Question 1

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 2

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

Accepted Answer

Federal law prohibits discrimination in lending based on race, marital status, and age. However, lenders may consider credit history when deciding whether to extend credit to a consumer.

Question 3

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 subprime lending market is characterized by loans to consumers who are considered high-risk due to factors such as a poor credit history or bankruptcy.

Question 4

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

Accepted Answer

The Fair Debt Collection Practices Act only applies to third-party debt collectors who are collecting debts on behalf of others, not to original creditors who are collecting from original debtors.

Question 5

Sue Thompson received a home "cold-canvas" sales call at her home 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 6

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

According to the CARD Act of 2009, credit card companies must have bills in consumers' hands at least 21 days before the due date to allow enough time to review the bill and make timely payments.

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

This requirement is known as the Interstate Land Sales Full Disclosure Act (ILSA) and applies to developers who sell 50 or more lots in a non-exempt subdivision. The developer must file a registration statement with the Secretary of Housing and Urban Development (HUD) and provide buyers with a property report containing information about the development.

Question 8

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 9

The owner of a lost credit card is:

Accepted Answer

According to the Fair Credit Billing Act, a cardholder is not liable for more than $50 for unauthorized use of their lost or stolen credit card. However, if the cardholder reports the loss before any unauthorized charges are made, they are not responsible for any charges.

Question 10

The Fair Credit Reporting Act applies to:

Accepted Answer

The Fair Credit Reporting Act applies to consumer credit, which refers to credit that is extended to individuals for personal, family, or household purposes. It does not apply to commercial or business credit, which is provided to businesses for their operations or investments. It also does not apply to international sales contracts, which are governed by different laws and regulations.

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

A finance company may not reject an loan applicant on any of the grounds listed below, except:

Accepted Answer

Rejecting a loan applicant because they are on a fixed income could be considered a legitimate concern regarding their ability to repay the loan, unlike the other options which are discriminatory based on marital status or age.

Question 13

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

Accepted Answer

An unsolicited distribution of credit cards to persons who have not applied for them is illegal under the Truth in Lending Act. This practice is also known as "slamming" and can lead to identity theft and other fraudulent activities.

Quiz 32: Consumer Protection