Federal Laws – Flashcards
Unlock all answers in this set
Unlock answersquestion
Penny Stock Company faxes ads to Quality Personnel Corporation and other businesses without the recipients' permission. This is
answer
illegal
question
Fun-E Products, Inc., makes and sells toys. The government agency that has the authority to remove a potentially hazardous toy from the market is
answer
the Consumer Product Safety Commission
question
Special Roast Coffee, Inc., processes and sells a variety of coffee products. Special Roast's product packages must include
answer
the content's net quantity
question
Credit can be denied solely on the basis of marital status
answer
false
question
Bodie's application to City Bank for a credit card is denied. Bodie can obtain information on her credit history in a credit agency's files under
answer
the fair credit reporting act
question
Through unfair trade practices, Super Sales Company induces Trey and other consumers to enter into one-sided deals. This may be subject to sanctions under
answer
federal and state law
question
Va-Va-Voom Products, Inc., engages in deceptive advertising when it markets its product Weight-No-More as able to help consumers lose weight in their sleep. Va-Va-Voom is ordered to include in all future advertising of Weight-No-More the statement, "This product will not cause anyone to lose weight while sleeping." This is
answer
a counteradvertising order
question
Tonya and many other consumers complain to the Federal Trade Commission (FTC) that a Whoopie Wonders Company ad is deceptive. The FTC's first step is to
answer
investigate
question
Buyers of goods sold door to door can cancel their contracts within three business days
answer
false
question
A credit-cardholder is liable for all unauthorized charges made before the creditor is notified that the card has been lost
answer
false
question
Kristen receives unsolicited merchandise in the mail. Kristen
answer
may keep the merchandise without any obligation to the sender
question
Labels on fresh meat must indicate where the food originated
answer
true
question
On behalf of RiteNow Collection Agency, Sid poses as a police officer in an attempt to collect payment from Tylo for a shipment of scuba equipment that she returned to Undersea Company two months earlier. This violates
answer
the Fair Debt Collection Practices Act
question
In the ordinary course of business, Xtra Credit Company sells goods to Yvon and other consumers on credit under installment sales contracts that typically require at least one year of monthly payments. Xtra does not disclose all of the credit terms to its customers. This is most likely to result in
answer
rescission of the contracts
question
All statutes that serve to protects the interests of consumers are classified as consumer law
answer
true
question
Dita takes out a student loan from Everloan Bank. When she fails to make the scheduled payments for six months, Everloan advises her of further action that it will take. This violates
answer
no federal law
question
To generate sales, Yakkity-Yak, Inc., uses phone solicitation. Under federal law, in soliciting business, Yakkity-Yak's telemarketers must
answer
disclose all material facts related to a sale
question
Federal laws often provide more sweeping and significant protections for the consumer than state laws
answer
false
question
Labels must use words that are easily understood by the ordinary marketing executive
answer
false
question
A collection agency must include a validation notice whenever it initially contacts a debtor for payment of a debt
answer
true
question
Creditors attempting to collect debts are generally considered to be debt-collection agencies.
answer
false
question
Frosty's Appliance Store advertises freezers at a "Special Low Price of $299." When Garth tries to buy one of the freezers, Huey, the salesperson, tells him that they are all sold and no more are obtainable. Huey adds that Frosty's has other freezers for $2,299. This is
answer
bait-and-switch advertising
question
A sanction known as counteradvertising requires a company to advertise the products of its competitor to counter its own false claims.
answer
false
question
Green Grocer Corporation makes and markets a variety of processed food products. The federal agency responsible for enforcing health regulations concerning food is
answer
the Food and Drug Administration
question
Vague generalities and obvious exaggerations constitute deceptive advertising.
answer
false
question
The key federal statute regulating the credit and credit-card industries is basically a disclosure law.
answer
true
question
Ads cannot be unfair.
answer
true
question
Merchants must ship orders within the time promised in their ads.
answer
true
question
Federal laws often provide more sweeping and significant protections for the consumer than state laws.
answer
false
