Question 1

The United States Postal Service plays an important role in consumer protection.

Accepted Answer

The United States Postal Service provides various services related to consumer protection, such as mail fraud investigations, identity theft assistance, and delivery of important documents like passports and visas.

Question 2

The Credit Card Fraud Act contains criminal penalties for violations of its provisions.

Accepted Answer

The Credit Card Fraud Act includes criminal penalties for offenses such as counterfeiting credit cards, using fraudulent credit card information, and possessing stolen credit cards.

Question 3

A misrepresentation or material omission that is likely to mislead a consumer to the consumer's detriment is grounds for a claim of deception under FTC rules.

Accepted Answer

According to FTC rules, a misrepresentation or material omission that is likely to mislead a consumer to the consumer's detriment is considered deceptive and can be grounds for legal action.

Question 4

The Truth-in-Lending Act would not require disclosure of the amount that would be due if the borrower had paid cash instead.

Accepted Answer

The answer of The Truth-in-Lending Act would not require disclosure...

Question 5

Deception may occur either through false representation or material omission.

Accepted Answer

Deception can occur through false representation, which involves providing false or misleading information, as well as through material omission, which involves withholding important information.

Question 6

The Gramm-Leach-Bliley Financial Modernization Act is administered and enforced solely through two federal agencies: the SEC and FTC.

Accepted Answer

The Gramm-Leach-Bliley Financial Modernization Act is enforced by several federal agencies, not just the SEC and FTC, but also by other agencies such as the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC), depending on the institution's primary federal regulator.

Question 7

The Federal Trade Commission was created in 1968 in response to the consumer movement of the 1960s.

Accepted Answer

The Federal Trade Commission (FTC) was actually created in 1914, primarily to prevent unfair methods of competition in commerce as part of the battle against monopoly and antitrust issues.

Question 8

The Truth-in-Lending Act establishes maximum amounts of interest that can be charged for credit cards.

Accepted Answer

The Truth-in-Lending Act requires credit card issuers to disclose the terms and conditions of their credit products, but it does not establish maximum interest rates. Interest rates are typically determined by the credit card issuer's lending policies and market conditions.

Question 9

The Magnuson-Moss Act applies to all sales of goods covered by the Uniform Commercial Code.

Accepted Answer

The Magnuson-Moss Warranty Act specifically applies to consumer products and does not cover all sales of goods under the Uniform Commercial Code (UCC), which is broader and applies to a wide range of commercial transactions beyond consumer products.

Question 10

If a manufacturer of a consumer product tells a buyer that he is selling it with no warranties,there is a violation of the Magnuson-Moss Act.

Accepted Answer

The Magnuson-Moss Warranty Act allows for the sale of consumer products without warranties, provided that the seller clearly and conspicuously discloses that the product is sold "as is" or "with all faults."

Question 11

The FTC has the power to seek in a federal district court a preliminary injunction,pending completion of administrative proceedings,whenever the agency has reason to believe that a person has been violating FTC rules.

Accepted Answer

This statement is true according to Section 5(b) of the Federal Trade Commission Act.

Question 12

A warranty creates a duty on the seller's part that the goods and services she sells will conform to certain qualities,characteristics,or conditions.

Accepted Answer

A warranty is a promise by the seller that the goods or services will meet certain standards or requirements. This creates a duty on the seller's part to ensure that the product or service fulfills the promised qualities or conditions, and if it does not, the seller may be liable for breach of warranty.

Question 13

When first established,the Consumer Product Safety Commission promulgated a number of mandatory safety standards.

Accepted Answer

The Consumer Product Safety Commission was established to promote the safety of consumer products in the United States and initially promulgated a number of mandatory safety standards.

Question 14

A collection agency may not personally contact the debtor if the debtor has engaged a lawyer to represent him.

Accepted Answer

According to the Fair Debt Collection Practices Act (FDCPA), if a debtor has hired a lawyer to represent them, the collection agency must communicate only with the debtor's lawyer and not the debtor directly.

Question 15

The NHTSA has the authority to set motor vehicle safety standards that promote crash prevention.

Accepted Answer

The National Highway Traffic Safety Administration (NHTSA) has been granted the authority to set motor vehicle safety standards that promote crash prevention, crashworthiness, and occupant protection in the event of a crash.

Question 16

The Consumer Financial Protection Bureau is an independent executive agency housed within the Federal Reserve and was established to regulate consumer financial products or services solely under the Consumer Financial Protection Act of 2010.

Accepted Answer

The Consumer Financial Protection Bureau is an independent executive agency that is not housed within the Federal Reserve. However, it was established to regulate consumer financial products or services solely under the Consumer Financial Protection Act of 2010.

Question 17

On Monday,Bill agreed to buy vinyl siding for his home from Al,a door-to-door salesman.On Wednesday,he can rescind the contract with no liability for breach of contract.

Accepted Answer

According to the Federal Trade Commission's Three-Day Cooling Off Rule, consumers have the right to cancel a contract made in their home within three business days of signing it. Therefore, Bill can rescind the contract with no liability for breach of contract on Wednesday.

Question 18

The Federal Trade Commission has overall enforcement authority for the Equal Credit Opportunity Act.

Accepted Answer

The Federal Trade Commission (FTC) is responsible for enforcing the Equal Credit Opportunity Act (ECOA) for all creditors except for certain types of financial institutions (such as banks and some thrifts) that are supervised by other federal agencies. However, the FTC still has oversight and enforcement authority over certain aspects of the ECOA for these financial institutions.

Question 19

Ad substantiation does not require advertisers to have a reasonable basis for their claims at the time the claims were made.

Accepted Answer

Ad substantiation requires advertisers to have a reasonable basis for their claims at the time the claims were made. This means that advertisers must be able to support their claims with evidence and cannot make false or misleading statements.

Question 20

An employer must notify a job applicant or current employee that a credit report may be used and must obtain the applicant's consent prior to requesting an individual's credit report from a credit bureau.

Accepted Answer

This is true according to the Fair Credit Reporting Act (FCRA).

Quiz 44: Consumer Protection