Question 1

________ laws are state consumer protection laws prohibiting used-car fraud.

Accepted Answer

A)   Orange
B)   Prune
C)   Lemon
D)   Onion
E)   LimeF) None of the above
G) A) and D)

Question 2

[Miracle Pill] Julia advertised that she had developed a pill for women that would result in weight loss, wrinkle loss, and improved vitality; and that for men would result in all those things, plus hair growth. Her television advertisement showed miracle results allegedly obtained by consumers. Julia cautioned, however, that ingestion of the pill for six months was required before results would be evident. The pill was wildly popular. The Federal Trade Commission, however, investigated and determined that Julia had no reasonable basis for the claims she made in advertisements. Julia claimed that she was merely involved in the use of generalities and clear exaggerations. The Commission disagreed and issued a formal administrative complaint against her. After a hearing, an order was issued requiring that Julia stop advertising and selling the pills. After losing all appeals, Julia continued selling the pills until she was fined by the Federal Trade Commission. She has since left the country and cannot be located.
-Julia's defense that generalities and clear exaggerations are allowable by law is known as ________.

Accepted Answer

A)   Exaltation
B)   Puffing
C)   Crowing
D)   Swelling
E)   BoastingF) A) and C)
G) None of the above

Question 3

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist. Billy's Widgets disagrees and continues to run the advertisement anyway? What are the FTC's options?

Accepted Answer

A)   Have the CEO of Billy's Widgets arrested
B)   File a civil lawsuit against Billy's widgets.
C)   Seek an injunction only
D)   Fine the company only.
E)   Either seek an injunction or fine the company.F) D) and E)
G) None of the above

Question 4

Paul's Puppy toys advertises dog bones for $1. When customers arrive to buy, employees warn the buyers that the $1 bones can sometimes make dogs sick and offer the buyers $5 bones instead. The advertisement offering the $1 bones is an example of:

Accepted Answer

A)   Click-and-install
B)   Bait-and-switch
C)   Bait-and-click
D)   Deceptive-click
E)   Click-to-deceitF) A) and D)
G) C) and D)

Question 5

Which act states that a creditor must make a loan to a natural person and not an entity?

Accepted Answer

A)   The Truth-in-Lending Act
B)   Natural Loan's Act
C)   People Only Loan Act
D)   Non-Commercial Lending Act
E)   Loan Guidance ActF) A) and B)
G) B) and E)

Question 6

Which of the following can the Fair Credit Report Act not be used for?

Accepted Answer

A)   insurance eligibility
B)   to randomly know someone's income
C)   employment
D)   loans
E)   licensingF) None of the above
G) A) and E)

Question 7

The Federal Food, Drug, and Cosmetic Act protects against misbranded products.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following was the result in Paula E. Rossman v. Fleet Bank (R.I.)  National Association, the case in the text in which the plaintiff sued the defendant after she opened a credit card account based on the promise that no annual fee would be charged; but the policy was changed shortly thereafter, and she was charged an annual fee?

Accepted Answer

A)   That the defendant was liable to the plaintiff because it engaged in a bait-and-switch scheme.
B)   That the defendant was liable to the plaintiff because it violated provisions of the Truth in Lending Act.
C)   That the defendant committed no violation of the law because it was entitled to change its policies at will.
D)   That the defendant committed no violation of the law because its offer disclosed that terms and policies could be changed.
E)   That the defendant committed no violation because it was not required to disclose future fees, only current ones.F) A) and C)
G) A) and E)

Question 9

Joe comes to Patty's house to sell her a knife set. He uses an aggressive sales pitch and he tells Patty that all sales are final. Patty signs a contract to buy the set, but later regrets it and asks to rescind the contract 7 days later? Can Patty rescind her contract?

Accepted Answer

A)   No, because she waited more than the three days allowed under the Cooling Off Rule
B)   No, because she was told all sales were final
C)   Only if Joe engaged in fraud in the sale
D)   Likely yes, because Joe failed to inform her, both verbally and in writing, that the transaction may be cancelled.
E)   Yes, but only if she can prove the knives cost more than market valueF) A) and E)
G) A) and B)

Question 10

Whether an advertisement is considered deceptive is determined on a case-by-case basis.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following was the result on appeal in Gotlin v. Lederman, the case in the text involving whether the defendants misrepresented the effectiveness of a particular form of cancer treatment, Fractionated Stereotactic Radiosurgery (FSR) , in violation of New York's consumer protection law?

Accepted Answer

A)   The court ruled that plaintiff was unable to recover because there was no evidence of deceptive statements made on the part of the defendants.
B)   The court ruled that the plaintiff was unable to recover because the consumer protection law at issue did not apply to the provision of medical services.
C)   The court ruled that the plaintiff was unable to recover because of the absence of expert medical testimony establishing that the treatment was ineffective.
D)   The court ruled that as a matter of law the plaintiff was entitled to recover because evidence indicating the ineffectiveness of the treatment was presented.
E)   The court ruled that the case was wrongfully dismissed prior to trial because issues of material fact were presented regarding the plaintiff's injuries and whether the marketing of the treatment was deceptive treatment.F) All of the above
G) A) and B)

Question 12

For what amount can a person be held liable to the credit card company if a credit card company sends an unsolicited card in the mail and the card is stolen?

Accepted Answer

A)   $500
B)   $300
C)   $250
D)   $200
E)   $0F) A) and C)
G) C) and D)

Question 13

Tupalo's restaurant sent a group of unsolicited faxes to local businesses. This is considered a violation of which of the following?

Accepted Answer

A)   Telephone Fraud Act
B)   Telephone Protection of Consumers Act
C)   Phone to Phone Protection Act
D)   Fraud in Phone Act
E)   Telephone Consumer Protection Act of 1991.F) B) and C)
G) A) and E)

Question 14

The ________ gives consumers three days to cancel purchases made from a salesperson who comes to the consumers home.

Accepted Answer

A)   Rule of Three
B)   Buyer Protection Act
C)   Cooling-off Rule
D)   Product Trial Period Rule
E)   Buy Back Protection ActF) B) and E)
G) A) and B)

Question 15

A statute or administrative rule serving to protect consumer interests is a consumer law.

Accepted Answer

A) True 
 B)False

Question 16

How does NAFTA define "Made in the U.S.A."?

Accepted Answer

A)   As a product for which at least 55 percent of the labor and components are from Canada, Mexico, or the United States.
B)   As a product for which "all or virtually all" of the components and labor are of U.S. origin.
C)   As a product for which at least 50 percent of the components and labor are of U.S. origin.
D)   As a product for which at least 75 percent of the components and labor are of U.S. origin.
E)   As a product for which at least 75 percent of the components and labor are of from Canada, Mexico, or the United States.F) A) and B)
G) B) and C)

Question 17

The Federal Trade Commission meets its goals of protecting consumers by:

Accepted Answer

A)   Consumer education only
B)   Legal action only
C)   Consumer education and legal action
D)   Bringing criminal charges for deceptive advertising
E)   Informing consumers how they can take legal actionF) B) and E)
G) C) and D)

Question 18

A(n)  ________ is a statement that a company agrees to stop disputed behavior but does not admit that it actually broke the law.

Accepted Answer

A)   agreed order of acknowledgment decree
B)   cease and desist order
C)   consent order
D)   acknowledgement decree
E)   approval recommendation decreeF) B) and D)
G) All of the above

Question 19

Unless it is secured by a mortgage on real estate, a loan must be in the amount of ________ in order to come within the scope of the Truth-in-Lending Act.

Accepted Answer

A)   $50,000 or more
B)   $50,000 or less
C)   $30,000 or more
D)   $40,000 or less
E)   $25,000 or lessF) A) and B)
G) All of the above

Question 20

Babelon's Used Car makes the following claim in its ad: "We have the best sales force this side of the Mississippi." This is an example of:

Accepted Answer

A)   an FTC violation
B)   a material misrepresentation
C)   a half truth
D)   deceptive advertising
E)   puffingF) B) and E)
G) A) and E)

Exam 45: Consumer Law

A statute or administrative rule serving to protect consumer interests is a consumer law.

Correct Answer
verified

Unless it is secured by a mortgage on real estate, a loan must be in the amount of ________ in order to come within the scope of the Truth-in-Lending Act.

Correct Answer
verified

Whether an advertisement is considered deceptive is determined on a case-by-case basis.

Correct Answer
verified

Correct Answer
verified

Tupalo's restaurant sent a group of unsolicited faxes to local businesses. This is considered a violation of which of the following?

Correct Answer
verified

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist. Billy's Widgets disagrees and continues to run the advertisement anyway? What are the FTC's options?

Correct Answer
verified

A(n) ________ is a statement that a company agrees to stop disputed behavior but does not admit that it actually broke the law.

Correct Answer
verified

For what amount can a person be held liable to the credit card company if a credit card company sends an unsolicited card in the mail and the card is stolen?

Correct Answer
verified

________ laws are state consumer protection laws prohibiting used-car fraud.

Correct Answer
verified

The Federal Food, Drug, and Cosmetic Act protects against misbranded products.

Correct Answer
verified

Babelon's Used Car makes the following claim in its ad: "We have the best sales force this side of the Mississippi." This is an example of:

Correct Answer
verified

Which act states that a creditor must make a loan to a natural person and not an entity?

Correct Answer
verified

How does NAFTA define "Made in the U.S.A."?

Correct Answer
verified

The Federal Trade Commission meets its goals of protecting consumers by:

Correct Answer
verified

Which of the following was the result on appeal in Gotlin v. Lederman, the case in the text involving whether the defendants misrepresented the effectiveness of a particular form of cancer treatment, Fractionated Stereotactic Radiosurgery (FSR) , in violation of New York's consumer protection law?

Correct Answer
verified

Which of the following can the Fair Credit Report Act not be used for?

Correct Answer
verified

Paul's Puppy toys advertises dog bones for $1. When customers arrive to buy, employees warn the buyers that the $1 bones can sometimes make dogs sick and offer the buyers $5 bones instead. The advertisement offering the $1 bones is an example of:

Correct Answer
verified

The ________ gives consumers three days to cancel purchases made from a salesperson who comes to the consumers home.

Correct Answer
verified

Correct Answer
verified

Joe comes to Patty's house to sell her a knife set. He uses an aggressive sales pitch and he tells Patty that all sales are final. Patty signs a contract to buy the set, but later regrets it and asks to rescind the contract 7 days later? Can Patty rescind her contract?

Correct Answer
verified

Exam 45: Consumer Law

A statute or administrative rule serving to protect consumer interests is a consumer law.

Correct AnswerverifiedShow Answer

Unless it is secured by a mortgage on real estate, a loan must be in the amount of ________ in order to come within the scope of the Truth-in-Lending Act.

Correct AnswerverifiedShow Answer

Whether an advertisement is considered deceptive is determined on a case-by-case basis.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Tupalo's restaurant sent a group of unsolicited faxes to local businesses. This is considered a violation of which of the following?

Correct AnswerverifiedShow Answer

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist. Billy's Widgets disagrees and continues to run the advertisement anyway? What are the FTC's options?

Correct AnswerverifiedShow Answer

A(n) ________ is a statement that a company agrees to stop disputed behavior but does not admit that it actually broke the law.

Correct AnswerverifiedShow Answer

For what amount can a person be held liable to the credit card company if a credit card company sends an unsolicited card in the mail and the card is stolen?

Correct AnswerverifiedShow Answer

________ laws are state consumer protection laws prohibiting used-car fraud.

Correct AnswerverifiedShow Answer

The Federal Food, Drug, and Cosmetic Act protects against misbranded products.

Correct AnswerverifiedShow Answer

Babelon's Used Car makes the following claim in its ad: "We have the best sales force this side of the Mississippi." This is an example of:

Correct AnswerverifiedShow Answer

Which act states that a creditor must make a loan to a natural person and not an entity?

Correct AnswerverifiedShow Answer

How does NAFTA define "Made in the U.S.A."?

Correct AnswerverifiedShow Answer

The Federal Trade Commission meets its goals of protecting consumers by:

Correct AnswerverifiedShow Answer

Which of the following was the result on appeal in Gotlin v. Lederman, the case in the text involving whether the defendants misrepresented the effectiveness of a particular form of cancer treatment, Fractionated Stereotactic Radiosurgery (FSR) , in violation of New York's consumer protection law?

Correct AnswerverifiedShow Answer

Which of the following can the Fair Credit Report Act not be used for?

Correct AnswerverifiedShow Answer

Paul's Puppy toys advertises dog bones for $1. When customers arrive to buy, employees warn the buyers that the $1 bones can sometimes make dogs sick and offer the buyers $5 bones instead. The advertisement offering the $1 bones is an example of:

Correct AnswerverifiedShow Answer

The ________ gives consumers three days to cancel purchases made from a salesperson who comes to the consumers home.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Joe comes to Patty's house to sell her a knife set. He uses an aggressive sales pitch and he tells Patty that all sales are final. Patty signs a contract to buy the set, but later regrets it and asks to rescind the contract 7 days later? Can Patty rescind her contract?

Correct AnswerverifiedShow Answer

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