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Exam 45: Consumer Law

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Question 1

Multiple Choice

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Which of the following was the result at the Supreme Court level in Food and Drug Administration v. Brown & Williamson Tobacco Corporation, the case in the text involving whether the Federal Food, Drug, and Cosmetic Act (FFDCA) authorized the Food and Drug Administration (FDA) to regulate tobacco?

A) The Court ruled that the FDA had the authority to regulate tobacco because nicotine, one of its main components, is a drug.
B) The Court ruled that the FDA had the authority to regulate tobacco because cigarettes and smokeless tobacco are drug delivery devices of the drug nicotine.
C) The Court ruled that the FDA had the authority to regulate tobacco because the FFDCA implies that the FDA retains the discretion to determine items within its sphere of regulation.
D) The Court ruled that the FDA had the authority to regulate tobacco because nicotine, one of its main components, is a drug but that the FDA exceeded the scope of its regulatory powers in the issuance of excessively strict regulations regarding the marketing of tobacco.
E) The Court ruled that the FDA lacked the authority to regulate tobacco because Congress had enacted its own legislation regulating tobacco and had not extended that right to the FDA.

F) A) and E)
G) A) and B)

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Question 2

True/False

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In Quebec all public signs and advertisements must be solely in French.

A) True
B) False

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Question 3

Multiple Choice

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Which of the following is the only authorized site for government-required free credit reports from the three major reporting agencies?

For how long does registration on the Federal Trade Commission's "Do Not Call" registry last?

Which of the following are interpretations of consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior?

Which of the following is the agency responsible for enforcing the Federal Food, Drug, and Cosmetic Act?

Which of the following is not a federal law regulating product labeling?

Which of the following conducts investigations into the safety of motor vehicles?

Under the Equal Credit Opportunity Act, creditors may require that a spouse cosign a loan application regardless of the credit worthiness of the applicant.

Which of the following is false regarding the regulation of tobacco?

Under the Equal Credit Opportunity Act, creditors may not deny credit on the basis of whether the applicant receives public assistance benefits.

"Convertibles." Barry, a new car dealer, advertised that a new brand of convertible called Wind would be available at his dealership for the price of $10,000 each. He had only three Wind vehicles, however; and when those were sold, he tried to convince shoppers to purchase a much more expensive new convertible at a price of $25,000. Kathy, a customer who decided to purchase one of the more expensive vehicles needed financing in order to do so. She had $10,000 to pay on the car and sought a loan from ABC Bank for the remainder. She wanted the loan for a specific amount of time. ABC Bank offered her the loan and she agreed. The only information she received from ABC Bank was confirmation that she borrowed $15,000 at an 8% interest rate. After receiving several complaints, the Federal Trade Commission disapproved of Barry's action in regard to the Wind vehicles. After appropriate proceedings, the Commission proceeded to issue a cease-and-desist order involving Barry's misleading advertisement in regard to Wind vehicles and also in regard to any other vehicles he offered for sale. -Which of the following terms references the cease-and-desist order entered by the Federal Trade Commission involving not only Barry's sales of Wind, but also his sales of all other vehicles?

Which of the following governs the issuance of credit reports?

Which of the following is not expressly prohibited by the Fair Debt Collection Practices Act?

Which of the following is true regarding the obligation, if any, of a consumer who discovers that a company has sent the consumer unsolicited merchandise through the U.S. mail?

Major credit reporting agencies are now required to provide consumers with a free copy of their credit reports every ____.

Which of the following was the first federal legislation passed regulating food and drugs?

"Miracle Pill." Katie advertised that she had developed a pill for women that would result in weight loss, wrinkle loss, and improved vitality; and that for men would result in all those things plus hair growth. Her television advertisement showed miracle results allegedly obtained by consumers. Katie cautioned, however, that ingestion of the pill for six months was required before results would be evident. The pill was wildly popular. The Federal Trade Commission, however, investigated and determined that Katie had failed to have a reasonable basis for the claims she made in advertisements. Katie claimed that she was merely involved in the use of generalities and clear exaggerations. The Commission disagreed and issued a formal administrative complaint against her. After a hearing, an order was issued requiring that Katie stop advertising and selling the pills. After losing all appeals, Katie continued selling the pills until she was fined by the Federal Trade Commission. She has since left the country and cannot be located. -Which of the following is a term for Katie's defense involving generalities and clear exaggerations allowable by law?

If a person notifies the credit card company of a stolen card before unauthorized charges are made, for how much can the person be held liable to the credit card company?

"Convertibles." Barry, a new car dealer, advertised that a new brand of convertible called Wind would be available at his dealership for the price of $10,000 each. He had only three Wind vehicles, however; and when those were sold, he tried to convince shoppers to purchase a much more expensive new convertible at a price of $25,000. Kathy, a customer who decided to purchase one of the more expensive vehicles needed financing in order to do so. She had $10,000 to pay on the car and sought a loan from ABC Bank for the remainder. She wanted the loan for a specific amount of time. ABC Bank offered her the loan and she agreed. The only information she received from ABC Bank was confirmation that she borrowed $15,000 at an 8% interest rate. After receiving several complaints, the Federal Trade Commission disapproved of Barry's action in regard to the Wind vehicles. After appropriate proceedings, the Commission proceeded to issue a cease-and-desist order involving Barry's misleading advertisement in regard to Wind vehicles and also in regard to any other vehicles he offered for sale. -What type of loan was Kathy seeking from ABC Bank?