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Exam 41: Consumer Law

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Question 21

Multiple Choice

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Faux Products Inc., in its ads, makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about

A) its products only.
B) its competitors' products only.
C) its products and its competitors' products.
D) none of the choices.

E) B) and C)
F) None of the above

Correct Answer

verified

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Question 22

Multiple Choice

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Whole Grains Company wants to make and market new processed bread and cereal products. On each product's label, standard nutrition facts are

A) prohibited.
B) required.
C) voluntary.
D) discretionary.

E) A) and B)
F) A) and C)

Correct Answer

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Question 23

True/False

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Under the Fair Credit Reporting Act, a consumer can request the identity of anyone who has received a credit agency's report on the consumer.

Deceptive advertising occurs if a reasonable consumer believes an advertising claim.

The Federal Trade Commission (FTC) receives numerous complaints that a Renewal Subscriptions Inc. ad is deceptive. The FTC's first step is to

Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites, Jill, the salesperson, tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is

Federal law regulates the use of such terms as low fat on food labels.

Consumer Staples Inc. includes in its advertising obvious exaggerations, vague generalities, and puffery about its products. The firm may be subject to sanctions for

Advertising will be deemed deceptive if it includes a claim that omits a material fact about a product.

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to

Rollo has a credit card from Shopping Cards Inc. To change the terms, Shopping Cards must

Pro Motor Company makes cars. Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to

Value Loan Company extends credit to consumers. Value Loan applies a variety of requirements to determine applicants' qualifications for credit, the amount, the interest rate, and other terms. Under the Equal Credit Opportunity Act, the lender cannot base its credit decisions on an applicant's

With respect to tainted foods, the focus of federal regulators has shifted from responding to incidents of contamination to preventing them.

The Federal Commerce Commission is charged with the goal of preventing unfair and deceptive trade practices.

Labels must be accurate and use words easily understood by the ordinary consumer.

The Telemarketing Sales Rule applies to any offer-domestic or foreign-made to consumers in the United States.

A debt-collection agency can always contact a debtor at his or her place of employment.

Lawnscape Company and Mowers Inc. make yard tools. Both companies use only steel produced in the United States. Lawnscape's ad claims, "We use only U.S. steel, while our competitor uses inferior foreign steel!" Under the advertising standards of the Federal Trade Commission Act, this statement is most likely

An obviously exaggerated advertising claim will be considered deceptive even if a reasonable consumer would not believe it to be true.