Chapter 18 Privacy and Consumer Protection

,,reports are reports on a customer's character, general reputation, mode of living, and so on, obtained by personal interviews in the consumer's community.

Blank 1: Investigative Blank 2: consumer

The _______ _________ is the sum of all charges payable directly or indirectly by the debtor or someone else to the creditor as a condition of the extension of credit.

Blank 1: finance Blank 2: charge

Certain creditors can initiate bankruptcy proceedings against a debtor by use of a(an) ___ petition filed with the bankruptcy court.

Blank 1: involuntary

The 1980 Truth-In-Lending Simplification Act limited penalties for credit term disclosure failures that were ________ in nature, not purely technical.

Blank 1: material

Under the Fair Credit Reporting Act (FCRA) an injured consumer can recover actual damages, attorney's fees, and in some circumstances ______ damages.

Blank 1: punitive

The _____ provides for the right to dispute information on credit reports with the information furnisher and permits consumers to place fraud alerts on the report to notify creditors of identity theft.

Fair and Accurate Credit Transactions Act (FACT)

True or false: Punitive damages can be recovered only in the presence of actual damages.

False

True or false: The Fair Credit Reporting Act (FCRA) regulates credit reports only on businesses.

False

True or false: The Fair Debt Collection Practices Act (FDCPA) covers all debt collections.

False

True or false: The Truth-in-Lending Act allows creditors to collect finance charges in excess of those actually disclosed.

False

True or false: The free credit report allowed by the Fair and Accurate Credit Transactions Act (FACT) is required to contain a credit score.

False

The _____ is the primary federal agency that protects consumers in the United States.

Federal Trade Commission

In the context of penalties and remedies for violations of the Federal Trade Commission (FTC) Act, identify the situations in which civil fines may be assessed. (Check all that apply.)

For a knowing violation of prior FTC orders against others For a violation of a consent or cease and desist order For a violation of a trade regulation rule

Which of the following are examined by the Federal Trade Commission (FTC) to determine whether a product advertisement is false or deceptive? (Check all that apply.)

If the claims made in the advertisement would be important to a consumer's decision to buy the product If the failure of the advertisement to include information leaves consumers with a misimpression about the product

Match the alternatives in a bankruptcy proceeding against an individual (in the left column) with the chapters of the bankruptcy law (in the right column).

Liquidation of property matches Choice, Chapter 7 of the bankruptcy law Chapter 7 of the bankruptcy law Adjustment of debts matches Choice, Chapter 13 of the bankruptcy law Chapter 13 of the bankruptcy law

The _____ was enacted as part of the Electronic Communications Privacy Act (ECPA) in 1986 and protects the privacy of communications stored on a server.

Stored Communications Act (SCA)

Identify the agencies that ensure public enforcement of the Equal Credit Opportunity Act (ECOA). (Check all that apply.)

The Department of Justice The Consumer Financial Protection Bureau

Identify the world body that created the Data Protection Directive.

The European Union

Match the consumer protection acts (in the left column) with their consumer protection provisions (in the right column).

The Fair Credit Billing Act matches Choice, Limits liability on lost, stolen, or misused credit cards to $50 Limits liability on lost, stolen, or misused credit cards to $50 The Electronic Fund Transfer Act matches Choice, Limits liability on lost, stolen, or misused automatic teller and check cards (debit cards) to $50 if reported within two business days of consumers' learning of a misuse Limits liability on lost, stolen, or misused automatic teller and check cards (debit cards) to $50 if reported within two business days of consumers' learning of a misuse The Consumer Product Safety Act matches Choice, Requires the Consumer Product Safety Commission to protect consumers against unreasonable risk of harm Requires the Consumer Product Safety Commission to protect consumers against unreasonable risk of harm The Magnuson-Moss Warranty Act matches Choice, Applies to all product warranties on consumer products costing more than $15 Applies to all product warranties on consumer products costing more than $15

Who can enforce the Fair Credit Reporting Act (FCRA)?

The Federal Trade Commission

Select all that apply Identify the transactions that are covered by the Truth-in-Lending Act.

Transactions in which the debtor is a natural person Transactions in which the credit is obtained primarily for personal, family, household, or agricultural purposes Transactions in which the lender is in the business of extending credit in connection with a loan of money

True or false: The U.S. Constitution does not explicitly mention the right to privacy.

True

The _____ gives debtors the right to rescind or cancel certain transactions for a period of three business days from the date of the transactions or from the date they are given the notice of their right to rescind, whichever is later.

Truth-in-Lending Act

When can courts deny bankruptcy discharge to a debtor? (Check all that apply.)

When liabilities arise from drunken driving When his or her debts arise from taxes, alimony, and child support When there are education loans that become due within five years of the filing of a bankruptcy petition

In the context of the Truth-in-Lending Act, the finance charge and annual percentage rate are made known to borrowers by use of a _____.

financing statement

Even if a credit reporting agency reports false information about a consumer, it will not be liable to the consumer if the agency _____.

follows reasonable procedures

Investigative consumer reports that are intended to be covered by the Fair Credit Reporting Act (FCRA) are those usually conducted for _____.

insurance companies

To determine false or deceptive advertising, the Federal Trade Commission (FTC) examines an advertisement, or an ad, by _____.

looking at it from the point of view of a reasonable consumer

Credit reporting agencies must _____, or they will be liable to consumers.

observe reasonable procedures in making investigations and collecting information

The Children's Online Privacy Protection Act (COPPA) requires firms that collect information online on children under the age of 13 to:

provide a privacy policy.

In the context of trade regulation cases involving deceptive advertising, the Federal Trade Commission (FTC) remedy known as corrective advertising requires companies to _____.

run advertisements that admit the prior errors and correct the erroneous information

The Fair Debt Collection Practices Act (FDCPA) permits debt collectors to contact third parties to locate the debtor by _____.

skip-tracing

Much of the litigation surrounding the Equal Credit Opportunity Act (ECOA), to date, concerns the requirement that _____.

specific reasons be given to a consumer who is denied credit

_____ is the basic penalty for trade practice violations under the Federal Trade Commission (FTC) Act.

A civil fine

Match the types of petitions filed to begin bankruptcy proceedings (in the left column) with the people who file them (in the right column).

A voluntary petition matches Choice, Filed by the debtor Filed by the debtor An involuntary petition matches Choice, Filed by one or more creditors of the debtor Filed by one or more creditors of the debtor

Identify the parties to whom the Consumer Financial Protection Bureau's (CFPB's) authority applies. (Check all that apply.)

Any "covered person" offering or providing a consumer financial product Banks Financial businesses that extend credit or service loans

To whom does the Fair Credit Reporting Act (FCRA) apply? (Check all that apply.)

Anyone selling insurance Anyone extending credit

According to the ,______ ________ ________ companies may collect personal information only with consent, keep it only as long as necessary, and transfer to third parties only with permission.

Blank 1: Data Blank 2: Protection Blank 3: Directive

are issued by the Federal Trade Commission (FTC) to specify the agency's view of the legality of a particular industry's trade practices.

Blank 1: Industry Blank 2: guides

In the context of the litigation surrounding the Equal Credit Opportunities Act (ECOA), , the act of refusing to make loans at all in certain areas where property values are low, can discriminate on the basis of race in granting mortgage credit.

Blank 1: redlining

A(n) ___ is a person elected by the creditors to represent the debtor's estate in taking possession of and liquidating the debtor's property.

Blank 1: trustee

Under the prohibitions of the Equal Credit Opportunity Act (ECOA), it is illegal to ask a consumer seeking credit about his or her _____.

Childbearing

Under the Fair Credit Reporting Act (FRCA) when a adverse credit report is issued, consumers have the right to be told the name of the issuing agency, the right to ________ the information in the report, and the right to the information, or at least give their version of the facts in dispute.

Correct

In the context of the Truth-in-Lending philosophy of full disclosure, identify the items included in the finance charge. (Check all that apply.)

Credit reports Finder's fees

Which of the following businesses does the Equal Credit Opportunity Act (ECOA) apply to? (Check all that apply.)

Credit-card issuers Retail stores

Which of the following are included in a financing statement given to a borrower? (Check all that apply.)

Default or delinquency charges Description of any property used as security

_____ that specify the Federal Trade Commission's views on specific trade practices are informal guidelines for business firms.

Industry guides

Identify a true statement about the Truth-in-Lending Act.

It imposes a duty on all persons regularly extending credit to private individuals to inform them fully of the cost of the credit.

Identify the true statements about the Children's Online Privacy Protection Act (COPPA) passed by Congress in 1998. (Check all that apply.)

It is enforced by the Federal Trade Commission (FTC). It applies to any Internet site that knowingly collects information from children under the age of 13, even if this is not the site's main purpose.

In the context of common law privacy torts that arise in consumer transactions, which of the following is true of the tort of intrusion on seclusion?

It prevents one from invading another's private affairs.

Identify a characteristic of the Stored Communications Act (SCA).

It prevents the unauthorized disclosure of stored communications.

Identify the features of the Truth-in-Lending Simplification Act of 1980. (Check all that apply.)

It requires the government to issue model disclosure forms. It eliminates statutory penalties based on purely technical violations of the act.

Which of the following are true statements about the U.S. Bill of Rights?

It requires the government to obtain a search warrant before collecting private information. Its various amendments protect the right to privacy in different ways.

Identify the true statements about the Consumer Financial Protection Bureau (CFPB). (Check all that apply.)

Its authority overlaps that of the Federal Trade Commission (FTC) in administering consumer laws. It was created by the Consumer Financial Protection Act. It has broad authority over federal financial consumer law.

In the context of trade practice regulation, which of the following are remedies that the Federal Trade Commission (FTC) may use in its orders or may seek to impose by court action?

Public notification of trade practice violations Rescission of contracts

In the context of the Truth-in-Lending philosophy of full disclosure, which of the following is excluded from the finance charge?

Sales tax

Identify the category of discrimination that the Equal Credit Opportunity Act (ECOA) is aimed specifically at preventing.

Sex discrimination

Match the consumer protection acts (in the left column) with the commissions that administer them (in the right column).

The Fair Credit Billing Act matches Choice, The Federal Trade Commission The Federal Trade Commission The Electronic Fund Transfer Act matches Choice, The Consumer Financial Protection Bureau The Consumer Financial Protection Bureau The Consumer Product Safety Act matches Choice, The Consumer Product Safety Commission The Consumer Product Safety Commission

In the context of privacy torts that arise in consumer transactions, which of the following is a criterion that determines the actionability of the tort of the public disclosure of private facts?

The disclosure of a private fact must be highly offensive to the reasonable person.

In the context of the Fair Credit Reporting Act (FCRA), identify the rights available to an individual consumer when he or she is rejected for credit, insurance, or employment because of an adverse credit report. (Check all that apply.)

The right to correct the information or at least give the consumer's version of the facts in dispute The right to be told the name of the agency making the report The right to require the credit reporting agency to reveal the information given in the report

What are the characteristics of a trustee in bankruptcy? (Check all that apply.)

The trustee can set aside fraudulent conveyances. The trustee can affirm or disaffirm contracts with the debtor which are yet to be performed.

Under the prohibitions of the Equal Credit Opportunity Act (ECOA), it is illegal to ask a consumer seeking credit about his or her _____.

childbearing plans

Although the Federal Trade Commission Act protects businesses as well as customers, its mission to safeguard customers is promoted by a special agency called _____.

the Bureau of Consumer Protection

A debtor may fail to receive a discharge from any of his or her debts if the courts find that _____.

the debtor has falsified or concealed books of record

In the context of the alternatives in a bankruptcy proceeding against an individual, the debtor repays the creditors the adjusted debts over a period of _____ years.

three to five