1. Ken is a customer at Orange Grove Bank and frequently banks online. One day he receives an email with his bank's logo on the top. The email states: "You have been preapproved for a premium credit, with an introductory rate of zero percent APR." The email then asks Ken to click on a link provided in the email to activate his card. Ken clicks on the link and is directed to a website where he is asked to provide personal financial information and his Social Security number.

What rule or law applies to this situation? Are there any violations?

2. Howard receives a direct mail solicitation from Easy Times Credit. The solicitation reads: "Poor credit? No credit? No problem! You qualify for a major credit card! Call 900-555-1111 and get your credit card today!"

What law or rule applies to this situation? Is it legit? Explain.

3. John is a loan sales officer for Adobe Mortgage Company. Adobe Mortgage Company has launched a big sales campaign to sell reverse mortgage loans to qualifying customers (those who own their house outright and are over 62 years old or older). Jim that he has the most success reaching the elderly when he calls them first thing in the morning, between 7 and 8 am.

What law or rule applies to this situation? Can he do this? Explain.

4. Do It Right Bank is promoting on its website a home equity line of credit with "rates as low as 3.75% APR for qualified borrowers." Following that statement is a hyperlink "Learn More" that brings up the disclosure: "To qualify for this rate, the client must have a credit score of 700 or greater and a debt-to-income ratio of 40 percent or less."

What law or rule applies to this situation? Is this in compliance?

5. Jim receives a mailer from Hopeful Finance Company stating that, based on a review of his credit record, he may be eligible to refinance his auto loan. Jim is urged to call the finance company today to see if he is qualified to receive the "lowest rate in town."

What law or rule applies to this situation? Are there any violations?

Class: BUS 200- Principles of Banking

Book: Principles of Banking, 11th edition, American Bankers Association

Principles of Banking BANK Principles of Banking BANK