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Exam 15: Product Liability and Consumer Protection

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Question 21

Multiple Choice

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After receiving her credit card bill, Claire feels that the credit card company has made a mistake. Several transactions are not hers. The law that has established procedures for the prompt handling of such billing disputes is known as the:

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

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

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Question 22

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The seller of an automobile must provide a written statement disclosing the odometer reading at the time of the transfer of title of a motor vehicle.

A) True
B) False

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Question 23

Multiple Choice

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Under the ____________, sellers must ship orders within the time promised in their advertisements. If no time period is promised, sellers must either ship the order within 30 days or send the consumer an option notice.

Public policy is the equivalent of Weber's social consensus in that it refers to the idea that certain activities affect the entire social structure and must be regulated by the government.

Samantha applied for a personal loan at a local bank in Illinois. The bank asked her to fill in an application form in which she was asked for her employment and marital status, as well as her age and her Social Security number. After reviewing her application, the bank denied her the loan because, it said, she was a 43-year-old divorcee-albeit a successful attorney-who received alimony payments and therefore, constituted a high risk. Analyze the case and Samantha's rights.

A knife made by Knife Co has a metal handle with no warning, and the manufacturer has received reports that some consumers have received electrical shocks when attempting to use the knife as a screwdriver while installing an electrical outlet. Athena is one such consumer and decides to sue the manufacturer and the seller. Which of the following is true of this situation?

Which of the following entities are allowed to send merchandise through the mail to people who did not order it?

To which type of transaction does the negative option rule apply?

Persons who receive unordered merchandise in the mail may treat it as a gift.

Cristina receives a new credit card from Seventh National Bank that does not provide a means for a retailer to verify that the holder of the card is in fact authorized to use it. The next day, Cristina discovers that she has lost her card. As soon as she discovers the card is missing, she calls Seventh National to report the loss. Already, $620 worth of unauthorized charges have been made on her credit card. Under the Truth-in-Lending Act Cristina will:

Local business activity carried on within state boundaries is known as:

The "Opening Case Round 2" involving the Federal Trade Commission and the Hobby Lobby case discussed whether the people making decisions at Hobby Lobby can benefit from corporate rights flowing to the people behind the corporate veil.

Renee applied for credit to open her own beauty salon. The bank denies her the credit after learning she was recently divorced and receives public assistance income. Which of the following federal laws did the bank violate?

Mary contracts to lease an automobile from Zippo Sales with payments of $300 per month for a year and a final balloon payment of $1,200. This final payment is:

The Equal Credit Opportunity Act makes it illegal for businesses to discriminate against credit applicants receiving public assistance income.

Justin, who is on a business trip 500 miles away from home, decides to try a "free" Internet service that requires a credit card number and ends up costing $275. Justin wants to contest this charge. Explain in detail what he should do.

David went to the store to purchase a $15 MP3 player, advertised in the paper. The salesperson was encouraged by the store not to sell that MP3 player since it created a loss for the store. Instead, the salesperson told David that although the MP3 player was on sale, it was an undesirable, bottom-of-the-line product, and that David would be much happier with an Apple iPod Nano CD player for $250. The store:

Which of the following statements holds true of the FTC's Telemarketing Sales Rules?

The annual percentage rate (APR) is calculated by consumers with tables provided by the Federal Trade Commission.

Which of the following is not a requirement for strict product liability?