Question 1

The ________ Act aids victims of identity theft by allowing them to file identity theft reports with consumer reporting agencies.

Accepted Answer

The Fair and Accurate Credit Transactions (FACT)Act aids victims of identity theft by allowing them to file identity theft reports with consumer reporting agencies and by requiring such agencies to include "fraud alerts" in their credit reports about consumers who believe they have been victimized by someone else's fraudulent use of their financial information.

Question 2

Which of the following actions is most likely to adhere to the Magnuson-Moss Warranty Act of 1975?

Accepted Answer

Nothing in the Magnuson-Moss Warranty Act of 1975 requires sellers to give a written warranty.

Question 3

Under the Truth in Lending Act (TILA),if a credit plan for a home equity loan involves a variable interest rate,the "index rate" to which changes in the APR are pegged must be:

Accepted Answer

Under the TILA,if a credit plan for a home equity loan involves a variable interest rate,the "index rate" to which changes in the APR are pegged must be based on some publicly available rate and must not be under the creditor's control.

Question 4

The Consumer Financial Protection Bureau (CFPB)was created by the:

Accepted Answer

The Dodd-Frank Wall Street Reform and Consumer Protection Act created a new agency,the Consumer Financial Protection Bureau (CPFB)and granted it authority to take regulatory action to mandate clear,accurate disclosures of information that consumers need in shopping for mortgages,credit cards,and other financial products.

Question 5

Harry filed for bankruptcy five years ago.He needs a consumer reporting agency to provide a credit report on him for a government license he has applied for.Under the Truth in Lending Act (TILA),the agency should avoid including in the report obsolete information predating the report by more than:

Accepted Answer

According to the TILA,the agency should avoid including in Harry's credit report obsolete information predating the report by more than ten years.

Question 6

Under the Truth in Lending Act (TILA),a creditor can unilaterally terminate a credit plan for a home equity loan and require immediate repayment of the outstanding balance when a consumer has:

Accepted Answer

Under the TILA,a creditor cannot unilaterally terminate a credit plan for a home equity loan and require immediate repayment of the outstanding balance unless a consumer has made material misrepresentations,has failed to repay the balance,or has adversely affected the creditor's security.

Question 7

Violations of the Magnuson-Moss Warranty Act of 1975 are violations of:

Accepted Answer

Violations of the Magnuson-Moss Warranty Act of 1975 are violations of FTC Act Section 5;the commission may use its normal enforcement procedures in such cases.

Question 8

Nearly Insolvent Savings & Loan (NISL)recently ran a newspaper advertisement that read as follows: "Unsecured open-end credit lines (maximum $15,000)now available to consumers.Borrow against your line as you need money.Your minimum monthly payment to NISL? Only $25." Which of the following is a legally accurate statement about this advertisement?

Accepted Answer

The Truth in Lending Act (TILA)has provisions dealing with consumer credit advertising.Under TILA,if ads for open-end consumer credit plans state any of the plan's specific terms,they must state various other terms as well.Since NISL's advertisement for open-ended consumer credit provides information like the minimum monthly payment,it must include other information (like APR)as well to avoid violation of TILA.

Question 9

Which of the following instances of lending is most likely to be covered by the Truth in Lending Act (TILA)?

Accepted Answer

To qualify as a creditor under the Truth in Lending Act (TILA),the party in question must be regularly extending credit and must also either impose a finance charge or by agreement require payment in more than four installments.Therefore,the TILA is most likely to apply to an auto retailer who extends a $25,000 credit to a buyer payable in five installments.

Question 10

The Fair Credit Reporting Act imposes disclosure duties on:

Accepted Answer

The Fair Credit Reporting Act imposes disclosure duties on users of credit reports.

Question 11

Which of the following would keep the Truth in Lending Act (TILA)from applying to a transaction?

Accepted Answer

The TILA generally applies to creditors who extend consumer credit to a debtor in an amount not exceeding $25,000.Consumer credit is credit enabling the purchase of goods,services,or real estate used primarily for personal,family,or household purposes-not business or agricultural purposes.As such,a debtor's intent to make a commercial use of funds borrowed in the transaction would keep the TILA from applying to a transaction.

Question 12

The FCRA establishes ________ for persons who knowingly and willfully obtain consumer information from a credit bureau under false pretenses.

Accepted Answer

The FCRA establishes criminal penalties for persons who knowingly and willfully obtain consumer information from a credit bureau under false pretenses.

Question 13

In his April 2011 credit card bill,Shawn noticed an entry for $1,179 paid by him to a resort on the west coast.Shawn lives in Montpelier,Vermont and claims he last traveled to the west coast almost two years back.In May 2011,he gave a written notice of the alleged error in the billing statement to his credit card issuer.Assume that the credit card issuer has failed to comply with the rules of the Fair Credit Billing Act.Under this Act,how much of the disputed amount can the issuer collect from Shawn?

Accepted Answer

A credit card issuer that fails to comply with any of the rules of the Fair Credit Billing Act forfeits its right to collect $50 of the disputed amount from the cardholder.Therefore,the issuer can collect $1,129 ($1,179 - $50)from Shawn.

Question 14

Which of the following is true about the Truth in Lending Act (TILA)?

Accepted Answer

The TILA debtor must be a natural person;the act does not protect business organizations.

Question 15

Tony Sinister is a candidate for a middle management position at Mobco Inc.Mobco retained Clandestine Investigation & Credit Reporting Agency (CICRA)to interview Sinister's friends,neighbors,and associates and then prepare an investigative consumer report on Sinister.Which of the following would the Fair Credit Reporting Act require in this situation?

Accepted Answer

Under the Fair Credit Reporting Act,if a user procures an investigative consumer report on a person,it must inform him that the report has been requested,that the report may contain sensitive information,and that he has a right to obtain further disclosures about the user's investigation.As such,the Fair Credit Reporting Act would require that Mobco inform Sinister of its request for the report and of his right to obtain further disclosures about the investigation.

Question 16

The ________ Act is not limited to consumer credit;it also covers business and commercial loans.

Accepted Answer

The Equal Credit Opportunity Act is not limited to consumer credit;it also covers business and commercial loans.

Question 17

Max's credit card was stolen last week.By the time Max reported this theft and got his card canceled,the thief had already withdrawn $10,000 using his card.Under the Truth in Lending Act (TILA),what is Max's maximum liability for this unauthorized use of his card?

Accepted Answer

Max's maximum liability for unauthorized use of his credit card is $50 under the TILA.The TILA limits a cardholder's liability for unauthorized use of the card to a maximum of $50.

Question 18

The Equal Credit Opportunity Act (ECOA)requires creditors to notify applicants in how many days of a decision on credit request?

Accepted Answer

The ECOA requires that creditors notify applicants of the action taken on a credit application within 30 days of its receipt or any longer reasonable time stated in the regulations.

Question 19

The TILA's detailed disclosure provisions break down into three categories.One of those categories is that of:

Accepted Answer

The TILA's detailed disclosure provisions break down into three categories.One of the categories is that of open-end credit.

Question 20

The Magnuson-Moss Warranty Act applies to sales of goods costing:

Accepted Answer

The Magnuson-Moss Warranty Act applies to sales of goods costing $15 or more to a consumer.

Quiz 48: The Federal Trade Commission Act and Consumer Protection Laws

The ________ Act aids victims of identity theft by allowing them to file identity theft reports with consumer reporting agencies.

Which of the following actions is most likely to adhere to the Magnuson-Moss Warranty Act of 1975?

Under the Truth in Lending Act (TILA) ,if a credit plan for a home equity loan involves a variable interest rate,the "index rate" to which changes in the APR are pegged must be:

The Consumer Financial Protection Bureau (CFPB) was created by the:

Harry filed for bankruptcy five years ago.He needs a consumer reporting agency to provide a credit report on him for a government license he has applied for.Under the Truth in Lending Act (TILA) ,the agency should avoid including in the report obsolete information predating the report by more than:

Under the Truth in Lending Act (TILA) ,a creditor can unilaterally terminate a credit plan for a home equity loan and require immediate repayment of the outstanding balance when a consumer has:

Violations of the Magnuson-Moss Warranty Act of 1975 are violations of:

Which of the following instances of lending is most likely to be covered by the Truth in Lending Act (TILA) ?

The Fair Credit Reporting Act imposes disclosure duties on:

Which of the following would keep the Truth in Lending Act (TILA) from applying to a transaction?

The FCRA establishes ________ for persons who knowingly and willfully obtain consumer information from a credit bureau under false pretenses.

Which of the following is true about the Truth in Lending Act (TILA) ?

The ________ Act is not limited to consumer credit;it also covers business and commercial loans.

Max's credit card was stolen last week.By the time Max reported this theft and got his card canceled,the thief had already withdrawn $10,000 using his card.Under the Truth in Lending Act (TILA) ,what is Max's maximum liability for this unauthorized use of his card?

The Equal Credit Opportunity Act (ECOA) requires creditors to notify applicants in how many days of a decision on credit request?

The TILA's detailed disclosure provisions break down into three categories.One of those categories is that of:

The Magnuson-Moss Warranty Act applies to sales of goods costing: