Question 1

Common vitamins-niacin and riboflavin-do not have to be listed on nutrition labels.

Accepted Answer

A) True 
 B)False

Question 2

The primary purpose of the Truth-in-Lending Act is to disclose to consumers the reason(s) why they are denied credit when applied for in credit transactions.

Accepted Answer

A) True 
 B)False

Question 3

Private parties may initiate civil actions for false advertising claims under:

Accepted Answer

A)   the Moss-Magnuson Act
B)   the Cooper-Dewitt Act
C)   the Truth-in-Advertising Act
D)   Article 2 of the Constitution
E)   none of the other choices

Question 4

The FTC test for unfairness does not include which of the following elements, as applied to business practice?

Accepted Answer

A)   it causes substantial harm to consumers
B)   consumers cannot reasonably avoid the injury
C)   the injury is harmful in its net effects
D)   it causes substantial harm to consumers and consumers cannot reasonably avoid the injury
E)   it causes substantial harm to consumers and consumers cannot reasonably avoid the injury and the injury is harmful in its net effects

Question 5

Dietary supplements, unlike drugs, are not regulated.

Accepted Answer

A) True 
 B)False

Question 6

The Electronic Fund Transfer Act:

Accepted Answer

A)   makes financial institutions liable to the consumer for damages caused by its failure to make an electronic transfer of funds
B)   limits liability of the erring financial institution to actual damages proved
C)   limits liability of an erring financial institution to the lesser of $500 or the amount of the incorrect transfer
D)   makes financial institutions liable to the consumer for damages caused by its failure to make an electronic transfer of funds and limits liability of the erring financial institution to actual damages proved
E)   makes financial institutions liable to the consumer for damages caused by its failure to make an electronic transfer of funds and limits liability of an erring financial institution to the lesser of $500 or the amount of the incorrect transfer

Question 7

The Fair Credit Reporting Act:

Accepted Answer

A)   applies to anyone giving financial information about another person
B)   provides a statutory right for anyone to obtain a credit report about another person, so long as all parties involved are notified
C)   regulates consumer credit bureaus
D)   applies to anyone giving financial information about another person and provides a statutory right for anyone to obtain a credit report about another person, so long as all parties involved are notified
E)   applies to anyone giving financial information about another person and provides a statutory right for anyone to obtain a credit report about another person, so long as all parties involved are notified and regulates consumer credit bureaus

Question 8

Credit discrimination on the basis of race, sex, color, religion, national origin, marital status, receipt of public benefits, the good-faith exercise of the applicant's rights under any part of the CCPA, or age is prohibited by:

Accepted Answer

A)   the Equal Credit Opportunity Act
B)   the Fair and Just Credit Opportunity Act
C)   the Fair Credit Opportunity Act
D)   the Justified Credit Opportunity Act
E)   the Good-faith Credit Act

Question 9

When a consumer is rejected for credit, the Equal Credit Opportunity Act requires the creditor to give the consumer a list of at least three other creditors.

Accepted Answer

A) True 
 B)False

Question 10

According to FDA standards, food that is labeled as "low fat" must:

Accepted Answer

A)   have fewer than 2 grams of fat per serving
B)   have 3 or fewer grams of fat per serving
C)   not have been processed in more than one way
D)   not contain trans fats
E)   have fewer than 40 calories per serving

Question 11

The Food, Drug and Cosmetics Act was passed in:

Accepted Answer

A)   1906
B)   1927
C)   1938
D)   1940
E)   1950

Question 12

The Food Quality Protection Act states that food should have a "reasonable certainty of no harm."

Accepted Answer

A) True 
 B)False

Question 13

To address the issues of consumers being unable to get creditors to correct inaccurate or unauthorized charges that appeared on their bills and credit cards being sent to people who did not request them the FTC passed the:

Accepted Answer

A)   Fair Credit Billing Act
B)   Legitimate Credit Billing Act
C)   Real Credit Billing Act
D)   Fair Credit Regulation Act
E)   Consumer Credit Protection Act

Question 14

Fair credit reporting refers to the requirement that creditors:

Accepted Answer

A)   must disclose all relevant terms in credit transactions
B)   must not use sex or race to determine a person's creditworthiness
C)   must not use abusive debt collection techniques
D)   credit reporting agencies must provide accurate information in consumer reports
E)   none of the other specific choices are correct

Question 15

The Electronic Fund Transfer Act is implemented by:

Accepted Answer

A)   Regulation Z
B)   Regulation B
C)   Regulation E
D)   Regulation X
E)   Regulation F

Question 16

The Food and Drug Administration was created in:

Accepted Answer

A)   1906
B)   1927
C)   1938
D)   1958
E)   1967

Question 17

Under the Fair Debt Collection Practices Act, which of the following information must be provided to the debtor in writing by a debt collector within 5 days of the initial contact:

Accepted Answer

A)   the amount of the debt
B)   a statement that unless the consumer disputes the validity of the debt within 30 days, it will be assumed valid
C)   the name of the creditor to whom the debt is owed
D)   the amount of the debt or a statement that unless the consumer disputes the validity of the debt within 30 days, it will be assumed valid
E)   the amount of the debt or a statement that unless the consumer disputes the validity of the debt within 30 days, it will be assumed valid or the name of the creditor to whom the debt is owed

Question 18

The FTC's advertising substantiation program requires media ads to be registered with the FTC for review before being used to prevent deception.

Accepted Answer

A) True 
 B)False

Question 19

Fact Pattern 19-2
Jayme's Best produced a new line of pasta sauce (Herbal Health) , intending for it to have extra nutritional benefits. Using the freshest ingredients, Jayme's added special herbs to the tomato paste and spices, as the herbs are believed by some Tibetan monks to have the power to prevent cancer. Jayme's marketed the sauce in grocery stores and health food stores. Jayme's advertisements said that Herbal Health may help prevent cancer and taste a lot better than the competition. Based on these facts, answer the following questions.
-Refer to Fact Pattern 19-2. If Jayme's ads contend that it is a healthy product and the competitor products are not healthy, and indeed could make you sick, the competitors may:

Accepted Answer

A)   file a complaint with the FDA requesting that the approval for Jayme's product be suspended.
B)   appeal to the Department of Justice for a grand jury investigation of Jayme's.
C)   determine if a Trade Regulation Rule has been violated that would required the FTC to file suit against Jayme's to cease sales.
D)   sue Jayme's for double damages for the value of profits lost due to Jayme's campaign.
E)   none of the other choices; action must be taken directly by the FTC or FDA against Jayme's.

Question 20

Which of the following is NOT an example of deceptive advertising targeted by the FTC:

Accepted Answer

A)   describing pastries made in America as Danish pastries
B)   claiming that "Hooked on Phonics" can teach people with learning disabilities to read
C)   claiming that Frosted Mini-Wheats improve children's attentiveness
D)   claiming that Rice Krispies increase immunity to disease
E)   all of the other specific choices are correct

Exam 19: Consumer Protection

Dietary supplements, unlike drugs, are not regulated.

Correct Answer
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Which of the following is NOT an example of deceptive advertising targeted by the FTC:

Correct Answer
verified

The Fair Credit Reporting Act:

Correct Answer
verified

When a consumer is rejected for credit, the Equal Credit Opportunity Act requires the creditor to give the consumer a list of at least three other creditors.

Correct Answer
verified

Credit discrimination on the basis of race, sex, color, religion, national origin, marital status, receipt of public benefits, the good-faith exercise of the applicant's rights under any part of the CCPA, or age is prohibited by:

Correct Answer
verified

Correct Answer
verified

Common vitamins-niacin and riboflavin-do not have to be listed on nutrition labels.

Correct Answer
verified

Fair credit reporting refers to the requirement that creditors:

Correct Answer
verified

The FTC test for unfairness does not include which of the following elements, as applied to business practice?

Correct Answer
verified

Private parties may initiate civil actions for false advertising claims under:

Correct Answer
verified

The Food and Drug Administration was created in:

Correct Answer
verified

According to FDA standards, food that is labeled as "low fat" must:

Correct Answer
verified

The primary purpose of the Truth-in-Lending Act is to disclose to consumers the reason(s) why they are denied credit when applied for in credit transactions.

Correct Answer
verified

The Electronic Fund Transfer Act is implemented by:

Correct Answer
verified

The FTC's advertising substantiation program requires media ads to be registered with the FTC for review before being used to prevent deception.

Correct Answer
verified

The Food, Drug and Cosmetics Act was passed in:

Correct Answer
verified

The Food Quality Protection Act states that food should have a "reasonable certainty of no harm."

Correct Answer
verified

To address the issues of consumers being unable to get creditors to correct inaccurate or unauthorized charges that appeared on their bills and credit cards being sent to people who did not request them the FTC passed the:

Correct Answer
verified

Under the Fair Debt Collection Practices Act, which of the following information must be provided to the debtor in writing by a debt collector within 5 days of the initial contact:

Correct Answer
verified

The Electronic Fund Transfer Act:

Correct Answer
verified

Exam 19: Consumer Protection

Dietary supplements, unlike drugs, are not regulated.

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of deceptive advertising targeted by the FTC:

Correct AnswerverifiedShow Answer

The Fair Credit Reporting Act:

Correct AnswerverifiedShow Answer

When a consumer is rejected for credit, the Equal Credit Opportunity Act requires the creditor to give the consumer a list of at least three other creditors.

Correct AnswerverifiedShow Answer

Credit discrimination on the basis of race, sex, color, religion, national origin, marital status, receipt of public benefits, the good-faith exercise of the applicant's rights under any part of the CCPA, or age is prohibited by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Common vitamins-niacin and riboflavin-do not have to be listed on nutrition labels.

Correct AnswerverifiedShow Answer

Fair credit reporting refers to the requirement that creditors:

Correct AnswerverifiedShow Answer

The FTC test for unfairness does not include which of the following elements, as applied to business practice?

Correct AnswerverifiedShow Answer

Private parties may initiate civil actions for false advertising claims under:

Correct AnswerverifiedShow Answer

The Food and Drug Administration was created in:

Correct AnswerverifiedShow Answer

According to FDA standards, food that is labeled as "low fat" must:

Correct AnswerverifiedShow Answer

The primary purpose of the Truth-in-Lending Act is to disclose to consumers the reason(s) why they are denied credit when applied for in credit transactions.

Correct AnswerverifiedShow Answer

The Electronic Fund Transfer Act is implemented by:

Correct AnswerverifiedShow Answer

The FTC's advertising substantiation program requires media ads to be registered with the FTC for review before being used to prevent deception.

Correct AnswerverifiedShow Answer

The Food, Drug and Cosmetics Act was passed in:

Correct AnswerverifiedShow Answer

The Food Quality Protection Act states that food should have a "reasonable certainty of no harm."

Correct AnswerverifiedShow Answer

To address the issues of consumers being unable to get creditors to correct inaccurate or unauthorized charges that appeared on their bills and credit cards being sent to people who did not request them the FTC passed the:

Correct AnswerverifiedShow Answer

Under the Fair Debt Collection Practices Act, which of the following information must be provided to the debtor in writing by a debt collector within 5 days of the initial contact:

Correct AnswerverifiedShow Answer

The Electronic Fund Transfer Act:

Correct AnswerverifiedShow Answer

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