under a consumer protection statute, they must meet the statutory definition of "consumer." Therefore, the burden is on the consumer to show that they meet this definition.

Question 12

Consumer title loans, made in exchange for title to a car if the borrower defaults, are also called predatory loans and are illegal per se.

Accepted Answer

Consumer title loans are legal in many states, but they have been criticized for their high interest rates and fees. Some consumer advocates consider them to be predatory. However, they are not illegal per se.

Question 13

The types of provisions that make contracts unconscionable include clauses that award excessive damages or the application of credit payments across purchases over time so that the consumer is never able to pay off any goods.

Accepted Answer

This is true. Other types of provisions that may make a contract unconscionable include provisions that waive a consumer's right to legal remedies, provisions that allow one party to modify the terms of the contract without notice or consent from the other party, and provisions that are hidden or difficult to understand.

Question 14

Labels on packages are regulated to provide information about the contents and warnings about the dangers involved in the use of the product.

Accepted Answer

This is correct, as regulations require certain information to be included on product labels to ensure consumer safety and understanding of the product contents and proper usage.

Question 15

Individuals can seek criminal and civil penalties against those who violate consumer protection statutes.

Accepted Answer

Individuals can seek civil penalties, but criminal penalties are pursued by the state or federal government, not by individuals.

Question 16

The aim of consumer protection legislation is to protect persons of limited means and limited knowledge.

Accepted Answer

Consumer protection legislation aims to provide safeguards and remedies to consumers who may have limited means and knowledge to protect themselves from unfair or deceptive business practices.

Question 17

The FTC requires that only descriptive and non-ambiguous terms such as jumbo, giant, or full be used in product labeling.

Accepted Answer

This statement is false. The FTC does not have strict requirements for the use of descriptive terms in product labeling as long as they are not false or misleading. However, there are certain terms that are regulated by other agencies, such as the USDA for meat products.

Question 18

One of the protections for consumers against subprime loans includes credit counseling before consumers may sign for certain types of subprime loans.

Accepted Answer

Credit counseling is required before consumers can sign for certain types of subprime loans, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Question 19

The category of protected consumers for many statutes has been expanded to include partnerships, corporations and government entities.

Accepted Answer

Many statutes, such as consumer protection laws, have expanded their definition of "consumer" to include partnerships, corporations, and government entities, in addition to individuals. This is often done to provide additional protections or remedies to these entities as consumers of goods or services.

Question 20

Consumer protection law often requires those dealing with consumers to make certain mandated disclosures.

Accepted Answer

Consumer protection law does require those dealing with consumers to make certain mandated disclosures in order to protect consumers from unfair or deceptive practices. These disclosures may include information about the price, terms and conditions of a product or service, any potential risks or side effects, and any guarantees or warranties offered. Failure to make these required disclosures can result in legal action against the business or individual.

Quiz 32: Consumer Protection