BL3335 Unit 14 Admin & Consumer - Assignment Essays %

question

Administrative Agency

answer

a federal or state government agency created by the legislature to perform a specific function, such as to make and enforce rules pertaining to the evironment.

question

Enabling Legislation

answer

a statute enacted by Congress that authorizes the creation of an administrative agency and specifies the name, composition, purpose, and powers of the agency.

question

Legislative Rule

answer

an administrative agency rule that carries the same weight as a congressionally enacted statute.

question

Interpretative Rule

answer

a nonbinding rule or policy statement issued by an administrative agency that explains how it interprets and intends to apply the statutes it enforces.

question

Delegation Doctrine

answer

a doctrine that allows Congress to delegate some of its power to make and implement laws to administrative agencies.

question

Bureaucracy

answer

a large organization that is structured hierarchically to carry out specific functions.

question

Exhaustion Doctrine

answer

the principle that a complaining party normally must have exhausted all available administrative remedies before seeking judicial review.

question

Administrative Process

answer

the procedure used by administrative agencies in fulfilling their 3 basic functions: rulemaking, enforcement, and adjudication.

question

Rulemaking

answer

the process by which an administrative agency formally adopts a new regulation or amends an old one.

question

Administrative Law Judge (ALJ)

answer

one who presides over an administrative agency hearing and has the power to administer oaths, take testimony, rule on questions of evidence, and make determinations of fact.

question

Consumer Law

answer

the body of statutes, agency rules, and judicial decisions protecting consumers of goods and services from dangerous manufacturing techniques, mislabeling, unfair credit practices, deceptive advertising, and other such practices.

question

Deceptive Advertising

answer

advertising that misleads consumers, either by making unjustified claims about a product's performance or by omitting a material fact concerning the product's composition or performance.

question

Bait-and-Switch Advertising

answer

advertising a product at an attractive price and then telling the consumer that the advertised product is not available or is of poor quality and encouraging him/her to purchase a more expensive item.

question

Cease-and-Desist Order

answer

an administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal.

question

Counteradvertising:

answer

new advertising that is undertaken to correct earlier false claims that were made about a product.

question

Multiple Product Order

answer

an order requiring a firm that has engaged in deceptive advertising to cease and desist from false advertising in regard to all the firm's products.

question

The Telephone Consumer Protection Act (TCPA)

answer

prohibits telephone solicitation using an automatic telephone dialing system or a prerecorded voice.

question

The TCPA makes it illegal to:

answer

transmit unsolicited advertisements without the sender having an established business relationship with the recipient or first obtaining the recipient's permission.

question

"Cooling-off" Laws

answer

laws that allow buyers of goods sold in certain transactions to cancel their contracts within 3 business days.

question

Energy Policy and Conservation Act (ECPA)

answer

requires automakers to attach to every new car an information label that includes the EPA's fuel economy estimate for the vehicle.

question

Regulation Z

answer

a set of rules issued by the Federal Reserve Board of Governors to implement the provisions of the Truth-in-Lending Act.

question

T/F
The body of administrative law consists of rules covering almost every aspect of a business's operations.

answer

True

question

When Congress (or state) enacts legislation, it adopts a general statute and leaves its implementation to an _____.

answer

administrative agency

question

T/F
Federal agency regulations take precedence over conflicting state regulations.

answer

True

question

T/F
State agencies are commonly created as a parallel to a federal agency.

answer

True

question

Legislation and regulations have significant benefits that entail considerable _____ for business.

answer

costs

question

Congress passes _____ to create an administrative agency.

answer

enabling legislation

question

T/F
Federal administrative agencies can exercise only those powers that Congress has delegated to them in enabling legislation.

answer

True

question

An agency's enabling statute defines its _____.

answer

legal authority

question

An agency:

answer

- Cannot regulate beyond the powers granted by the statute.
- May be required to take some regulatory action by the terms of that statute.

question

The Federal Trade Commission Act prohibits:

answer

unfair methods of competition and deceptive trade practices.

question

Federal Trade Commission Act

answer

describes the procedures that the FTC must follow to charge people or organizations with violations of agency orders.

question

The Federal Trade Commission Act provides:

answer

for judicial review of agency orders.

question

T/F
The commission that heads the FTC is composed of 5 members.

answer

True

question

The _____, with the advice and consent of the Senate, appoints each of the FTC commissioners for a term of 7 years, along with the chair.

answer

president

question

2 Types of Administrative Agencies:

answer

1) Executive agencies
2) Independent regulatory agencies

question

Federal Executive Agencies

answer

include the cabinet departments of the executive branch and the subagencies within them.

question

Executive agencies usually have a single administrator, director, or secretary who is appointed by the president to oversee the agency and can be removed by the _____ at any time.

answer

president

question

Independent regulatory agencies are outside the _____ departments.

answer

federal executive

question

The president's power is less pronounced in regard to _____ agencies, whose officers serve for fixed terms & cannot be removed without just cause.

answer

independent

question

Agencies' powers include functions associated with:

answer

- the legislature (rulemaking)
- the executive branch (enforcement)
- the courts (adjudication)

question

Although the Constitution only authorizes the legislative branch to create laws, administrative agencies can make _____.

answer

legislative rules

question

The _____ is considered to be proper as long as Congress sets standards outlining the scope of the agency's authority.

answer

delegation

question

Administrative agencies, which constitute the bureaucracy, are sometimes referred to as _____.

answer

the fourth branch of the U.S. government

question

The executive branch exercises control over agencies through:

answer

- president's power to appoint federal officers
- president's power to veto

question

T/F
The president may veto enabling legislation passed by Congress or congressional attempts to modify an existing agency's authority.

answer

True

question

The Administrative Procedure Act (APA) provides for _____ of most agency decisions.

answer

judicial review

question

Agency actions are not automatically subject to _____.

answer

judicial review

question

T/F
The party seeking court review must first exhaust all administrative remedies before seeking court review.

answer

True

question

In the absence of any directives from Congress concerning a particular agency procedure, the _____ applies.

answer

APA

question

The APA includes requirements concerning _____ that regulatory agencies must give to those affected.

answer

fair notice

question

The Arbitrary and Capricious Test

answer

Under this standard, parties can challenge regulations as contrary to law or as so irrational that they are arbitrary and capricious.

question

T/F
There is no precise definition of what makes a rule arbitrary and capricious.

answer

True

question

Regulations are sometimes said to be legislative because, like statutes, they have a _____.

answer

binding effect

question

An inspection or test is used in place of a _____ to show the need to correct or prevent an undesirable condition.

answer

formal hearing

question

Administrative inspections and tests include:

answer

- Safety inspections of underground coal mines.
- Safety tests of commercial equipment & cars.
- Environmental monitoring of factory emissions.

question

Most administrative actions are resolved through _____ at their initial stages.

answer

negotiated settlements

question

Adjudication

answer

the process of resolving a dispute by presenting evidence and arguments before a neutral 3rd party decision maker in a court or an administrative law proceeding.

question

The purpose of negotiations is to:

answer

rectify the problem to the agency's satisfaction and eliminate the need for additional proceedings.

question

Settlement are appealing to firms for 2 reasons:

answer

1) To avoid appearing uncooperative
2) To avoid the expense involved in formal adjudication proceedings & in later appeals.

question

If a settlement cannot be reached, the agency may issue a _____ against the suspected violator.

answer

formal complaint

question

APA requires before a hearing, the agency issue a notice that includes:

answer

1) Facts & law on which the complaint is based.
2) Legal authority for the hearing
3) Time & place

question

T/F
Courts tend to accept the agency's judgment when reviewing agency decisions.

answer

True

question

The EPA has interpreted the phrase "stationary source" in the Clean Air Act as:

answer

referring to an entire manufacturing plant, not to each facility within a plant.

question

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.

answer

issue - whether the courts should defer to an agency's interpretation of a statute giving it authority to act.

question

T/F
When the meaning of a particular statute's language is unclear, and an agency interprets it, the court must follow the agency's interpretation as long as it is reasonable.

answer

True

question

T/F
State consumer protection laws often provide more significant protections than federal laws.

answer

True

question

The goal of the FTC is to:

answer

prevent unfair and deceptive trade practices, including deceptive advertising.

question

T/F
Vague generalities and obvious exaggerations (puffery) are permissible.

answer

True

question

Advertising that appears based on factual evidence but is not reasonably supported by evidence is deemed _____.

answer

deceptive

question

Some advertisements contain _____, meaning the presented information is true but _____ and may lead consumers to a false conclusion.

answer

"half-truths"; incomplete

question

If the FTC concludes that an advertisement is unfair or deceptive, it drafts a _____, which is sent to the alleged offender.

answer

formal complaint

question

If the FTC succeeds in proving an advertisement is unfair, it will:

answer

- issue a cease-and-desist order
- impose a counteradvertising sanction
- institute a multiple product order

question

T/F
The FTC may seek other remedies, including damages and restitution.

answer

True

question

Lanham Act

answer

- Protects trademarks
- Covers false advertising claims

question

To state a successful claim under the Lanham Act, a business must establish:

answer

1) An injury to a commercial interest in reputation or sales
2) Direct causation of the injury by false or deceptive advertising
3) A loss of business from buyers who were deceived by the advertising

question

Recovery under a state law requires proof of:

answer

1) Defendant committed a deceptive or unfair act
2) Act was committed in the course of trade or commerce
3) Defendant intended that other rely on the deception
4) Plaintiff suffered actual damages proximately caused by the deception

question

Congress has passed laws to protect consumers against other marketing practices including:

answer

telephone solicitation & fraudulent telemarketing

question

The TCPA is enforced by the _____.

answer

Federal Communications Commission (FCC)

question

The _____ imposes substantial fines on companies that violate provisions of the TCPA.

answer

FCC

question

If a court finds that a defendant willfully or knowingly violated the TCPA, the court has the discretion to _____ the amount of damages awarded.

answer

treble (triple)

question

The FTC's Telemarketing Sales Rule (TSR)

answer

- Makes it illegal for telemarketers to misrepresent information or facts about their goods or services.
- Requires a telemarketer to remove a consumer's name from its list of potential contacts if the customer so requests.

question

The FTC's Telemarking Sales Rule (TSR) requires a telemarketer to:

answer

- Identify the seller's name
- Describe the product being sold
- Disclose all material facts related to the sale (total cost)

question

An amendment to the TSR established the national _____.

answer

Do Not Call Registry

question

According to the FTC Mail, Internet, or Telephone Order Merchandise Rule, merchants are required to:

answer

- ship orders within the time promised in their ads
- notify consumers when orders cannot be shipped on time
- issue a refund within a specified period of time once an order is canceled.

question

T/F
If a seller does not give an estimated shipping time, it must shop within 30 days.

answer

True

question

Labels must:

answer

- be accurate
- use words that are easily understood by the ordinary consumer
- specify the raw materials used (sometimes)
- carry a warning (sometimes)

question

The Fair Packaging & Labeling Act requires that food product labels identify:

answer

- product
- net quantity of contents
- manufacturer
- packager or distributor

question

The FPLA includes additional requirements concerning:

answer

- descriptions on packages
- savings claims
- components of nonfood products
- standards for the partial filling of packages

question

Food products must bear labels detailing the nutritional content, including:

answer

- # of calories
- amounts of various nutrients

question

The Nutrition Labeling & Education Act

answer

- requires food labels to provide standard nutrition facts
- regulates the use of such terms as "fresh" and "low fat"

question

The primary agencies that issue regulations on food labeling are the _____ and the _____.

answer

FDA; USDA

question

The Affordable Care Act (Obamacare) included provisions aimed at combating _____ in the United States.

answer

obesity

question

T/F
All restaurant chains with 20+ locations are required to post the caloric content of the foods on their menu.

answer

True

question

T/F
The federal law on menu labeling supersedes all previous state and local laws.

answer

True

question

Laws that regulate the actual products made available to consumers include the _____ and the _____.

answer

Federal Food, Drug, & Cosmetic Act; Consumer Product Safety Act

question

T/F
The most important federal legislation regulating food and drugs is the FDCA.

answer

True

question

Congress enacted the Food Safety Modernization Act (FSMA) to:

answer

provide greater government control over the U.S. food safety system.

question

The FSMA:

answer

gives the FDA authority to directly recall any food products that it suspects are tainted, rather than relying on the producers to recall items.

question

The FSMA requires:

answer

anyone who manufactures, processes, packs, distributes, receives, holds, or imports food products to pay a fee & register with the U.S. Dept of Health & Human Services.

question

T/F
The FSMA places additional restrictions on importers of food & requires them to verify that imported foods mean U.S. safety standards.

answer

True

question

T/F
The FDA is responsible for ensuring that drugs are safe and effective before they are marketed to the public.

answer

True

question

The Consumer Product Safety Act:

answer

- Created a comprehensive regulatory scheme over consumer safety matters.
- Established the CPSC.

question

The Consumer Product Safety Commission (CPSC):

answer

conducts research on the safety of individual consumer products and maintains a clearinghouse on the risks associated with various products.

question

The Consumer Product Safety Act requires distributors to notify the CPSC immediately if they receive information that a product:

answer

"contains a defect which creates a substantial risk to the public" or "an unreasonable risk of serious injury or death".

question

_____ is one of the more important aspects of consumer protection legislation.

answer

Credit protection

question

Consumer Financial Protection Bureau (CFPB)

answer

the agency that oversees the credit practices of banks, mortgage lenders, and credit-card companies.

question

Truth-in-Lending Act (TILA)

answer

requires sellers and lenders to disclose credit & loan terms so that individuals can shop around for the best financing arrangements.

question

T/F
TILA requirements apply only to those who lend funds, sell on credit, or arrange for the extension of credit.

answer

True

question

T/F
Sales or loans made between 2 consumers do not come under the protection of TILA.

answer

True

question

T/F
TILA - the law protects only debtors who are natural people (not artificial "person" of a corporation).

answer

True

question

TILA does not extend to other _____ entities.

answer

legal

question

Transactions Subject to Regulation Z:

answer

- Installment loans
- Retail & installment sales
- Car loans
- Home-improvement loans
- Certain real estate loans if the amount of financing is > $25,000.

question

A lender must disclose:

answer

- APR (%)
- Finance charge
- Amount financed
- Total payments

question

If a creditor fails to follow the exact procedures required by TILA, the creditor risks _____ under the act.

answer

contract rescission

question

T/F
The Equal Credit Opportunity Act (ECOA) amended the TILA.

answer

True

question

The ECOA prohibits the denial of credit solely on the basis of:

answer

race, religion, national origin, color, gender, marital status, age

question

T/F
The ECOA prohibits credit discrimination on the basis of whether an individual receives certain forms of income, such as public assistance benefits.

answer

True

question

Under the ECOA, a creditor may _____ a cosigner on a credit instrument if the applicant qualifies under the creditor's standards of creditworthiness for the amount and terms of the credit request.

answer

not require

question

Fair Credit Reporting Act (FCRA)

answer

protects consumers against inaccurate credit reporting and requires that lenders and other creditors report correct, relevant, and up-to-date information.

question

Legitimate purposes for issuing credit reports include:

answer

extending credit, issuing insurance policies, responding to the consumer's request

question

T/F
Any time a consumer is denied credit or insurance on the basis of his/her credit report, the consumer must be notified.

answer

True

question

Credit or insurance denial notices must include the _____ and _____ of the credit reporting agency that issued the report.

answer

name; address

question

A credit reporting agency that fails to comply with the act is liable for:

answer

- actual damages
- additional damages not to exceed $1,000
- attorneys' fees

question

_____ and other companies that use information from credit reporting agencies may also be liable for violation of the FCRA.

answer

Creditors

question

Fair and Accurate Credit Transaction Act (FACTA)

answer

established a national fraud alert system

question

FACTA requires:

answer

-Major credit reporting agencies to provide consumers with free copies of their own credit reports every 12 months.
- Account numbers on credit-card receipts to be truncated.

question

Fair Debt Collection Practices Act (FDCPA)

answer

attempts to curb perceived abuses by collection agencies.

question

T/F
The FDCPA applied only to specialized debt-collection agencies & attorneys who regularly attempt to collect debts on behalf of someone else.

answer

True

question

T/F
Creditors attempting to collect debts are not covered by the act unless they cause debtors to believe they are the agencies.

answer

True

question

Validation Notice

answer

an initial notice to a debtor from a collection agency informing the debtor that he/she has 30 days to challenge the debt and request verification.

question

The FDCPA requires a collection agency to include a _____ when initially contacting a debtor for payment of a debt or within 5 days of initial contact.

answer

validation notice

question

T/F
The FTC is primarily responsible for enforcing the FDCPA.

answer

True

question

Debt collectors who violate the act are exempt from liability if they can show that the violation was not _____ and resulted from a bona fide error.

answer

intentional

1 of 134

question

Administrative Agency

answer

a federal or state government agency created by the legislature to perform a specific function, such as to make and enforce rules pertaining to the evironment.

question

Enabling Legislation

answer

a statute enacted by Congress that authorizes the creation of an administrative agency and specifies the name, composition, purpose, and powers of the agency.

question

Legislative Rule

answer

an administrative agency rule that carries the same weight as a congressionally enacted statute.

question

Interpretative Rule

answer

a nonbinding rule or policy statement issued by an administrative agency that explains how it interprets and intends to apply the statutes it enforces.

question

Delegation Doctrine

answer

a doctrine that allows Congress to delegate some of its power to make and implement laws to administrative agencies.

question

Bureaucracy

answer

a large organization that is structured hierarchically to carry out specific functions.

question

Exhaustion Doctrine

answer

the principle that a complaining party normally must have exhausted all available administrative remedies before seeking judicial review.

question

Administrative Process

answer

the procedure used by administrative agencies in fulfilling their 3 basic functions: rulemaking, enforcement, and adjudication.

question

Rulemaking

answer

the process by which an administrative agency formally adopts a new regulation or amends an old one.

question

Administrative Law Judge (ALJ)

answer

one who presides over an administrative agency hearing and has the power to administer oaths, take testimony, rule on questions of evidence, and make determinations of fact.

question

Consumer Law

answer

question

Deceptive Advertising

answer

advertising that misleads consumers, either by making unjustified claims about a product's performance or by omitting a material fact concerning the product's composition or performance.

question

Bait-and-Switch Advertising

answer

question

Cease-and-Desist Order

answer

an administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal.

question

Counteradvertising:

answer

new advertising that is undertaken to correct earlier false claims that were made about a product.

question

Multiple Product Order

answer

an order requiring a firm that has engaged in deceptive advertising to cease and desist from false advertising in regard to all the firm's products.

question

The Telephone Consumer Protection Act (TCPA)

answer

prohibits telephone solicitation using an automatic telephone dialing system or a prerecorded voice.

question

The TCPA makes it illegal to:

answer

transmit unsolicited advertisements without the sender having an established business relationship with the recipient or first obtaining the recipient's permission.

question

"Cooling-off" Laws

answer

laws that allow buyers of goods sold in certain transactions to cancel their contracts within 3 business days.

question

Energy Policy and Conservation Act (ECPA)

answer

requires automakers to attach to every new car an information label that includes the EPA's fuel economy estimate for the vehicle.

question

Regulation Z

answer

a set of rules issued by the Federal Reserve Board of Governors to implement the provisions of the Truth-in-Lending Act.

question

T/F
The body of administrative law consists of rules covering almost every aspect of a business's operations.

answer

True

question

When Congress (or state) enacts legislation, it adopts a general statute and leaves its implementation to an _____.

answer

administrative agency

question

T/F
Federal agency regulations take precedence over conflicting state regulations.

answer

True

question

T/F
State agencies are commonly created as a parallel to a federal agency.

answer

True

question

Legislation and regulations have significant benefits that entail considerable _____ for business.

answer

costs

question

Congress passes _____ to create an administrative agency.

answer

enabling legislation

question

T/F
Federal administrative agencies can exercise only those powers that Congress has delegated to them in enabling legislation.

answer

True

question

An agency's enabling statute defines its _____.

answer

legal authority

question

An agency:

answer

- Cannot regulate beyond the powers granted by the statute.
- May be required to take some regulatory action by the terms of that statute.

question

The Federal Trade Commission Act prohibits:

answer

unfair methods of competition and deceptive trade practices.

question

Federal Trade Commission Act

answer

describes the procedures that the FTC must follow to charge people or organizations with violations of agency orders.

question

The Federal Trade Commission Act provides:

answer

for judicial review of agency orders.

question

T/F
The commission that heads the FTC is composed of 5 members.

answer

True

question

The _____, with the advice and consent of the Senate, appoints each of the FTC commissioners for a term of 7 years, along with the chair.

answer

president

question

2 Types of Administrative Agencies:

answer

1) Executive agencies
2) Independent regulatory agencies

question

Federal Executive Agencies

answer

include the cabinet departments of the executive branch and the subagencies within them.

question

Executive agencies usually have a single administrator, director, or secretary who is appointed by the president to oversee the agency and can be removed by the _____ at any time.

answer

president

question

Independent regulatory agencies are outside the _____ departments.

answer

federal executive

question

The president's power is less pronounced in regard to _____ agencies, whose officers serve for fixed terms & cannot be removed without just cause.

answer

independent

question

Agencies' powers include functions associated with:

answer

- the legislature (rulemaking)
- the executive branch (enforcement)
- the courts (adjudication)

question

Although the Constitution only authorizes the legislative branch to create laws, administrative agencies can make _____.

answer

legislative rules

question

The _____ is considered to be proper as long as Congress sets standards outlining the scope of the agency's authority.

answer

delegation

question

Administrative agencies, which constitute the bureaucracy, are sometimes referred to as _____.

answer

the fourth branch of the U.S. government

question

The executive branch exercises control over agencies through:

answer

- president's power to appoint federal officers
- president's power to veto

question

T/F
The president may veto enabling legislation passed by Congress or congressional attempts to modify an existing agency's authority.

answer

True

question

The Administrative Procedure Act (APA) provides for _____ of most agency decisions.

answer

judicial review

question

Agency actions are not automatically subject to _____.

answer

judicial review

question

T/F
The party seeking court review must first exhaust all administrative remedies before seeking court review.

answer

True

question

In the absence of any directives from Congress concerning a particular agency procedure, the _____ applies.

answer

APA

question

The APA includes requirements concerning _____ that regulatory agencies must give to those affected.

answer

fair notice

question

The Arbitrary and Capricious Test

answer

Under this standard, parties can challenge regulations as contrary to law or as so irrational that they are arbitrary and capricious.

question

T/F
There is no precise definition of what makes a rule arbitrary and capricious.

answer

True

question

Regulations are sometimes said to be legislative because, like statutes, they have a _____.

answer

binding effect

question

An inspection or test is used in place of a _____ to show the need to correct or prevent an undesirable condition.

answer

formal hearing

question

Administrative inspections and tests include:

answer

- Safety inspections of underground coal mines.
- Safety tests of commercial equipment & cars.
- Environmental monitoring of factory emissions.

question

Most administrative actions are resolved through _____ at their initial stages.

answer

negotiated settlements

question

Adjudication

answer

the process of resolving a dispute by presenting evidence and arguments before a neutral 3rd party decision maker in a court or an administrative law proceeding.

question

The purpose of negotiations is to:

answer

rectify the problem to the agency's satisfaction and eliminate the need for additional proceedings.

question

Settlement are appealing to firms for 2 reasons:

answer

1) To avoid appearing uncooperative
2) To avoid the expense involved in formal adjudication proceedings & in later appeals.

question

If a settlement cannot be reached, the agency may issue a _____ against the suspected violator.

answer

formal complaint

question

APA requires before a hearing, the agency issue a notice that includes:

answer

1) Facts & law on which the complaint is based.
2) Legal authority for the hearing
3) Time & place

question

T/F
Courts tend to accept the agency's judgment when reviewing agency decisions.

answer

True

question

The EPA has interpreted the phrase "stationary source" in the Clean Air Act as:

answer

referring to an entire manufacturing plant, not to each facility within a plant.

question

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.

answer

issue - whether the courts should defer to an agency's interpretation of a statute giving it authority to act.

question

T/F
When the meaning of a particular statute's language is unclear, and an agency interprets it, the court must follow the agency's interpretation as long as it is reasonable.

answer

True

question

T/F
State consumer protection laws often provide more significant protections than federal laws.

answer

True

question

The goal of the FTC is to:

answer

prevent unfair and deceptive trade practices, including deceptive advertising.

question

T/F
Vague generalities and obvious exaggerations (puffery) are permissible.

answer

True

question

Advertising that appears based on factual evidence but is not reasonably supported by evidence is deemed _____.

answer

deceptive

question

Some advertisements contain _____, meaning the presented information is true but _____ and may lead consumers to a false conclusion.

answer

"half-truths"; incomplete

question

If the FTC concludes that an advertisement is unfair or deceptive, it drafts a _____, which is sent to the alleged offender.

answer

formal complaint

question

If the FTC succeeds in proving an advertisement is unfair, it will:

answer

- issue a cease-and-desist order
- impose a counteradvertising sanction
- institute a multiple product order

question

T/F
The FTC may seek other remedies, including damages and restitution.

answer

True

question

Lanham Act

answer

- Protects trademarks
- Covers false advertising claims

question

To state a successful claim under the Lanham Act, a business must establish:

answer

1) An injury to a commercial interest in reputation or sales
2) Direct causation of the injury by false or deceptive advertising
3) A loss of business from buyers who were deceived by the advertising

question

Recovery under a state law requires proof of:

answer

question

Congress has passed laws to protect consumers against other marketing practices including:

answer

telephone solicitation & fraudulent telemarketing

question

The TCPA is enforced by the _____.

answer

Federal Communications Commission (FCC)

question

The _____ imposes substantial fines on companies that violate provisions of the TCPA.

answer

FCC

question

If a court finds that a defendant willfully or knowingly violated the TCPA, the court has the discretion to _____ the amount of damages awarded.

answer

treble (triple)

question

The FTC's Telemarketing Sales Rule (TSR)

answer

question

The FTC's Telemarking Sales Rule (TSR) requires a telemarketer to:

answer

- Identify the seller's name
- Describe the product being sold
- Disclose all material facts related to the sale (total cost)

question

An amendment to the TSR established the national _____.

answer

Do Not Call Registry

question

According to the FTC Mail, Internet, or Telephone Order Merchandise Rule, merchants are required to:

answer

- ship orders within the time promised in their ads
- notify consumers when orders cannot be shipped on time
- issue a refund within a specified period of time once an order is canceled.

question

T/F
If a seller does not give an estimated shipping time, it must shop within 30 days.

answer

True

question

Labels must:

answer

- be accurate
- use words that are easily understood by the ordinary consumer
- specify the raw materials used (sometimes)
- carry a warning (sometimes)

question

The Fair Packaging & Labeling Act requires that food product labels identify:

answer

- product
- net quantity of contents
- manufacturer
- packager or distributor

question

The FPLA includes additional requirements concerning:

answer

- descriptions on packages
- savings claims
- components of nonfood products
- standards for the partial filling of packages

question

Food products must bear labels detailing the nutritional content, including:

answer

- # of calories
- amounts of various nutrients

question

The Nutrition Labeling & Education Act

answer

- requires food labels to provide standard nutrition facts
- regulates the use of such terms as "fresh" and "low fat"

question

The primary agencies that issue regulations on food labeling are the _____ and the _____.

answer

FDA; USDA

question

The Affordable Care Act (Obamacare) included provisions aimed at combating _____ in the United States.

answer

obesity

question

T/F
All restaurant chains with 20+ locations are required to post the caloric content of the foods on their menu.

answer

True

question

T/F
The federal law on menu labeling supersedes all previous state and local laws.

answer

True

question

Laws that regulate the actual products made available to consumers include the _____ and the _____.

answer

Federal Food, Drug, & Cosmetic Act; Consumer Product Safety Act

question

T/F
The most important federal legislation regulating food and drugs is the FDCA.

answer

True

question

Congress enacted the Food Safety Modernization Act (FSMA) to:

answer

provide greater government control over the U.S. food safety system.

question

The FSMA:

answer

gives the FDA authority to directly recall any food products that it suspects are tainted, rather than relying on the producers to recall items.

question

The FSMA requires:

answer

anyone who manufactures, processes, packs, distributes, receives, holds, or imports food products to pay a fee & register with the U.S. Dept of Health & Human Services.

question

T/F
The FSMA places additional restrictions on importers of food & requires them to verify that imported foods mean U.S. safety standards.

answer

True

question

T/F
The FDA is responsible for ensuring that drugs are safe and effective before they are marketed to the public.

answer

True

question

The Consumer Product Safety Act:

answer

- Created a comprehensive regulatory scheme over consumer safety matters.
- Established the CPSC.

question

The Consumer Product Safety Commission (CPSC):

answer

conducts research on the safety of individual consumer products and maintains a clearinghouse on the risks associated with various products.

question

The Consumer Product Safety Act requires distributors to notify the CPSC immediately if they receive information that a product:

answer

"contains a defect which creates a substantial risk to the public" or "an unreasonable risk of serious injury or death".

question

_____ is one of the more important aspects of consumer protection legislation.

answer

Credit protection

question

Consumer Financial Protection Bureau (CFPB)

answer

the agency that oversees the credit practices of banks, mortgage lenders, and credit-card companies.

question

Truth-in-Lending Act (TILA)

answer

requires sellers and lenders to disclose credit & loan terms so that individuals can shop around for the best financing arrangements.

question

T/F
TILA requirements apply only to those who lend funds, sell on credit, or arrange for the extension of credit.

answer

True

question

T/F
Sales or loans made between 2 consumers do not come under the protection of TILA.

answer

True

question

T/F
TILA - the law protects only debtors who are natural people (not artificial "person" of a corporation).

answer

True

question

TILA does not extend to other _____ entities.

answer

legal

question

Transactions Subject to Regulation Z:

answer

- Installment loans
- Retail & installment sales
- Car loans
- Home-improvement loans
- Certain real estate loans if the amount of financing is > $25,000.

question

A lender must disclose:

answer

- APR (%)
- Finance charge
- Amount financed
- Total payments

question

If a creditor fails to follow the exact procedures required by TILA, the creditor risks _____ under the act.

answer

contract rescission

question

T/F
The Equal Credit Opportunity Act (ECOA) amended the TILA.

answer

True

question

The ECOA prohibits the denial of credit solely on the basis of:

answer

race, religion, national origin, color, gender, marital status, age

question

T/F
The ECOA prohibits credit discrimination on the basis of whether an individual receives certain forms of income, such as public assistance benefits.

answer

True

question

Under the ECOA, a creditor may _____ a cosigner on a credit instrument if the applicant qualifies under the creditor's standards of creditworthiness for the amount and terms of the credit request.

answer

not require

question

Fair Credit Reporting Act (FCRA)

answer

protects consumers against inaccurate credit reporting and requires that lenders and other creditors report correct, relevant, and up-to-date information.

question

Legitimate purposes for issuing credit reports include:

answer

extending credit, issuing insurance policies, responding to the consumer's request

question

T/F
Any time a consumer is denied credit or insurance on the basis of his/her credit report, the consumer must be notified.

answer

True

question

Credit or insurance denial notices must include the _____ and _____ of the credit reporting agency that issued the report.

answer

name; address

question

A credit reporting agency that fails to comply with the act is liable for:

answer

- actual damages
- additional damages not to exceed $1,000
- attorneys' fees

question

_____ and other companies that use information from credit reporting agencies may also be liable for violation of the FCRA.

answer

Creditors

question

Fair and Accurate Credit Transaction Act (FACTA)

answer

established a national fraud alert system

question

FACTA requires:

answer

-Major credit reporting agencies to provide consumers with free copies of their own credit reports every 12 months.
- Account numbers on credit-card receipts to be truncated.

question

Fair Debt Collection Practices Act (FDCPA)

answer

attempts to curb perceived abuses by collection agencies.

question

T/F
The FDCPA applied only to specialized debt-collection agencies & attorneys who regularly attempt to collect debts on behalf of someone else.

answer

True

question

T/F
Creditors attempting to collect debts are not covered by the act unless they cause debtors to believe they are the agencies.

answer

True

question

Validation Notice

answer

an initial notice to a debtor from a collection agency informing the debtor that he/she has 30 days to challenge the debt and request verification.

question

The FDCPA requires a collection agency to include a _____ when initially contacting a debtor for payment of a debt or within 5 days of initial contact.

answer

validation notice

question

T/F
The FTC is primarily responsible for enforcing the FDCPA.

answer

True

question

Debt collectors who violate the act are exempt from liability if they can show that the violation was not _____ and resulted from a bona fide error.

answer

intentional

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