UDAAP - I

Question 1

Procedures and scripts used by internal or external debt collectors is an example of an area of higher UDAAP risk.

Answer 1

True

Question 2

A(n) _______ is a waiver of the consumer’s right to contest legal actions in regard to an extension of credit.

Answer 2

Confession of Judgement

Question 3

Types of systematic measures acting as internal controls instituted by a financial services company include reviews, checks and balances, and procedures.

Answer 3

True

Question 4

The Federal Trade Commission (FTC) has the authority to protect consumers against unfair or deceptive acts or practices in commerce.

Answer 4

True

Question 5

An unfair, deceptive, or abusive act or practice never violates other federal or state laws.

Answer 5

False

Question 6

Financial services companies must monitor the activities of employees to ensure they do not engage in unfair, deceptive, or abusive acts or practices with respect to consumer interactions, but the company does not need to monitor the activities of third-party contractors, marketing sales personnel, vendors, and service providers.

Answer 6

False

Question 7

The legal standards for abusive, unfair, and deceptive acts are all the same.

Answer 7

False

Question 8

Who has rule making authority for UDAAP?

Answer 8

Consumer Financial Protection Bureau (CFPB)

Question 9

If Upstart doesn’t receive any complaints about a new product, this means that there are no unfair, deceptive or abusive practices related to the product.

Answer 9

False

Question 10

Consumer complaints are a way that Upstart can identify UDAAP risk.

Answer 10

True

Question 11

What is required to support the standard for unfairness under UDAAP?

Answer 11

It causes or is likely to cause substantial injury to consumers
The injury is not reasonably avoidable by consumers
The injury is not outweighed by countervailing benefits to consumers or to competition

Question 12

Substantial injury can include monetary harm.

Answer 12

True

Question 13

A single substantive complaint does not warrant further review or raise serious concerns.

Answer 13

False

Question 14

What is a red flag to conduct a detailed review of a practice

Answer 14

Presence of Complaints

Question 15

Upstart does not need to identify inherent risks related to consumer harm.

Answer 15

False

Question 16

A representation may be deceptive even if the majority of consumers in the target class do not share the consumer’s interpretation, so long as a significant minority of such consumers is misled.

Answer 16

True

Question 17

Emotional impact may not amount to or contribute to substantial injury.

Answer 17

False

Question 18

All of the below must be present to show that an act or practice is deceptive under UDAAP, EXCEPT

Question 19

All of the following fall represent a higher-risk for UDAAP compliance

Answer 19

Credit Underwriting
Disclosures
Agreements
Debt Collections