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Exam 24: Consumer Protection

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Question 31

True/False

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Half-truths-information that is true but incomplete-are not deceptive because such statements are at least half true.

A) True
B) False

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Question 32

Multiple Choice

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Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites, Jill, the salesperson, tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is

A) a cease-and-desist order.
B) bait-and-switch advertising.
C) counteradvertising.
D) puffery.

E) All of the above
F) A) and D)

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Question 33

True/False

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Under the Fair Credit Reporting Act, a consumer can request the identity of anyone who has received a credit agency's report on the consumer.

A business that cannot provide scientific evidence to support its marketing claims may be held liable for deceptive advertising.

Bait-and-switch advertising occurs if the seller fails to have reasonably adequate quantities of the advertised item available.

If an advertisement is proven to be deceptive, it may be subject to a cease-and-desist order.

Federal and state laws are aimed at protecting consumers from all of the following except

Faux Products Inc., in its ads, makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about

The Federal Trade Commission (FTC) receives numerous complaints that a Renewal Subscriptions Inc. ad is deceptive. The FTC's first step is to

The manufacture and sale of any product that poses an unreasonable risk to consumers can be banned.

Rollo has a credit card from Shopping Cards Inc. To change the terms, Shopping Cards must

An ad for Bagels Inc. attracts buyers who would otherwise have made purchases from Croissant Company. To bring a successful claim against Bagels under the federal Lanham Act for false advertising, Croissant must establish that

Auto & Life Insurance Company fails to notify its new customers when they are charged higher premium rates as a result of their credit scores. This is a willful violation of

Bee borrows funds from Credit Union to repair her home and to buy a car. She buys a laptop from Discount Store in a transaction financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to

Value Loan Company extends credit to consumers. Value Loan applies a variety of requirements to determine applicants' qualifications for credit, the amount, the interest rate, and other terms. Under the Equal Credit Opportunity Act, the lender cannot base its credit decisions on an applicant's

Pro Motor Company makes cars. Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to

The Telemarketing Sales Rule applies to any offer-domestic or foreign-made to consumers in the United States.

Lawnscape Company and Mowers Inc. make yard tools. Both companies use only steel produced in the United States. Lawnscape's ad claims, "We use only U.S. steel, while our competitor uses inferior foreign steel!" Under the advertising standards of the Federal Trade Commission Act, this statement is most likely

The Federal Commerce Commission is charged with the goal of preventing unfair and deceptive trade practices.

Because consumers may not read an entire web page, an online disclosure should be placed as close as possible to any claim being qualified.