Management 4540 Chapter 44 - Consumer Law

Front 1

Unfair practices

Back 1

Act forbids marketing unreasonably dangerous products

Front 2

Deceptive practices

Back 2

The 1938 act forbids:
1. Material misrepresentation
2. Likely to mislead a reasonable consumer under circumstances

Front 3

List the three categories of false advertising

Back 3

1. Scientifically unsupported advertising
2. False claims o celebrity use
3. Bait advertising - bait and switch

Front 4

Bait and switch

Back 4

Bait: advertising unusually low price on an item

Switch: Refusal to show, inadequate quantities, failure to deliver within reasonable time, discouraging sales by employees

Front 5

List the five remedies for false advertising under the FTC act

Back 5

1. Cease and desist orders
2. Counter advertising
3. Consumer redress actions
4. Multiple products order
5. Consent orders

Front 6

Cease and desist orders

Back 6

A court order requiring that a certain marketing practice be stopped

Front 7

Counter advertising

Back 7

An order to correct false statements in future ads

Front 8

Consumer redress actions

Back 8

A class action designed to correct a widespread deceptive practice and to stop future fraud

Front 9

Multiple products order

Back 9

An offer affecting more than one product of the advertiser

Front 10

Consent orders

Back 10

Agreement between FTC and advertiser with a remedy included

Front 11

Door to door sales regulations

Back 11

Three day cooling off period. May cancel if post marked by third business day

Front 12

Used car buyer's guide - Four things that dealers must state:

Back 12

1. Warranty or "As is"
2. Information on service contracts or promises
3. Must suggest mechanical inspection
4. Must suggest getting promises in writing

Front 13

Funeral home sales regulations

Back 13

1. Must give itemized prices
2. Price gouging is prohibited

Front 14

Magnuson Moss Federal Breach of Warranty Act

Back 14

1. Actual damages and attorney's fees for breachs of warranty
2. Minimum standards for "Full warranties"

Front 15

Four powers of the consumer product safety commission

Back 15

1. Set safety standards for comsumer products
2. Ban unsafe products
3. Order recalls of products imminently hazardous
4. Regulate safety reporting by manufacturers

Front 16

Who is regulated in the Truth in Lending Act? (TILA)

Back 16

Those in the business of making loans or extending or arranging credit

Front 17

Who's protected under the Truth in Lending Act (TILA)?

Back 17

1. Natural persons (not corporations)
2. Loans less than $25,000 or on personal residences
3. Consumer transactions only

Front 18

What are the two ways lending is regulated under the Truth in Lending Act (TILA)?

Back 18

1. No discrimination in extending credit
2. Disclosure under regulation Z of the federal reserve board

Front 19

Disclosure requirements of open end financing (no fixed payment date)

Back 19

Credit card bill and agreement must disclose finance and other charges

Front 20

Disclosure requirements of closed end financing (fixed repayment schedule or date)

Back 20

1. Amount financed, APR and total finance charge
2. Payments - amount and total
3. Late charges and security interests

Front 21

Remedies under the Truth in Lending Act

Back 21

2 times the finance charges plus up to $1000, plus attorney's fees

Front 22

Fair credit billing act - Consumer rights

Back 22

1. Withhold payment on card if:
a.) Dispute with merchant
b.) Good faith effort to resolve without satisfaction

2. Procedures for billing disputes

3. Limits on charges for unauthorized use
a.) $50 per card for unauthorized charges
b.) $0 if card was improperly issued

Front 23

List the three purposes of the fair credit reporting act

Back 23

1. Assures legitimate business use of credit information

2. Regulates obsolete information - can't be older than:
a.) 7 years for most information
b.) 10 years for bankruptcy

3. Helps guarantee accuracy

Front 24

List the two consumer rights within the fair credit reporting act

Back 24

1. Disclosure of reports
2. Reports must include corrections or consumer's written explanation of incident

Front 25

List the two remedies under the fair credit reporting act

Back 25

1. Actual damages for negligence
2. If willful misreporting, then punitive damages and attorney's fees in addition to actual damages

Front 26

Who is governed by the fair debt collection practices act?

Back 26

1. Outside collection agents (not creditor or employee of creditor)
2. Collection agencies
3. Attorney's

Front 27

Consumer rights under the fair debt collection practices act

Back 27

1. Validation notice - must include amount of debt, name of creditor, and offer to give verification of debt.

2. Most communication from creditor must cease if:
a.) debtor has lawyer
b.) debtor refuses to pay debt

3. Collectors can't use deception or harrassment

Front 28

What are the available garnishments to creditors under the fair debt collection practices act?

Back 28

1. 25% of wages, 10% head of household

2. Support obligation - 25%

3. Some government obligations

4. No limits on bank accounts