Chapter 39 - Consumer Protection

Question 1

Federal Trade Commission

Answer 1

• Bureau of Consumer Protection

- Deal with deceptive and fraudulent advertising.

Question 2

Deceptive Advertising

Answer 2

• An “expressly false statement” regarding a product’s quality, ingredients, or effectiveness.
• FTC can issue a “cease-an-desist” letter (stop advertising NOW).
• Can also order “corrective advertising” if prior advertising was deceptive.

Question 3

FTC v. Bronson Partners

Answer 3

• Deceptively advertising weight loss products.
• FTC wins.
• Penalty was $2 million.

Question 4

Bait and Switch Techniques

Answer 4

• Advertises at a very low price but then the customer comes. They are pressured to buy something else.

Question 5

Fair Packaging & Labeling Act

Answer 5

• Prevents deceptive advertising, serving size, choking hazard, and poison warnings.

Question 6

Door-to-Door Sales, Telemarketing, and Mail Order Sales.

Answer 6

• Three day “cooling off period on door to door sales.
• Gov’t can regulate solicitation
• “Do Not Call List”
• Shipping must occur as advertised.

Question 7

Consumer Financial Protection Bureau

Answer 7

1. Enforces consumer financial laws.

2. Takes complaints on financial issues.

Question 8

Consumer Credit Protection Act

Answer 8

• Made up of a bunch of smaller acts.

Question 9

Fair Debt Collection Practices Act

Answer 9

• If I owe money, collectors can’t call employer, can’t threaten, can’t constantly call, etc.
• Prevents harassment and threats.

Question 10

Truth in Lending Act

Answer 10

• Requires creditors to disclose what annual interest rate you’ll be paying, etc.
• Requires the lender to notify the borrower of a 3 day cancelling period.

Question 11

Regulation Z

Answer 11

• Requires disclosure of APR (Annual % Rate) and total finance charges.

Question 12

Fair Credit Reporting Act

Answer 12

1. Governs credit reporting and procedures.
2. 1 free credit report/year (365 days)
3. If I am denied credit, I can get a free credit report.
   - FCRA
   - You have rights to dispute things on your credit report if info. is incorrect.

Question 13

Equal Credit Opportunity Act

Answer 13

• No discrimination in lending

- ECOA

Question 14

Electronic Funds Transfer Act

Answer 14

• Governs any transaction where I can transfer funds from one account to another.
• ATM, debit cards, etc. are regulated by the federal government.
• If I lose my debit card, I notify that it is lost.
• EFTA

Question 15

Credit Card Accountability & Disclosure Act

Answer 15

• Governs credit card companies.
• Need to tell you how much interest I was paying.
• Congress mandated the due date of bill is 21 days instead of 14 days.
• 45 day notice to customers of increases in interest rates.
• CARD

Question 16

Food and Drug Administration (FDA)

Answer 16

• Make sure that things are safe (food & lasik)

Question 17

Department of Transportation

Answer 17

• Has many subagencies
• Examples = FAA (airlines), NHTSA (highways)
• Governs transportation and tests new model cars.
• DOT

Question 18

Consumer Product Safety Commission (CPSC)

Answer 18

• Issues recalls on unsafe products.