Chapter 45: consumer law (new)

Question 1

false advertising under the FTC act

Answer 1

1938 amendment prohibits unfair or deceptive marketing practices

Question 2

unfair practices

Answer 2

act forbids marketing unreasonably dangerous products

Question 3

forbidden deceptive practices

Answer 3

• material misrepresentation

- likely to mislead a reasonable consumer under circumstances

Question 4

3 categories of false advertising defined by the FTC

Answer 4

1. scientifically unsupported advertising
2. false claims of celebrity use
3. bait advertising - bait and switch

Question 5

5 remedies for false advertising under FTC

Answer 5

1. cease and desist
2. counter advertising
3. consumer redress actions
4. multiple products order
5. consent orders

Question 6

door to door sales regulations

Answer 6

3 day cooling off period, may cancel if postmarked by third business day

Question 7

used car buyer’s guide: dealers must disclose 4 things

Answer 7

1. warranty or “as is”
2. information on service contracts or promises
3. must suggest mechanical inspection
4. must suggest getting promises in writing

Question 8

funeral home regulations

Answer 8

• itemized prices

- price gouging prohibited

Question 9

Magnuson Moss Federal breach of warranty act

Answer 9

• actual damages and attorney’s fees for breaches of warranty
• minimum standards for “full warranties”

Question 10

4 powers of the consumer product safety commission

Answer 10

1. set safety standards for consumer products
2. ban unsafe products
3. order recalls of products imminently hazardous
4. regulate safely reporting by manufacturers

Question 11

truth in lending act

Answer 11

• regulates businesses making loans or extending credit

- protects: natural persons, loans less than $53k or on personal residences, and consumer transactions only

Question 12

2 ways lending is regulated

Answer 12

1. no discrimination in extending credit

2. disclosure under regulation Z of the fed

Question 13

two disclosure requirements of reg Z

Answer 13

1. open-end financing: credit card bill and agreement must disclose finance and other charges
2. closed-end financing: disclosure of amount financed, payments, late charges

Question 14

consumer rights in credit cards and fair billing act

Answer 14

• withhold payment on card if dispute with merchant and good faith effort
• procedures for billing disputes
• limits on charges for unauthorized use ($50)

Question 15

fair credit reporting act–3 purposes:

Answer 15

1. assures legitimate business use of credit information
2. regulates obsolete information
3. helps guarantee accuracy

Question 16

fair credit reporting act–2 consumer rights:

Answer 16

1. disclosure of reports

2. reports must include corrections or consumer’s written explanation of incident

Question 17

fair credit reporting act–2 remedies:

Answer 17

1. actual damages for negligence

2. if willful misreporting, then punitive damages and attorney’s fees in addition to actual damages

Question 18

fair debt collection practices governs (3)…

Answer 18

1. outside collection agents
2. collection agencies
3. attorneys

Question 19

fair debt collection–consumer rights

Answer 19

• validation notice
• most communication must cease if attorney involved or debtor declines communication
• collectors cannot use deception or harassment

Question 20

collection behaviors expressly prohibited (6)

Answer 20

1. contacting debtor at work if debtor’s employer objects
2. contacting a debtor who has declined contact
3. contacting debtor before 8am or after 9pm
4. contacting 3rd parties about the debt
5. using obscene or threatening language when communicating with the debtor
6. misrepresenting the collection agency as a lawyer or a police officer