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Exam 24: Consumer Protection

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Question 1

Multiple Choice

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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

A) a legitimate sales technique.
B) bait-and-switch advertising.
C) counteradvertising.
D) puffery.

E) C) and D)
F) All of the above

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Question 2

True/False

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Buyers of goods sold door to door can cancel their contracts within three business days.

A) True
B) False

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False

Question 3

True/False

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A credit-cardholder is liable for all unauthorized charges made before the creditor is notified that the card has been lost.

Home Brand Products,Inc. ,in its ads,makes claims about its products that are obvious exaggerations and claims that are false but appear to be true.Home Brand may be subject to sanctions for

Drugs can be marketed to the public before they are ensured to be safe and effective.

All statutes that serve to protect the interests of consumers are classified as consumer law.

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

Wheels & Deals Corporation is subject to the Truth-in-Lending Act,which is a key statute regulating the credit and credit-card industries and concerns

Kristen receives unsolicited merchandise in the mail.Kristen

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

Vague generalities and obvious exaggerations constitute deceptive advertising.

The key federal statute regulating the credit and credit-card industries is basically a disclosure law.

Bait-and-switch advertising occurs when a salesperson lures a consumer into a store by advertising a low-priced item in order to switch the consumer to a more expensive item.

A collection agency must include a validation notice whenever it initially contacts a debtor for payment of a debt.

Darren wants to go into the business of direct merchandise sales.What are the legal problems that Darren might encounter in telemarketing In selling door-to-door In marketing over the Internet In soliciting sales through the mail

Labels on fresh meat must indicate where the food originated.

Ads cannot be unfair.

Milo buys an all-terrain-vehicle (ATV)from No-Limit Toys,Inc. ,on credit but makes no payments on the account.Odell,the owner of No-Limit Toys,calls Milo at home on a Monday morning at three a.m.Odell represents himself as PayNow Collection Agency and demands payment "or else." The next day,Odell sends Milo notice that he has thirty days to request verification of the debt,during which its payment will be suspended,but that if he does not pay the full amount due within five business days,Odell will arrange for the "destruction of Milo's good credit rating." Which laws has Odell violated,if any,and in what ways

Food products are not required to bear labels detailing the nutritional content.

Kip opens an account at a Lotsa Goodies Store,and buys a digital music player and other items,but makes no payments on the account.To collect the debt,Mako,the manager,contacts Kip's parents.This violates