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Exam 45: Consumer Law

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Question 21

Multiple Choice

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Which of the following does the Federal Trade Commission require if a company wishes to claim that its products are "Made in the U.S.A."?

A) That the claim not be used unless all, or virtually all, of the product's components and labor are of U.S. origin.
B) That the claim not be used unless absolutely all of the components and labor of the product are of U.S. origin.
C) That the claim not be used unless at least 75% of the product's components and labor are of U.S. origin.
D) That the claim not be used unless at least 50% of the product's components and labor are of U.S. origin.
E) That the claim not be used unless at least 55% of the product's labor and components are from Canada, Mexico, or the United States.

F) A) and D)
G) A) and C)

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Question 22

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How does NAFTA define "Made in the U.S.A."?

A) As a product for which at least 55 percent of the labor and components are from Canada, Mexico, or the United States.
B) As a product for which "all or virtually all" of the components and labor are of U.S. origin.
C) As a product for which at least 50 percent of the components and labor are of U.S. origin.
D) As a product for which at least 75 percent of the components and labor are of U.S. origin.
E) As a product for which at least 75 percent of the components and labor are of from Canada, Mexico, or the United States.

F) C) and D)
G) A) and D)

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Question 23

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Which of the following is the term used for the requirement of the Federal Trade Commission that advertisers have a reasonable basis for claims made in advertisements?

"The Burial Emporium." Fred operates a funeral home called Fred's Burial Emporium. Fred likes to keep things simple. He generally has one flat price with no itemization and requires that customers purchase a complete package from him if they want any services whatsoever. Fred also goes door-to-door selling funeral packages. He tries to visit neighborhoods in which there has been a recent death because residents in the neighborhood will have final arrangements on their minds. He believes and informs customers that once customers sign a contract for burial services, there is no backing out. Fred also obtains a good deal of business from phone solicitation. He enjoys calling late at night, between 10 p.m. and 11 p.m., when people are tired, but before they go to bed. He believes that if people do not feel well, they are more likely to consider funeral arrangements. Sometimes, Fred varies his sales tactic and tells consumers he talks to on the phone aspects of the total cost in small increments, not mentioning the total price, believing that if they are tired, they are less likely to ask too many questions. After some pesky consumer complaints, the Federal Trade Commission and other federal agencies investigate Fred. He hires a good lawyer with his profits in an attempt to stay out of trouble. -Which of the following is true regarding Fred's door-to-door solicitation and his practice of informing customers that there is no backing out of contracts entered into for funeral services?

Which of the following was the result on appeal in Gotlin v. Lederman, the case in the text involving whether the defendants misrepresented the effectiveness of a particular form of cancer treatment, Fractionated Stereotactic Radiosurgery (FSR) , in violation of New York's consumer protection law?

Which of the following is false regarding the Consumer Product Safety Act?

If a credit card company sends a person an unsolicited card in the mail and the card is stolen, for how much can the person be held liable to the credit card company?

Mona markets a bell that she claims will automatically quiet a crying baby. Mona advertises on television that the bell has a certain tone that babies love and shows a baby suddenly stop crying when the bell is rung. She charges $50 for each bell for which she incurs $1 in manufacturing charges. The bell was very popular for a few months, but she has started to get complaints; and the Federal Trade Commission has investigated her advertisement regarding the bell. Mona claims that her advertisement is not deceptive. The Federal Trade Commission, however, claims that her advertisement satisfies the three elements necessary for a deceptive claim. What are those three elements?

Which of the following was passed in response to the growing number of identity theft cases?

"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 the term for the order issued by the Federal Trade Commission ordering that Katie stop advertising and selling the pills?

To which of the following loans does the Truth-in Lending Act apply?

A consumer law is a statute or administrative rule serving to protect consumer interests.

If a person believes that she is a victim of identity theft, she may contact the FTC and an alert will be placed in her credit files.

What is required by federal law in regard to mail-order sales by the 1975 Mail-Order rule as amended by the Mail or Telephone Order Merchandise rule of 1993?

Which of the following was the result in Federal Trade Commission v. Check Investors Inc., the case in the text involving whether, in an effort to collect bad check charges, the defendant violated the Fair Debt Collections Act through tactics such as telling check writers that they would be arrested and prosecuted?

Which of the following is the appropriate term for a requirement by the Federal Trade Commission that a company run advertisements in which the company explicitly states that formerly advertised claims were untrue?

Canada's cigarette labeling requirements are less strict than those in the U.S.

The Federal Trade Commission has _____ commissioners each of whom serves a ______-year term.

State consumer protection laws prohibiting used-car fraud may be known as ______ laws.

What type of agency is the Federal Trade Commission?