BLAW CH. 19
Advertising controls are extremely strict in Europe compared to in the U.S.
false
Consumers must hire a "credit repair" specialist to get mistakes in consumer (credit) reports corrected.
false
Consumers who borrow money in the U.S. have, in general, far more rights under the law than is true in other wealthy nations such as Germany and the U.K.
false
For the Truth-in- Lending Act to apply, the debtor must be a business organization.
false
If a credit reporting agency is found to have violated the rights of a consumer, damages may not exceed $25,000.
false
If a product is labeled "fresh" it may either be raw, unprocessed food or frozen food, so long as it was frozen fresh.
false
Leases paid by the Consumer Leasing Act must be for six months or longer and must have a contractual obligation of less than $10,000.
false
Maximum judgment in an FTC deception cases is $1 million.
false
Most advanced European nations have substantially stronger regulations of drugs than exist in the U.S.
false
Once the FDA has approved a drug for sale there may be no liability imposed on the drug manufacturers for side-effects that were revealed during the testing process.
false
The "R-value Rule" states that refrigerator makers must clearly explain to consumers what kind of insulation is used in their products.
false
The Consumer Leasing Act does for consumer leases what the Fair Credit Billing Act does for consumer credit.
false
The Department of Agriculture has primary responsibility for sanitation of foods; the FDA focuses on food additives.
false
The FDA does not regulate health claims made on food products.
false
The FDA requires nutrition labels only on canned or bottled foods sold to the public.
false
The FDA uses a food purity standard that says that an additive should have no more than a one-in- a-million chance of causing cancer.
false
The FDA was created in 1914.
false
The FTC deception policy is applied equally to all products regardless of the sex, age, race or financial condition of the consumers in the relevant market.
false
The FTC deception policy is the same, in effect, as common law fraud.
false
The FTC deception policy states that any deceptive practice likely to mislead any consumer will be challenged by Congress.
false
The FTC is required by law to sue all advertisers that publish deceptive ads.
false
The FTC may not bring an action against a company for an unfair act; the act must be unfair and deceptive.
false
The FTC may not prosecute companies that sell investment scams; that responsibility falls with the Securities and Exchange Commission.
false
The FTC may not regulate products sold by telemarketing; those are controlled by the Federal Communications Commission.
false
The FTC's advertising substantiation program requires media ads to be registered with the FTC for review before being used to prevent deception.
false
The Food Quality Protection Act of 1996 states that food should have a "de minimus" chance of harming consumers.
false
The Food, Drug and Cosmetic Act of 1938 allowed the FDA to impose pure food standards for the first time.
false
The Truth-in- Lending Act does not apply to consumer real estate purchases financed by a mortgage.
false
The primary purpose of the Truth-in- Lending Act is to disclose to consumers the reason(s) why they are denied credit when applied for in credit transactions.
false
To the FDA "low fat" means less than 10 grams of fat per serving.
false
Under the FTC's advertising substantiation program, if any consumers will be misled by an advertisement, it must be modified.
false
Under the Fair Credit Reporting Act, a credit report may be issued for any legitimate business or personal need.
false
Under the Lanham Act, Ford was able to sue General Motors for false advertising that hurt Ford pickup sales, and collected over $100 million in damages.
false
Under the Lanham Act, the FTC may sue advertisers for damages for deceptive ads.
false
Under the Truth-in- Lending Act, if a creditor violates disclosure requirements, liability will be imposed only if monetary damages to the consumer can be shown.
false
When a consumer is refused credit, the Fair Credit Reporting Act requires the consumer reporting agency to inform the consumer of the rejection.
false
Before passage of the 1938 Food, Drug and Cosmetic Act there were no such things as prescription drugs. That is, people could buy any legal drug.
true
Common vitamins-niacin and riboflavin-do not have to be listed on nutrition labels.
true
Creditors who knowingly fail to make proper disclosures to consumers may face criminal penalties.
true
Drugs must complete three phases of trials before considered by the FDA for release to the public.
true
If a consumer complains about incorrect information in a credit report, the credit reporting agency must respond within 30 days.
true
If a person is injured by a drug because a physician gives an improper dose, the maker may be protected from liability under the "learned intermediary" doctrine.
true
In recent years, the FDA has allowed drugs that show some promise for life-threatening diseases such as AIDS to be used more quickly than normally.
true
It costs an average of about a billion dollars to develop one new drug and clear all FDA rules before marketing the product.
true
Making illegal copies of patented drugs is a serious problem for public health around the world.
true
Many FTC complaints are settled by consent decree rather than a trial.
true
Medical devices approved by the FDA before being sold and then monitored for problems.
true
Medical devices are subject to FDA regulation.
true
Once the FDA approves a drug for the market, it has no further power to control the sale of that drug except to issue public warnings.
true
One reason for passage of the Pure Food and Drug Act is the high death rate of soldiers during the Spanish-American War due to impure food.
true
State attorneys general usually have the authority to attack deceptive business practices.
true
States have laws similar to the FTC's powers to attack deceptive business practices.
true
The 1906 Pure Food and Drug Act provided primarily for protection against adulteration and misbranding of food and drugs.
true
The 1906 Pure Food and Drug Act was the first step by the federal government to regulate food safety.
true
The British Office of Fair Trading operates somewhat like the FTC in the U.S.
true
The Consumer Credit Protection Act was the first major federal legislation on consumer credit.
true
The Consumer Leasing Act applies to leases of personal property to be used for personal or household purposes.
true
The Consumer Leasing Act would apply to a lease of furniture for an apartment for a year.
true
The Consumer Leasing Act would not apply to the rental of a car for a week while on vacation.
true
The Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) imposed new restrictions on credit card companies in 2010.
true
The Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) imposes restriction on how often interest rates on cards may be changed.
true
The Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) gave card oversight to the Federal Reserve Board.
true
The Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) states that gift cards may not expire for at least five years.
true
The Delaney Clause (the Food Additives Amendment) allows the FDA to regulate food additives.
true
The Department of Agriculture has primary responsibility for sanitation of meats and poultry; the FDA has responsibility for most other foods.
true
The FDA decides what drugs may be sold as well as what drugs may be sold over the counter and what drugs may be sold only by prescription.
true
The FDA issues standards for nutrition labels on food.
true
The FDA may seize shipments of products that are falsely labeled.
true
The FDA seized shipments of orange juice that were not properly labeled.
true
The FTC deception policy holds that failure to reveal certain information may be found to be deceptive.
true
The FTC has the authority to attack deceptive sales practices via the Internet just like any other sale.
true
The FTC investigates a wide range of practices suspected to be unfair and deceptive.
true
The FTC may prosecute companies that solicit investments for things such as phony oil and gas wells.
true
The FTC may sue a company for an unfair act that is not deceptive.
true
The FTC was created by Congress to help enforce antitrust laws and deal with deceptive business practices.
true
The FTC's advertising substantiation program allows the FTC to ensure that retailers have a reasonable basis for claims made about products they are selling.
true
The Fair Credit Billing Act holds that when consumers think there is a mistake in a credit card bill they have sixty days in which to notify the creditor in writing.
true
The Fair Credit Billing Act makes it illegal for credit card companies to send cards to people who do not request them.
true
The Fair Credit Reporting Act focuses on confidentiality and accuracy in compiling and distributing consumer credit reports.
true
The Fair and Accurate Credit Transactions Act (FACT Act) requires credit reporting services to let consumers correct bad information in their credit reports.
true
The Fair and Accurate Credit Transactions Act (FACT Act) requires credit reporting services to let consumers see their credit reports annually for free.
true
The Food Quality Protection Act states that food should have a "reasonable certainty of no harm"
true
The Food, Drug and Cosmetic Act of 1938 gave the FDA broad powers to regulate food production and prohibit false advertising of drugs.
true
The Kefauver Amendment of 1962 requires the FDA to approve drugs based on proven effectiveness, not just safety.
true
The Mail Order Rule attempts to reduce the incidence of deceptive practices in the first-class postal business.
true
The Mail Order Rule requires goods to be delivered by mail to arrive within clearly set time or allow the customer out of the deal.
true
The Truth-in- Lending Act allows a creditor to avoid liability for improper disclosure if the violation is corrected within fifteen days from the time it is discovered by the creditor and before the consumer gives written notification of the error.
true
The Truth-in- Lending Act does not apply to consumer credit transactions over $25,000; except for real estate.
true
The Truth-in- Lending Act requires itemization of charges for such items as credit life insurance.
true
The Truth-in- Lending Act requires lenders to disclose the annual percentage rate of interest (APR) the same way for all transactions.
true
The Used-Car rule issued by the FTC has increased the price of used cars about five percent.
true
The Used-Car rule issued by the FTC requires used car sellers to give consumers clear warranty information.
true
The primary purpose of the Truth-in- Lending Act is to provide disclosure of basic information about the cost and terms of credit to consumer-borrowers.
true
The specific finance charges that must be provided to a debtor by a creditor under Truth-in-Lending are detailed by the Federal Trade Commission in Regulation Z.
true
Trade regulation rules tend to be issued in areas where the FTC thinks there are particular problems with deception.
true
Under the FTC's advertising substantiation program, if the FTC attacks an ad the usual result is that the advertiser agrees to stop running the ad.
true
Under the Lanham Act, U-Haul was able to sue a competitor for false advertising and was awarded $40 million in damages.
true
Under the Lanham Act, a private party injured by the false ads of a competitor may sue the competitor for double value of lost profits.
true
Under the Truth-in- Lending Act, a creditor who violates disclosure rules may have to pay the consumer double the finance charged owed by the consumer (up to $1,000) plus attorney fees and court costs.
true
When the FTC proposes a trade regulation rule, it must be published in the Federal Register for public inspection before it becomes effective.
true
