Chapter 13 Consumer Law

A credit collection agency may contact a debtor at any time.​

False

Advertising that contains an endorsement by a celebrity will not be deemed deceptive.​

False

Creditors attempting to collect debts are generally considered to be debt-collection agencies.​

False

Drugs can be test-marketed to the public before they are ensured to be safe and effective.​

False

The Fair Debt Collection Practices Act attempts to ensure that creditors are always paid by debtors.​

False

A consumer who believes that he or she has been or may be victimized by identity theft may place an alert on his or her credit file.​

True

Federal law governs the use of terms such as fresh on food labels.​

True

Package labels must use words that the ordinary consumer understands.​

True

The Federal Trade Commission is charged with preventing unfair and deceptive trade practices.​

True

Vague generalities and obvious exaggerations are permissible in advertising.

True

Gear Motor Company makes cars. Federal law requires Gear to attach an information label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to​ ​a. every new car. ​b. no car—compliance with the law is voluntary. ​c. select old and new cars. d. ​whichever vehicles Gear chooses.

a. every new car.

Phil has a credit card from Credible Cards, Inc. Credible Cards decides to make changes to Phil's credit-card terms. Credible Cards​ ​a. must give Phil at least thirty days' notice before changing the terms. ​b. must give Phil at least forty-five days' notice before changing the terms. ​c. need not give Phil any notice before changing the terms. ​d. is not allowed to change the terms.

b. must give Phil at least forty-five days' notice before changing the terms.

Creditworthy Loan Company extends credit in the ordinary course of its busi-ness. Under the Truth-in-Lending Act, Creditworthy must inform potential borrowers of​ ​a. credit terms offered by other lenders. ​b. comparative prices for goods to be bought with the borrowed funds. ​c. Creditworthy's credit terms. d. ​the borrowers' credit scores.

c. Creditworthy's credit terms.

Logan's application to Metro Bank for a credit card is denied. Logan can obtain information on his credit history in a credit agency's files under​ ​a. no federal law. ​b. the Equal Credit Opportunity Act. ​c. the Fair Credit Reporting Act. ​d. the Fair Debt Collection Practices Act.

c. the Fair Credit Reporting Act.

The credit department of Mega-Mart often calls Nora at work about an overdue bill. Nora's employer objects. This is a violation of​ a. ​no federal law. ​b. the Fair and Accurate Credit Transactions Act. ​c. the Fair Debt Collection Practices Act. d. ​the Truth-in-Lending Act.

c. the Fair Debt Collection Practices Act.

QT Collection Agency calls Pat several times a day, and sometimes in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to QT for collection. This is a violation of​ a. ​no federal law. ​b. the Fair and Accurate Credit Transactions Act. c. ​the Fair Debt Collection Practices Act. ​d. the Truth-in-Lending Act.

c. ​the Fair Debt Collection Practices Act.

Slow-Brew Coffee Company sells coffee and related beverages. The company's ad contends that ambitious businesspersons "Drink Us & Rise Up in the World!' " The Federal Trade Com-mission would consider this ad to be​ a. ​false and misleading. ​b. impermissibly vague and general. ​c. a deceptive half-truth. ​d. none of the choices.

d. none of the choices.

Teri borrows $10,000 from USA National Bank to remodel a room in her home. This transaction is subject to​ ​a. no federal law. ​b. the Consumer Leasing Act. ​c. the Consumer Product Safety Act. ​d. the Truth-in-Lending Act.

d. the Truth-in-Lending Act.