Law 19 Quizzes
1. In the ordinary course of business, Xtra Charge Company sells goods to Yvon and other consumers on credit under installment sales contracts that typically require at least one year of monthly payments. Xtra does not disclose all of the credit terms to its customers. This is most likely to result in
a. a cease-and-desist order.
b. a fine.
c. no sanctions.
d. rescission of the contracts.
2. Owen signs an installment contract with Pixel Video Store to finance the purchase of a new Quotient-brand plasma HD-TV for $4,999. This transaction is subject to
a. no federal law.
b. the Fair Credit Reporting Act.
c. the Telecommunications Act.
d. the Truth-in-Lending Act.
3. Wheels & Deals Corporation is subject to the Truth-in-Lending Act, which concerns
a. the credit-worthiness of certain financial institutions and lenders.
b. the disclosure of credit terms in certain transactions.
c. the limits on certain types of credit that a creditor may grant.
d. the limits on certain types of debt that a consumer can accrue.
4. Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on
a. disability.
b. education.
c. income.
d. marital status.
5. Kristen receives unsolicited merchandise in the mail. Kristen
a. may keep the merchandise without any obligation to the sender.
b. must return the merchandise within five days to avoid payment.
c. must return the merchandise within fifteen days to avoid payment.
d. must return the merchandise within thirty days to avoid payment.
6. In the ordinary course of business, EZ Funds Corporation offers credit to Fay and other consumers and reports on the loans to credit agencies. To save time and money, EZ generally does not correct or update its reported information. This is most likely to result in
a. a levy of a nominal fine.
b. an assessment of damages.
c. an order of rescission of the loan contracts.
d. no sanctions.
7. Shep buys a car from his neighbor, Tyrone, for $8,000 and agrees to make monthly payments of $800 until the price is paid. This transaction is subject to
a. the Fair and Accurate Credit Transactions Act.
b. the Fair Credit Reporting Act.
c. the Truth-in-Lending Act.
d. none of the choices.
8. Kirk receives an unsolicited credit card in the mail and tosses it on his desk. Without Kirk’s permission, his roommate Leif uses the card to buy a new personal computer for $1,000. Kirk is
a. liable for $1,000.
b. liable for $500.
c. liable for $50.
d. not liable for any amount.
9. Bodie’s application to City Bank for a credit card is denied. Bodie can obtain information on her credit history in a credit agency’s files under
a. no federal law.
b. the Equal Credit Opportunity Act.
c. the Fair Credit Reporting Act.
d. the Fair Debt Collection Practices Act.
10. Eva borrows $10,000 from First National Bank to remodel a room in her home. This transaction is subject to
a. the Consumer Leasing Act.
b. the Magnuson-Moss Warranty Act.
c. the Truth-in-Lending Act.
d. the Uniform Commercial Code.
11. On behalf of RiteNow Collection Agency, Sid poses as a police officer in an attempt to collect payment from Tylo for a shipment of scuba equipment that she returned to Undersea Company two months earlier. This violates
a. no federal law.
b. the Fair Credit Reporting Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
12. Quik Collection Agency calls Pat several times a day, and sometimes in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to Quik for collection. This is a violation of
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
13. 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
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
14. Furniture Depot sells Gail a bedroom suite on credit. Gail fails to make the scheduled payments for six months. Furniture Depot sends her a letter, asking for immediate payment. This is a violation of
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
15. 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
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
16. The credit department of Mega-Mart calls Nora at work about an overdue bill. Nora’s employer objects. Mega-Mart continues to call Nora at work. This is a violation of
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
17. Green Grocer Corporation makes and markets a variety of processed food products. The federal agency responsible for enforcing health regulations concerning food is
a. the Consumer Product Safety Commission.
b. the Federal Reserve Board of Governors.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
18. Corner Market sells groceries. Delite Food & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is
a. Corner Market and Delite Food & Drug Store.
b. Delite Food & Drug Store only.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
19. Fun-E Products, Inc., makes and sells toys. The government agency that has the authority to remove a potentially hazardous toy from the market is
a. the Consumer Product Safety Commission.
b. the Federal Reserve Board of Governors.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
20. Steel Tool Company makes and sells tools. One of the tools is believed to be hazardous. The appropriate government agency may require Steel to
a. export the tool and sell it only abroad.
b. increase the price to cover the cost of any injuries or damage.
c. reduce the price to indicate the hazard to consumers.
d. remove the tool from the market.
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