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Exam 25: Consumer Law

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Question 21

True/False

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A consent order is a Federal Trade Commission order requiring that a company stop its illegal behavior.

A) True
B) False

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Question 22

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________ is the use of generalities and clear exaggerations.

A) Constructive fraud
B) Puffing
C) Bait-and-switch advertising
D) Deceptive advertising
E) Fraud in the factum

F) All of the above
G) C) and D)

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Question 23

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The Federal Trade Commission's Cooling-Off Rule gives consumers up to twenty-four hours to cancel purchases they make from salespeople who come to their homes.

The Federal Trade Commission considers ________ abusive action by telemarketers.

Describe the rights of appeal a company has if issued a cease-and-desist order by the Federal Trade Commission.

The ________ conducts investigations into the safety of motor vehicles.

________ is the practice of advertising with claims that mislead or could mislead a reasonable consumer.

________ is the requirement that advertisers have a reasonable basis for claims made in their advertisements.

________ is a requirement by the Federal Trade Commission that a company run advertisements in which the company explicitly states that formerly advertised claims were untrue.

When sellers advertise a low price for an item generally unavailable to the consumer and then push the consumer to buy a more expensive item,they are engaging in "bait-and-switch" advertising.

According to the Federal Trade Commission,a company should not refer to its product as "Made in the USA" unless:

Used-car sales laws are uniform in every state.

Miracle Pill.Katie advertised that she had developed a pill for women that would result in weight loss,wrinkle loss,and improved vitality; and for men would result in all those things,plus hair growth.Her television advertisement showed miracle results allegedly obtained by consumers.Katie 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 Katie had failed to have a reasonable basis for the claims she made in advertisements.Katie claimed that she was merely involved in the use of generalities and clear exaggerations.The Federal Trade Commission disagreed and issued a formal administrative complaint against her.After a hearing,the Federal Trade Commission issued an order requiring that Katie stop advertising and selling the pills.After losing all appeals,Katie continued selling the pills until she was fined by the Federal Trade Commission.She has since left the country and cannot be located.Which of the following is the term for the order issued by the Federal Trade Commission requiring Katie to stop advertising and selling the pills?

Which of the following is/are federal law(s) regulating the credit industry?

Sam,who is elderly,is very annoyed because he continues to receive magazines and books in the mail from a publisher.He had not requested the publications and has no idea why they started coming.The letters that come with the publications instruct him to return any magazines or books that he does not want.Understandably,postage is becoming expensive for Sam.What law protects him and what option does he have,if any?

Miracle Pill.Katie advertised that she had developed a pill for women that would result in weight loss,wrinkle loss,and improved vitality; and for men would result in all those things,plus hair growth.Her television advertisement showed miracle results allegedly obtained by consumers.Katie 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 Katie had failed to have a reasonable basis for the claims she made in advertisements.Katie claimed that she was merely involved in the use of generalities and clear exaggerations.The Federal Trade Commission disagreed and issued a formal administrative complaint against her.After a hearing,the Federal Trade Commission issued an order requiring that Katie stop advertising and selling the pills.After losing all appeals,Katie continued selling the pills until she was fined by the Federal Trade Commission.She has since left the country and cannot be located.Which of the following are generalities and clear exaggerations allowed by the Federal Trade Commission?

The Equal Credit Opportunity Act allows creditors to deny credit on the basis of whether the applicant receives public assistance benefits.

Regarding door-to-door sales,which of the following is required by the Federal Trade Commission's Cooling-Off Rule?

The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals on the basis of ________.

If a credit bureau issues a consumer credit report for a reason not specified by the Fair Credit Reporting Act,the credit bureau may be subject to a "cease-and desist" order; however,it may not be held liable for damages.