Time Limit: 1:00:00 Time Left:0:46:23 James Castillo: Attempt 1 Page 1 Previous Page Next Page Page 3 of 5 Consumer Protection Law Unfairness FTC v Circadian MC Page 2 : Circadian is a payroll processing firm. To process its business customers' payrolls, Circadian collects information about its customers' employees. This information includes employees' names, addresses, social security numbers, dates of birth, and bank account information. On December 22, 2016, Circadian suffered a security breach. An unknown hacker infiltrated Circadian's system and gained access to personal and financial information belonging to approximately 27,000 employees at 1,900 companies. Some of the employees complained to the FTC, which instituted a Page 3 : lawsuit against Circadian. The legal issue is whether Circadian engaged in unfair acts or practices because third parties were able to enter its information systems and 20 12 12 access private employee information. Page 4 Question 10 (5 points) 25 26 15 What is the relationship between unfairness and deception, as those terms are used in the Federal Trade Commission Act? Page 5 They are used interchangeably. Unfairness is one element of deception. Unfairness and deception are two separate "prongs" or standards under the FTC Act. Question 11 (5 points) What legal rule will be used by the court to resolve this issue? An unfair act or practice occurs when a business knows about a weakness in its system and recklessly fails to correct it. An unfair act or practice is one that causes a competitive injury. An unfair act or practice occurs when a seller intentionally induces another to engage in a transaction through misrepresentation of material facts. An unfair act or practice is defined as one that causes or is likely to cause substantial injury to consumers, which is not reasonably avoidable by consumers themselves, and which is not outweighed by countervailing benefits to consumers or to competition. Question 12 (5 points) Assume that the FTC is successful in establishing that Circadian's practices violates its prohibition of unfair acts or practices. Which of the following are available as remedies? Choose all that apply. Partial credit is available. The employees can bring a private cause of action based on the FTC Act. Punitive Damages can be imposed. The company can be ordered to pay restitution. A cease and desist order can be issued. Previous Page Next Page Page 3 of 5