Question 1

Identify the typical steps in an FTC investigation sequence from the initial complaint to a decision that is appealed to the Supreme Court.

Accepted Answer

The answer of Identify the typical steps in an FTC...

Question 2

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

Accepted Answer

The National Advertising Review Board (NARB) is not a governmental agency and does not have legal authority over cases it reviews. However, it is supported by advertising industry organizations and the Federal Trade Commission often refers cases to it for review.

Question 3

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

This is true. When the FTC issues an administrative complaint and an administrative judge rules a violation has occurred, the judge has the power to issue a cease and desist order, which requires the violator to stop engaging in the illegal activity.

Question 4

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 5

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.

Question 6

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

Accepted Answer

The FTC typically holds public hearings and accepts oral and written arguments before issuing trade regulation rulings.

Question 7

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 8

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 9

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 10

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:
A) cease and desist order.
B) consent order.
C) corrective advertising order.
D) trade regulation ruling.

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 11

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 12

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

Accepted Answer

Signing a consent order is often the first step a firm takes to end a FTC investigation of a complaint. By signing the order, the firm agrees to take corrective actions, pay any required fines or penalties, and comply with the FTC's regulations in the future.

Question 13

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

This is because the ruling is meant to set a standard for the industry and ensure that all companies are following the same rules and practices. Failure to comply with the ruling can result in penalties or fines for individual companies.

Question 14

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 15

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 advertising is to correct false and deceptive advertising and restore the status quo ante, or the state that existed before the misleading ads were used.

Question 16

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 is received. This is an example of a:
A) cease and desist order.
B) consent order.
C) corrective advertising order.
D) trade regulation ruling.

Accepted Answer

This is an example of a trade regulation ruling, where the FTC sets guidelines for industries to ensure fair practices, such as requiring bloggers to disclose sponsorships.

Question 17

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 18

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

Accepted Answer

This is true. Anyone can file a complaint to the FTC concerning what they believe to be a deceptive or misleading advertising or marketing practice. The FTC encourages consumers to file complaints to help them identify and investigate fraudulent business practices.

Question 19

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 20

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

Accepted Answer

The FTC has the authority to order firms to prepare and disseminate corrective advertising under certain circumstances, such as in cases of false or deceptive advertising.

Quiz 14: Regulations and Ethical Concerns

Identify the typical steps in an FTC investigation sequence from the initial complaint to a decision that is appealed to the Supreme Court.

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

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

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.

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.

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

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

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

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

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:

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

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

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.

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

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.

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 is received. This is an example of a:

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.

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

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.

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