1.Claire purchases a $125 suit on her credit card from a local clothing store in her hometown. When she takes it home, she realizes it is damaged. She tries to take the product back for a full refund or store credit, but the store refuses. In this situation, ____________________.

multiple choice

• Claire is protected under the Fair Credit Reporting Act
• she cannot receive a refund unless the transaction was a lease
• the credit card company can bill Claire because it is not their fault she bought damaged goods
• the credit card company cannot bill Claire for the damaged item
• the store violated TILA

2.Punjab is a 20-year-old student who emigrated here from India but now is a U.S. citizen. When he tries to get a credit card, the worker on the phone tells him that they will not give him a credit card because he was born in India and he is too young. In this situation, _________________.

multiple choice

• the credit card company did nothing that is illegal
• the credit card company is violating TILA
• the credit card company is violating the Fair Credit Reporting Act
• the credit card company is violating the Fair Debt Collection Practices Act
• the credit card company is violating the ECOA

3.The purpose of the _______________ is to require that sellers disclose the terms of the credit or loan to help consumers compare a variety of credit lines or loans.

multiple choice

• Truth in Lending Act
• Equal Credit Opportunity Act
• Fair Credit Reporting Act
• Consumer Leasing Act
• Limited Liability Corporations

4.Hilda owes a significant amount of debt to a doctor's office, and they hired a collection agency to take up those claims. The collection agency calls frequently, sometimes as late as 1 a.m. or 2 a.m. on weekdays. In this case, the collection agency ____________________.

multiple choice

• is justified in calling so frequently until the debtor pays
• is only in violation of the Fair Debt Collection Practices Act if the caller threatens Hilda
• is violating the Fair Debt Collection Practices Act
• is in violation of the Equal Credit Opportunity Act
• is in violation of the Credit Card Fraud Act

5.Jose loses his credit card at a crowded city park. He notifies his credit card company immediately. Five days later, $4,507 is charged on the card. How much of those charges is Jose liable for?

multiple choice

• $25.00.
• $50.
• 50% of the charges incurred.
• The entire amount.
• Nothing.

6.A(n) ______________ is a statement in which the company agrees to stop the disputed behavior but does not admit that it broke the law.

multiple choice

• consent order
• multiple-product order
• ad substantiation
• cease-and-desist order
• corrective advertising

7.A salesman says, "This house has the most efficient floor plan of any home in the world." This statement is a generality or exaggeration that cannot be proven. In this situation, what can we accurately say about this statement?

multiple choice

• Ad substantiation is required.
• This statement is prohibited, as it is puffing.
• This statement is allowed, as it is puffing.
• This statement is prohibited, as it is a half-truth.
• This statement is prohibited, as it is deceptive advertising.

8.When a seller advertises a low price for an item generally unavailable to the consumer and then pushes the consumer to buy a more expensive item, they are engaging in __________________.

multiple choice

• cease-and-desist order
• corrective advertising
• puffing
• multiple-product orders
• bait-and-switch advertising

9.Which of the following is not an element that must be proven to show an advertisement has a deceptive claim?

multiple choice

• The statement was said with the intention of misleading.
• The person viewing the statement was a reasonable consumer.
• The statement is likely to mislead.
• A material misrepresentation or omission occurred.
• All of these elements must be proven.

10.________ prohibits radio and television cigarette advertisements.

multiple choice

• Two of these
• Section 5 of the Federal Trade Commission Act
• The FTC
• The Public Health Cigarette Smoking Act
• The Smokeless Tobacco Act

11.Which of the following statements about consumer protection laws is true?

multiple choice

• The purpose of the Do Not Call registry is to give consumers a choice regarding telemarketing calls.
• The FTC does not prohibit bait-and-switch advertising.
• There are no federal laws that regulate product labeling.
• Advertisements can contain a material misrepresentation that is likely to mislead a reasonable consumer.
• Advertisers cannot use generalities and exaggerations in their advertisements.

12.An advertisement for a fast-food burger restaurant that states "World's Best Burgers" is an example of which of the following according to U.S. standards?

Multiple Choice

• Deceptive advertising.
• An untruth.
• Puffery.
• Ad substantiation.
• Bait-and-switch advertising.

13.Which of the following laws requires that sellers disclose the terms of the credit or loan so that consumers can better compare a variety of credit lines or loans?

Multiple Choice

• Truth in Lending Act.
• Fair Credit Reporting Act.
• Fair Debt Collection Practices Act.
• Fair Credit Billing Act.
• Federal Trade Commission Act.

14.Monica Natowicz recently bought a used car from Uncle Buck's Car Yard. After owning it for only one week, the car's engine failed, and her mechanic told her that she would have to change the engine. Monica complained to the owner of Uncle Buck's Car Yard, Buck Buckley, that she had been tricked into buying a car with a defective engine. Specifically, Monica referenced the sign Buck had placed on the 10-year old Ford Escape that stated "the most reliable old car around," and "with an engine that lasts." Uncle Buck, on the other hand, told Monica that the car engine's failing was likely a result of Monica's negligent driving, and that he would not refund any money. Consequently, Monica took Buck to court, arguing that Uncle Buck had used deceptive advertising in selling her a used car. The court agreed with Monica, concluding the two claims were material misrepresentations that would likely deceive a reasonable consumer.

But what if the facts of the case were different? Select each set of facts below that could change the outcome of the case.

Check All That Apply

• The car Buck sold to Monica did not have a buyer's guide label attached to it at the time of the transaction.
• The car Buck sold to Monica did not have a buyer's guide label attached to it at the time of the transaction.
• The court opined that the two statements Buck had used to advertise the Ford Escape were a misrepresentation of the car's quality and potentially misleading. However, the court concluded that a reasonable consumer would know not to trust, and subsequently be misled, by such statements in making a purchasing decision.
• The court opined that the two statements Buck had used to advertise the Ford Escape were a misrepresentation of the car's quality and potentially misleading. However, the court concluded that a reasonable consumer would know not to trust, and subsequently be misled, by such statements in making a purchasing decision.
• Uncle Buck included a label on the car that suggested that a buyer obtain an inspection for the Ford Escape before purchasing the car.
• Uncle Buck included a label on the car that suggested that a buyer obtain an inspection for the Ford Escape before purchasing the car.
• Instead of stating the two quotations that Monica references, Uncle Buck's sign stated only the following: "the best car to have ever existed."
• Instead of stating the two quotations that Monica references, Uncle Buck's sign stated only the following: "the best car to have ever existed."