Question 1

When a consent order issued by the Federal Trade Commission is signed,the company has agreed to a corrective advertising program.

Accepted Answer

The answer of When a consent order issued by the...

Question 2

When a company agrees with the Federal Trade Commission and signs a consent order,the company agrees to stop the ad or marketing practice and also agrees to pay civil penalties.

Accepted Answer

A consent order with the Federal Trade Commission typically requires a company to stop the disputed practices but does not necessarily involve agreeing to pay civil penalties. Civil penalties might be part of separate legal actions or settlements.

Question 3

Federal Trade Commission industry regulation rulings cannot be challenged by an appeal to the U.S.Court of Appeals.

Accepted Answer

Federal Trade Commission industry regulation rulings can be challenged by an appeal to the U.S. Court of Appeals.

Question 4

Recently the FTC investigated bloggers who were being sponsored to pitch products.The FTC ruled that the blogger must disclose any type of compensation that it received.This is an example of a:

Accepted Answer

The answer of Recently the FTC investigated bloggers who were...

Question 5

A trade regulatory ruling by the Federal Trade Commission applies to:

Accepted Answer

A trade regulatory ruling by the Federal Trade Commission typically applies to an industry and may affect wholesalers, retailers, and international companies that are a part of that industry. However, the ruling is not specific to any particular type of company or entity within that industry.

Question 6

Complaints that are made to the Federal Trade Commission are made public and registered on the FTC's website.

Accepted Answer

Complaints made to the Federal Trade Commission are not made public or registered on the FTC's website. The FTC uses the information from complaints to detect patterns of fraud and abuse, which can lead to investigations and prosecutions, but individual complaints are kept confidential.

Question 7

The large number of cases of false and misleading advertising has lead the FTC to order corrective advertising a substantial number of times.

Accepted Answer

The answer of The large number of cases of false...

Question 8

If a consent agreement cannot be reached after an investigation by the Federal Trade Commission,the case would next go to the full commission.

Accepted Answer

The answer of If a consent agreement cannot be reached...

Question 9

When the Federal Trade Commission orders a firm to prepare corrective advertisements,the goal is to bring people back to the neutral state that existed before the false and deceptive advertising was used by the company.

Accepted Answer

The goal of corrective advertisements ordered by the Federal Trade Commission is to bring consumers back to the neutral state they were in before they were exposed to the deceptive advertising.

Question 10

The Federal Trade Commission has the power to order firms to prepare and disseminate corrective advertising.

Accepted Answer

The Federal Trade Commission has the authority to order companies to run corrective advertising to counteract any previous false or misleading claims made in their advertising.

Question 11

Cases before the full commission of the FTC can be appealed to the U.S.Court of Appeals and even to the U.S.Supreme Court.

Accepted Answer

Cases before the full commission of the FTC can be appealed to the U.S. Court of Appeals and even to the U.S. Supreme Court.

Question 12

When a company's management team signs a consent order issued by the FTC they agree to stop the advertisement or marketing practice and they admit they are guilty of false or deceptive advertising.

Accepted Answer

Signing a consent order with the FTC means the company agrees to stop the challenged practices but does not admit to guilt or wrongdoing. Consent orders are often used to resolve disputes without an admission of guilt to expedite the resolution process and avoid litigation.

Question 13

Anyone can file a complaint to the FTC concerning what someone deems to be a deceptive or misleading advertising or marketing practice.

Accepted Answer

Anyone can file a complaint to the FTC about deceptive or misleading advertising or marketing practices.

Question 14

The first step a firm can take to end a FTC investigation of a complaint is the signing of a consent order.

Accepted Answer

A consent order is a legally binding document that outlines the actions a company agrees to take to resolve an issue raised by the FTC. By signing a consent order, the company agrees to comply with certain requirements and may be required to pay a fine. This can be the first step towards ending an FTC investigation.

Question 15

Before issuing trade regulation rulings,the FTC normally holds a public hearing and accepts both oral and written arguments.

Accepted Answer

This statement is correct. The FTC does typically hold a public hearing and accepts both oral and written arguments before issuing trade regulation rulings.

Question 16

The NARB is supported by the Federal Trade Commission and has legal authority over cases it reviews.

Accepted Answer

The NARB (National Advertising Review Board) is a self-regulatory organization and does not have legal authority. However, it is supported by the advertising industry and the Federal Trade Commission respects its decisions.

Question 17

When the FTC issues an administrative complaint and an administrative judge rules a violation has occurred,the judge issues a cease and desist order.

Accepted Answer

When the FTC issues an administrative complaint and an administrative judge rules a violation has occurred, the judge issues a cease and desist order to stop the unlawful activity.

Question 18

When the Federal Trade Commission issues a trade regulating ruling,the ruling applies to every firm in an industry,whether the individual company is guilty or not guilty of the marketing practice in question.

Accepted Answer

The ruling applies to every firm in the industry, regardless of their individual guilt.

Question 19

The funeral industry was sanctioned by the FTC in 1984 and 1994 for practices common in the industry that the FTC believed were not fair to consumers.To correct these misleading practices,the FTC issued a:

Accepted Answer

The FTC issued a trade regulation ruling, known as the Funeral Rule, to correct misleading practices in the funeral industry and ensure fair treatment of consumers. This rule requires funeral providers to give consumers accurate, itemized price information and other disclosures about funeral goods and services.

Question 20

The FTC can use the court system to stop unfair and deceptive advertising and communication practices but must go through the normal steps of starting with a consent agreement.

Accepted Answer

The FTC can directly seek a court order to stop unfair and deceptive practices without first having to reach a consent agreement. Consent agreements are often used, but they are not a mandatory first step before the FTC can take legal action.

Quiz 14: Regulations and Ethical Concerns