Consumer Protection Quiz

Regulation Z

A set of rules issued by the Federal Reserve Board of Governors to implement the provisions of the Truth-in-Lending Act.

Bait-and-Switch Advertising

Advertising a product at a very attractive price (the bait) and then, once the consumer is in the store, saying that the advertised product either is not available or is of poor quality. The customer is then urged to purchase (switched to) a more expensive item.

Deceptive Advertising

Advertising that misleads consumers, either by making unjustified claims concerning a product's performance or by omitting a material fact concerning the product's composition or performance.

Cease-and-Desist Order

An administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal.

Validation Notice

An initial notice to a debtor from a collection agency, required by federal law, informing the debtor that he or she has thirty days to challenge the debt and request verification.

Multiple Product Order

An order issued by the Federal Trade Commission to a firm that has engaged in deceptive advertising by which the firm is required to cease and desist from false advertising not only in regard to the product that was the subject of the action but also in regard to all the firm's other products.

"Cooling-off" Laws

Laws that allow buyers a period of time, such as three business days, in which to cancel door-to-door sales contracts.

Counteradvertising

New advertising that is undertaken pursuant to a Federal Trade Commission order for the purpose of correcting earlier false claims that were made about a product.