Ch. 18 Reading

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

-Anyone selling insurance -Anyone extending credit

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

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

-Finder's fees -Credit reports

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 trade regulation rule -For a violation of a consent or cease and desist order

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

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 types of persons seeking credit reports. (Check all that apply.)

-Persons seeking insurance -Persons seeking jobs

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?

-Rescission of contracts -Public notification of trade practice violations

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

-Retail stores -Credit-card issuers

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

-The Consumer Financial Protection Bureau -The Department of Justice

Identify the true statements about the Federal Trade Commission (FTC). (More than one option may be correct.)

-The FTC is an independent regulatory agency. -The FTC's budget is annually approved by Congress, and its commissioners are appointed for four-year terms by the president. -The FTC decides what is deceptive or unfair in trade practices and whether there is a need to make new rules and bring new cases.

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 require the credit reporting agency to reveal the information given in the report -The right to be told the name of the agency making the report

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

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

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

-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 -Transactions in which the debtor is a natural person

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

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

_____ 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 -Filed by the debtor An involuntary petition -Filed by one or more creditors of the debtor

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 Reason: This is false. Actual damages can include recovery for embarrassment and mental distress. Punitive damages can be recovered even in the absence of actual damages.

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

False Reason: This is false. The Fair Debt Collection Practices Act (FDCPA) covers only consumer debt collections. It applies to agencies and individuals whose primary business is the collection of consumer debts for others.

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

False Reason: This is false. The civil liability provisions of the Truth-in-Lending Act make creditors liable to debtors for actual damages and an amount equal to twice the finance charge. Creditors cannot collect finance charges in excess of those actually disclosed.

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 Reason: This is false. The free credit report allowed by the Fair and Accurate Credit Transactions Act (FACT) is not required to contain a credit score. Consumers must be allowed to purchase the score under the FACT Act.

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

Federal Trade Commission

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

Industry Guides

_____ 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.

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). Instructions

Liquidation of property -Chapter 7 of the bankruptcy law Adjustment of debts -Chapter 13 of the bankruptcy law

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

Sex discrimination

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

The Federal Trade Commission

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

True Reason: This is true. The U.S. Constitution does not explicitly mention the right to privacy. Courts have, instead, found aspects of privacy to be protected by various amendments, particularly in the Bill of Rights.

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

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

From a debtor's point of view, the purpose of bankruptcy is to secure a(n) _____ of further obligation to a creditor.

discharge

Trade practice regulation as enforced by the Federal Trade Commission (FTC) ensures ________ competition by preventing those who would deceive consumers from diverting trade from those who compete honestly.

fair

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.

finance charge

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

__________ 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.

investigative consumer

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

involuntary

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

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

material

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

observe reasonable procedures in making investigations and collecting information

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

punitive

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.

redlining

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

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

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

Due to complaints that some credit-collection agencies used techniques of harassment, deception, and personal abuse to collect debt, Congress in 1978 passed _____.

the Fair Debt Collection Practices Act (FDCPA)

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

The Federal Trade Commission's (FTC's) consumer protection mission and enforcement of Section 5 varies according to the economic orientation of Congress and of _____.

the president

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

The Federal Trade Commission (FTC) furthers consumer protection through _____ regulation that ensures fair competition by preventing those who would deceive consumers from diverting trade from those who compete honestly.

trade practice

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.

trustee