A.5 Consumer Protection Laws

Question 1

Which of the following laws established a process for consumers to dispute errors on their credit reports?

A. Fair Credit Reporting Act
B. Truth in Lending Act
C. Fair Debt Collection Practices Act
D. Consumer Credit Protection Act

Answer 1

A. Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) requires credit reporting agencies to investigate disputes submitted by consumers and correct any errors found.

A.5 Consumer Protection Laws

Question 2

Which of the following laws requires companies to provide customers with clear and concise information about their products or services?

A. Fair Credit Reporting Act
B. Truth in Lending Act
C. Fair Debt Collection Practices Act
D. Truth in Advertising Act

Answer 2

D. Truth in Advertising Act

Advertising Act requires companies to provide customers with truthful and non-misleading information about their products or services.

A.5 Consumer Protection Laws

Question 3

Which of the following laws requires companies to provide customers with a 3-day cooling-off period during which they can cancel a contract without penalty?

A. Truth in Lending Act
B. Fair Debt Collection Practices Act
C. Fair Credit Billing Act
D. Federal Trade Commission’s Cooling-Off Rule

Answer 3

D. Federal Trade Commission’s Cooling-Off Rule

The Federal Trade Commission’s Cooling-Off Rule requires companies to provide customers with a 3-day cooling-off period during which they can cancel a contract without penalty.

A.5 Consumer Protection Laws

Question 4

Which of the following laws prohibits debt collectors from harassing, abusing, or misleading customers?

A. Fair Credit Reporting Act
B. Truth in Lending Act
C. Fair Debt Collection Practices Act
D. Consumer Credit Protection Act

Answer 4

C. Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from harassing, abusing, or misleading customers, and requires them to provide certain information when collecting debts.

A.5 Consumer Protection Laws

Question 5

Which of the following laws requires lenders to disclose the true cost of credit to consumers?

A. Fair Credit Reporting Act
B. Truth in Lending Act
C. Fair Debt Collection Practices Act
D. Fair Credit Billing Act

Answer 5

B. Truth in Lending Act

The Truth in Lending Act (TILA) requires lenders to disclose the true cost of credit to consumers, including interest rates, fees, and other charges.

A.5 Consumer Protection Laws

Question 6

Which of the following laws prohibits companies from discriminating against customers based on their race, religion, gender, or national origin?

A. Fair Credit Reporting Act
B. Equal Credit Opportunity Act
C. Fair Debt Collection Practices Act
D. Fair Housing Act

Answer 6

B. Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) prohibits companies from discriminating against customers based on their race, religion, gender, or national origin when providing credit.

A.5 Consumer Protection Laws

Question 7

Which of the following laws requires companies to provide customers with a notice of their privacy policies?

A. Gramm-Leach-Bliley Act
B. Fair Credit Reporting Act
C. Fair Debt Collection Practices Act
D. Consumer Credit Protection Act

Answer 7

A. Gramm-Leach-Bliley Act

The Gramm-Leach-Bliley Act requires companies to provide customers with a notice of their privacy policies and to protect the confidentiality of customer information.

A.5 Consumer Protection Laws

Question 8

Which of the following laws prohibits companies from making false or misleading claims about their products or services?

A. Truth in Advertising Act
B. Fair Credit Reporting Act
C. Fair Debt Collection Practices Act
D. Fair Credit Billing Act

Answer 8

A. Truth in Advertising Act

The Truth in Advertising Act prohibits companies from making false or misleading claims about their products or services, and requires them to provide customers with accurate information.

A.5 Consumer Protection Laws

Question 9

Which of the following laws requires companies to provide customers with a written explanation of their rights and responsibilities when using electronic funds transfer services?

A. Electronic Funds Transfer Act
B. Fair Credit Reporting Act
C. Fair Debt Collection Practices Act
D. Fair Credit Billing Act

Answer 9

A. Electronic Funds Transfer Act

The Electronic Funds Transfer Act (EFTA) requires companies to provide customers with a written explanation of their rights and responsibilities when using electronic funds transfer services, such as debit cards, ATM transactions, and direct deposits.

A.5 Consumer Protection Laws

Question 10

Which of the following laws prohibits companies from engaging in unfair, deceptive, or abusive practices when providing financial products or services?

A. Consumer Financial Protection Act
B. Fair Credit Reporting Act
C. Fair Debt Collection Practices Act
D. Fair Credit Billing Act.

Answer 10

A. Consumer Financial Protection Act

The Consumer Financial Protection Act (CFPA) prohibits companies from engaging in unfair, deceptive, or abusive practices when providing financial products or services, and establishes the Consumer Financial Protection Bureau to enforce consumer protection laws.

A.5 Consumer Protection Laws

Question 11

John purchased a car from a dealer and later found out that the car had been in a serious accident and had significant damage that was NOT disclosed to him. Which of the following laws provides John with a remedy for this situation?

A. Truth in Lending Act
B. Fair Debt Collection Practices Act
C. Fair Credit Reporting Act
D. Magnuson-Moss Warranty Act

Answer 11

D. Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act requires dealers to provide a written warranty for new cars and prohibits them from disclaiming or modifying implied warranties. John can file a claim under this law to seek remedies for the undisclosed damage.

A.5 Consumer Protection Laws

Question 12

Emily received a call from a debt collector who used abusive language and threatened to garnish her wages if she didn’t pay her debt immediately. Which of the following laws prohibits debt collectors from engaging in such behavior?

A. Fair Credit Reporting Act
B. Truth in Lending Act
C. Fair Debt Collection Practices Act
D. Consumer Credit Protection Act

Answer 12

C. Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using abusive language or threatening consumers and requires them to provide certain information when collecting debts.

A.5 Consumer Protection Laws

Question 13

Adam received a loan from a lender that charged him a higher interest rate than his credit score warranted. Which of the following laws prohibits lenders from discriminating against consumers based on their credit history?

A. Fair Credit Reporting Act
B. Truth in Lending Act
C. Equal Credit Opportunity Act
D. Fair Credit Billing Act

Answer 13

C. Equal Credit Opportunity Act

The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against consumers based on their credit history, including charging higher interest rates.

A.5 Consumer Protection Laws

Question 14

Lisa received a credit card statement that included unauthorized charges. Which of the following laws provides Lisa with a process to dispute the charges?

A. Truth in Lending Act
B. Fair Credit Reporting Act
C. Fair Credit Billing Act
D. Electronic Funds Transfer Act

Answer 14

C. Fair Credit Billing Act

The Fair Credit Billing Act (FCBA) provides consumers with a process to dispute billing errors, including unauthorized charges on their credit card statements.

A.5 Consumer Protection Laws

Question 15

Tom received an email from a company that offered him a loan with no credit check required. Which of the following laws prohibits companies from making false or misleading claims about their products or services?

A. Fair Debt Collection Practices Act
B. Fair Credit Reporting Act
C. Truth in Advertising Act
D. Consumer Financial Protection Act

Answer 15

C. Truth in Advertising Act

The Truth in Advertising Act prohibits companies from making false or misleading claims about their products or services, including claiming that no credit check is required for a loan.

A.5 Consumer Protection Laws

Question 16

Case Study: Jaden’s Credit Card Woes

Jaden is a 30-year-old marketing executive who recently applied for a mortgage to buy his first house. To his astonishment, he was informed by the bank that he had several overdue credit card payments over the past year, which negatively affected his credit score. Jaden was certain that he had never missed a payment. On obtaining a copy of his credit report, he discovered several unauthorized charges on one of his credit cards.

After investigating further, he realized that someone had fraudulently used his credit card details. Jaden promptly contacted his credit card company and was informed that they would look into the matter. A month later, the company got back to Jaden stating that they couldn’t confirm the unauthorized usage and would not be reversing the charges.

Frustrated and feeling helpless, Jaden wondered about his rights in this situation and if there were any laws to protect consumers like him.

Question:

Under the Fair Credit Reporting Act (FCRA), is Jaden entitled to a free credit report in this situation?

A. Yes, but only from one major credit reporting agency
B. No, he can only obtain a free credit report annually
C. Yes, he is entitled to a free report from each of the credit reporting agencies yearly
D. No, only the credit card company can request this on his behalf

Answer 16

C. Yes, he is entitled to a free report from each of the credit reporting agencies yearly

Under the FCRA, an individual has the right to a free credit report if they believe the report contains errors due to fraud.

A.5 Consumer Protection Laws

Question 17

Case Study: Jaden’s Credit Card Woes

Jaden is a 30-year-old marketing executive who recently applied for a mortgage to buy his first house. To his astonishment, he was informed by the bank that he had several overdue credit card payments over the past year, which negatively affected his credit score. Jaden was certain that he had never missed a payment. On obtaining a copy of his credit report, he discovered several unauthorized charges on one of his credit cards.

After investigating further, he realized that someone had fraudulently used his credit card details. Jaden promptly contacted his credit card company and was informed that they would look into the matter. A month later, the company got back to Jaden stating that they couldn’t confirm the unauthorized usage and would not be reversing the charges.

Frustrated and feeling helpless, Jaden wondered about his rights in this situation and if there were any laws to protect consumers like him.

Question:

According to the Fair Credit Billing Act (FCBA), what is the maximum amount Jaden can be held liable for unauthorized charges on his credit card?

A. $0
B. $50
C. $500
D. The full amount of unauthorized charges

Answer 17

B. $50

According to the FCBA, if an unauthorized charge appears on a consumer’s credit card statement, the consumer’s liability is limited to $50.

A.5 Consumer Protection Laws

Question 18

Case Study: Jaden’s Credit Card Woes

Jaden is a 30-year-old marketing executive who recently applied for a mortgage to buy his first house. To his astonishment, he was informed by the bank that he had several overdue credit card payments over the past year, which negatively affected his credit score. Jaden was certain that he had never missed a payment. On obtaining a copy of his credit report, he discovered several unauthorized charges on one of his credit cards.

After investigating further, he realized that someone had fraudulently used his credit card details. Jaden promptly contacted his credit card company and was informed that they would look into the matter. A month later, the company got back to Jaden stating that they couldn’t confirm the unauthorized usage and would not be reversing the charges.

Frustrated and feeling helpless, Jaden wondered about his rights in this situation and if there were any laws to protect consumers like him.

Question:

What is the timeframe within which Jaden needs to report the unauthorized charges to his credit card company under the FCBA to not be held liable?

A. Within 30 days after receiving the bill with the error
B. Within 60 days after receiving the bill with the error
C. Within 90 days after detecting the fraud
D. Anytime, as there is no specific time limit

Answer 18

B. Within 60 days after receiving the bill with the error

Under the FCBA, consumers must send a written billing error notice to the creditor within 60 days of receiving the bill containing the error to be protected.

A.5 Consumer Protection Laws

Question 19

Case Study: Jaden’s Credit Card Woes

Jaden is a 30-year-old marketing executive who recently applied for a mortgage to buy his first house. To his astonishment, he was informed by the bank that he had several overdue credit card payments over the past year, which negatively affected his credit score. Jaden was certain that he had never missed a payment. On obtaining a copy of his credit report, he discovered several unauthorized charges on one of his credit cards.

After investigating further, he realized that someone had fraudulently used his credit card details. Jaden promptly contacted his credit card company and was informed that they would look into the matter. A month later, the company got back to Jaden stating that they couldn’t confirm the unauthorized usage and would not be reversing the charges.

Frustrated and feeling helpless, Jaden wondered about his rights in this situation and if there were any laws to protect consumers like him.

Question:

Which act mandates the credit reporting agencies to place a fraud alert on Jaden’s credit report upon his request?

A. Truth in Lending Act
B. Fair Debt Collection Practices Act
C. Fair Credit Reporting Act
D. Consumer Financial Protection Act

Answer 19

C. Fair Credit Reporting Act

The FCRA allows individuals to request a fraud alert on their credit report if they suspect or have confirmed they are a victim of identity theft.

A.5 Consumer Protection Laws

Question 20

Case Study: Jaden’s Credit Card Woes

Jaden is a 30-year-old marketing executive who recently applied for a mortgage to buy his first house. To his astonishment, he was informed by the bank that he had several overdue credit card payments over the past year, which negatively affected his credit score. Jaden was certain that he had never missed a payment. On obtaining a copy of his credit report, he discovered several unauthorized charges on one of his credit cards.

After investigating further, he realized that someone had fraudulently used his credit card details. Jaden promptly contacted his credit card company and was informed that they would look into the matter. A month later, the company got back to Jaden stating that they couldn’t confirm the unauthorized usage and would not be reversing the charges.

Frustrated and feeling helpless, Jaden wondered about his rights in this situation and if there were any laws to protect consumers like him.

Question:

If Jaden is unsatisfied with his credit card company’s response, which federal agency can he approach to file a complaint?

A. Federal Reserve Board
B. Securities and Exchange Commission
C. Federal Trade Commission
D. Department of Housing and Urban Development

Answer 20

C. Federal Trade Commission

The Federal Trade Commission (FTC) is responsible for handling complaints regarding identity theft and unauthorized credit card charges.

A.5 Consumer Protection Laws