Question 1

Kirk receives an unsolicited credit card in the mail and tosses it on his desk. Without Kirk's permission, his roommate Leif uses the card to buy a new laptop for $1,800. Kirk is

Accepted Answer

Kirk did not give permission for Leif to use the credit card, so he is not liable for any amount. Additionally, using someone else's credit card without their permission is illegal.

Question 2

The credit department of Metro-Mart calls Nikki at work about an overdue bill. Nikki's employer objects. Metro-Mart continues to call Nikki at work. This is a viola?tion of

Accepted Answer

The Fair Debt Collection Practices Act prohibits debt collectors from contacting consumers at their place of employment if they know or have reason to know the employer objects to such communications. Metro-Mart's continued calls to Nikki at work, even after her employer objected, would be a violation of this law.

Question 3

Quik Collection Agency calls Pat several times a day, and some?times in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to Quik for collection. This is a violation of

Accepted Answer

The behavior of Quik Collection Agency falls under the jurisdiction of the Fair Debt Collection Practices Act, which regulates the actions of debt collectors and sets guidelines for when and how they can contact debtors. The act also prohibits debt collectors from contacting debtors at unreasonable hours, such as in the middle of the night.

Question 4

Steel Tool Company makes and sells tools. One of the tools is believed to be haz?ardous. The appropriate government agency may require Steel to

Accepted Answer

If the tool is believed to be hazardous, it is the responsibility of the government agency to ensure the safety of the general public. Therefore, the best choice would be for Steel to remove the tool from the market to prevent any potential harm to consumers. Exporting the tool and selling it only abroad may not necessarily ensure the safety of consumers in other countries, and increasing or reducing the price does not address the hazard itself.

Question 5

Creditworthy Loan Company extends credit in the ordinary course of its busi?ness. Under the Truth-in-Lending Act, Creditworthy must inform potential borrowers of

Accepted Answer

Under the Truth-in-Lending Act, Creditworthy is required to disclose its own credit terms to potential borrowers. This includes interest rates, fees, and repayment terms. It is not required to disclose credit terms offered by other lenders, comparative prices for goods, or borrowers' credit scores.

Question 6

Bodie's application to City Bank for a credit card is denied. Bodie can obtain information on her credit history in a credit agency's files under

Accepted Answer

Bodie can obtain information on her credit history in a credit agency's files under the Fair Credit Reporting Act. This act ensures that consumer reporting agencies maintain accurate and fair credit reporting, and it grants consumers the right to access their credit reports and dispute any inaccuracies.

Question 7

Bob is shopping in Carl's Hardware Store when a nail gun in use by Dan, one of Carl's employees, fires without warning and hits Bob in the leg. Carl checks the gun and discovers that it was assembled improperly. Bob files a suit against Eagle Tools, Inc., the manufacturer of the gun, for product liability, on the ground of strict liability. What are the elements for an action based on strict liability? In whose favor is the court likely to rule and why?

Accepted Answer

The answer of Bob is shopping in Carl's Hardware Store...

Question 8

Milo buys an all-terrain-vehicle (ATV) from No-Limit Toys, Inc., on credit but makes no payments on the account. Odell, the owner of No-Limit Toys, calls Milo at home on a Monday morning at three
a.m. Odell represents himself as PayNow Collection Agency and demands payment "or else." The next day, Odell sends Milo notice that he has thirty days in which to request verification of the debt and that its payment will be suspended during that time, but that if he does not pay the full amount due within five business days, Odell will arrange for the "destruction of Milo's good credit rating." Which laws has Odell violated, if any, and in what ways?

Accepted Answer

The answer of Milo buys an all-terrain-vehicle (ATV) from No-Limit...

Question 9

Dita takes out a student loan from Everloan Bank. When she fails to make the scheduled payments for six months, Everloan advises her of further ac?tion that it will take. This violates

Accepted Answer

The answer of Dita takes out a student loan from...

Question 10

Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to the Equal Credit Opportunity Act, which prohibits credit dis?crimination based on

Accepted Answer

The Equal Credit Opportunity Act prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or whether or not the individual receives public assistance. Intelligence, education, and income are not protected classes under this Act.

Question 11

Tory borrows $10,000 from USA National Bank to remodel a room in her home. This transaction is subject to

Accepted Answer

The Truth-in-Lending Act (TILA) requires lenders to disclose the terms and conditions of a loan, including the annual percentage rate (APR) and finance charges. As Tory is borrowing money from a bank, she would be subject to TILA. The Consumer Leasing Act and Consumer Product Safety Act are not applicable to this transaction.

Question 12

Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and other items, but makes no payments on the account. To collect the debt, Mako, the manager, contacts Kip's parents. This violates

Accepted Answer

The answer of Kip opens an account at a Lotsa...

Quiz 12: Warranties, Product Liability, and Consumer Law