Chapter 24-Consumer protection

Advertising that appears to be based on factual evidence will not be deemed deceptive even if it is not reasonably supported by evidence. T/F

FALSE

Deceptive advertising does not occur in the online environment. T/F

FALSE

The Consumer Product Safety Commission is the primary agency that issues regulations on food labeling. True False

FALSE

The Food and Drug Administration does not have the authority to directly recall any food products that it suspects are tainted but must rely on the producers to recall items. True False

FALSE

Puffery constitutes deceptive advertising. T/F

FALSE PUFFERY MEANS OBVIOUS EXAGGERATION

Account numbers on credit-card receipts must be truncated (shortened). T/F

TRUE

Insurance companies must spend at least 85 percent of all premium dollars from large employers on benefits and quality improvements. True False

TRUE

Restaurants must post guidelines on the number of calories that an average person requires daily. T/F

TRUE

The Consumer Product Safety Commission conducts research on the safety of individual consumer products and maintains a clearinghouse on the risks associated with various products. T/F

TRUE

The Federal Reserve Board of Governors has issued a regulation that governs credit provisions associated with sales contracts—Regulation Z. T/F

TRUE

Under federal law, the calorie content of the food on a menu must be posted by Organic Mix, LLC, if Organic Mix is a restaurant chain with twenty or more locations. a food distributor with twenty or more customers. a food processor with twenty or more products. a food producer with twenty or more acres.

a restaurant chain with twenty or more locations.

In the ordinary course of business, Loan2Buy Corporation offers credit to Mai and other consumers and reports on the loans to credit agencies. To save time and money, Loan2Buy generally does not correct or update its reported information. This is most likely to result in a levy of a nominal fine. an assessment of damages. an order of rescission of the loan contracts. no sanctions.

an assessment of damages.

Through careless manufacturing practices, Metalworks Company makes and distributes unsafe products that are sold to Nabi and other consumers. This may be subject to sanctions under federal and state law. federal law only. no law, according to the principles of freedom to contract. state law only.

federal and state law.

Jasmine receives an unsolicited credit card in the mail and tosses it on her desk. Without Jasmine's permission, her roommate Ilene uses the card to buy a new tablet for $500. Jasmine is liable for $500. liable for $250. liable for $50. not liable for any amount.

not liable for any amount.

Grid Tool Company makes and sells tools. One of the tools is believed to be hazardous. The appropriate government agency may require Grid to export the tool and sell it only abroad. increase the price to cover the cost of any injuries or damage. reduce the price to indicate the hazard to consumers. remove the tool from the market.

remove the tool from the market.

Debt & Loan Collection Agency calls Ethel several times a day, and sometimes in the middle of the night, about an overdue bill that a Furniture4U store turned over to Debt & Loan for collection. This is a violation of no federal law. the Fair and Accurate Credit Transactions Act. the Fair Debt Collection Practices Act. the Truth-in-Lending Act.

the Fair Debt Collection Practices Act.

The credit department of Discount Retail Stores Inc. calls Emmett at work about an overdue bill. Emmett's employer objects. Discount Retail's credit department continues to call Emmett at work. This is a violation of no federal law. the Fair and Accurate Credit Transactions Act. the Fair Debt Collection Practices Act. the Truth-in-Lending Act.

the Fair Debt Collection Practices Act.

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

the Truth-in-Lending Act

Grover signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances—stove, refrigerator, dishwasher, microwave, and toasteroven—for $3,999. This transaction is subject to no federal law. the Fair Credit Reporting Act. the Telecommunications Act. the Truth-in-Lending Act.

the Truth-in-Lending Act.

Cecilia borrows $20,000 from Debit & Credit Union to repair her home and to buy a car. She buys a laptop from eStuf Store in a transaction financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to the car loan only. the home repair loan only. the retail installment sale only. the car loan, the home repair loan, and the retail installment sale.

the car loan, the home repair loan, and the retail installment sale.