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113. The failure to make a timely investigation into a consumer's question about his/her credit report is a violation of the
FCRA.
a. True
b. False
114. There is a three-day rescission period on home equity loans.
a. True
b. False
115. Chapter 11 is the liquidation provision in bankruptcy.
a. True
b. False
116. Chapter 13 bankruptcy is only available to consumers.
a. True
b. False
117. A contract signed at home for the installation of a pool under a 90-days-same as cash agreement is not subject to
the 3-day rescission period.
a. True
b. False
118. The Fair Debt Collections Practices Act applies to attorneys only if they are doing the collection on a percentage
basis.
a. True
b. False
119. The Fair Debt Collections Practices Act applies only to consumer credit collection.
a. True
b. False
120. The Bankruptcy Reform Act of 2005 made it easier for consumers to declare bankruptcy.
a. True
b. False
121. Under the Bankruptcy Reform Act of 2005, consumers can always file for liquidation proceedings without going
through Chapter 13.
a. True
b. False
122. Chapter 11 bankruptcy is available to consumers with debts.
a. True
b. False
123. Credit repair organizations are now subject to federal law and disclosure requirements.
a. True
b. False
124. The three-day-cooling-off period applies to:
a. credit contracts in which a security interest in the home is given.
b. second mortgages on homes.
c. both a and b
d. none of the above
125. In order to recover damages under the Fair Credit Billing Act, the debtor must:
a. make a written objection.
b. file a complaint with the Federal Reserve Board.
c. notify the creditor of the error within 30 days of receiving the bill.
d. all of the above
126. The Fair Credit Reporting Act applies:
a. only to consumer reporting agencies.
b. to all information on consumer debtors.
c. to consumer and commercial credit.
d. none of the above
127. What rights does a debtor have if he/she discovers inaccuracies in the credit report?
a. can ask to have it eliminated
b. can sue for libel
c. can provide a separate credit report
d. all of the above
128. The Fair Debt Collections Act applies to:
a. collection agencies.
b. all consumer credit businesses.
c. the IRS.
d. banks.
e. all of the above
129. Which of the following is prohibited under the FDCPA?
a. contacting third parties for current address information on the debtor
b. contacting the debtor at his/her place of employment
c. contacting the debtor after the debtor requests no further contact
d. All of the above are prohibited.
130. Garnishments:
a. are attachments of funds for executing a judgment.
b. are not regulated by federal laws.
c. can take up to 75 percent of the debtor's wages.
d. all of the above
131. If a consumer requests a credit reporting agency to correct his/her credit report:
a. the agency must comply.
b. the agency need only include a copy of the request in its report.
c. any corrections made must be sent to all report recipients over the last two years.
d. none of the above
132. Diana and Charles Windsor are considering purchasing a swimming pool. The representatives of Fun-in-the-Sun
Pool arrange a meeting at the Windsor's home to discuss the price and draw up plans. The Windsors sign a
contract for the pool for a price of $12,000 with payments of $3000 each month for the next four months while the
pool is under construction. The Windsors also agree to pay a carrying charge for the payments of $250.00. Two
days after signing the contract, the backhoe operator arrives ready to dig the pool, but Charles tells him the contract
is off. The Windsors:
a. have breached their contract and will be liable to Fun-in-the-Sun for damages.
b. are protected by their three-day rescission rights under Regulation Z.
c. do not have the three-day rescission rights since there are no monthly installment payments over a period of
one year.
d. none of the above
133. Which of the following statements in a letter from a collector to a debtor would be a violation of FDCPA?
a. "We will be contacting your employer to let him know of this problem."
b. "We will file suit if payment is not made within 30 days."
c. "We will be calling you at your home."
d. All of the above are violations.
134. Which of the following acts by a third-party collector would be a violation of the FDCPA?
a. sending the debtor a postcard that reads: "Don't let this bill affect your excellent credit rating"
b. calling the debtor at home at 8:30 AM to confirm the debt
c. referring the account to an attorney for a lawsuit
d. filing suit without first contacting the debtor
135. Which of the following is true about a line of credit secured by the equity in the debtor's home?
a. there is a three-day rescission period
b. the same levels of disclosure for other types of credit are not required
c. the monthly payments need not be disclosed
d. All of the above are true.
136. Who is covered under the Fair Debt Collections Practices Act?
a. an attorney collecting a debt for himself
b. Macy's collecting a debt through its own collection subsidiary
c. a hospital collecting a debt from a patient
d. None of the above is covered under the FDCPA.
137. Which of the following is not covered by the Fair Debt Collections Practices Act?
a. an attorney collecting for a client
b. a collection agency with one exclusive client
c. a hospital using its collection department to collect fees from patients
d. an attorney collecting on a contingent fee basis
e. All of the above are covered under the FDCPA.
138. Under the Fair Credit Reporting Act, consumers have which of the following rights?
a. privacy and no disclosure without permission
b. right to dispute information in the report
c. right to correction
d. right to rebuttal statement
e. consumers have all of the above rights
139. Which of the following cannot be disclosed on a credit report being issued on a job applicant for a $37,000/year job
in 2008?
a. a bankruptcy in 1990
b. a judgment paid in 1991
c. a criminal conviction for running a meth lab in 1998
d. All of the above can be disclosed.
140. Paula Sanford has filed a voluntary petition in bankruptcy. Paula has a job but admits that she is in over her head on
credit card debt. The bankruptcy court:
a. can allow Paula to declare bankruptcy because she has debts.
b. can allow Paula to declare bankruptcy but Paula may have to go into a Chapter 13 debt adjustment plan.
c. has no remedies for consumers with only credit card debt.
d. none of the above
141. Sekelow Enterprises is a debt collection agency. It uses postcards to contact consumer debtors it is attempting to
collect from for its clients. The name “Sekelow Enterprises” and the company address appear on the postcards
used along with: “VERY IMPORTANT: PLEASE CONTACT US ABOUT YOUR DILLARD’S DEBT.”
a. Sekelow has violated the Fair Debt Collections Practices Act.
b. Sekelow has not violated the Fair Debt Collections Practices Act if it follows up with a phone call and
verification of debt.
c. Sekelow cannot collect the debt without registering as a credit repair organization.
d. both a and c
142. Which of the following is prohibited in the collection of consumer debt by the Fair Debt Collections Practices Act?
a. 7 AM calls at the debtor’s place of employment.
b. 7 AM calls at the debtor’s home.
c. 7 AM calls at the debtor’s parents’ home.
d. all of the above
143. Which of the following sections of the federal bankruptcy laws deals with consumer debt adjustment plans?
a. Chapter 7
b. Chapter 11
c. Chapter 13
d. CRO provisions
144. Laura Walsh owed $560 to a local department store. The debt was assigned to a collection agency. The agency did
the following: (a) used a postcard to contact Laura and summarize her debt, (b) called her at 7 AM to catch her
before she left for work, (c) called her in spite of Laura's requests to stop, (d) contacted her employer about the
debt, (e) contacted her at the hospital as she visited her ill mother. Are any of the actions improper?
145. List the federal laws regulating credit contracts and give a brief description of each.
146. Discuss why recission is an appropriate remedy for certain TILA violations rather than damages.
147. Using what you have learned about consumer credit, develop a credit application that would comply with all federal
statutes and regulations.
148. List what cannot be disclosed in a credit report for a $2,000 loan.
149. The parties' previous course of dealing will have little impact as courts interpret their contract.
a. True
b. False
150. Morality clauses in contracts are both illegal and unethical.
a. True
b. False
151. Akon had an idea for a website called “Fantrace,” a site that would help celebrities connect with their fans. Akon
entered into an agreement with Broomfield for his help in building the site and Khalilian to help with marketing.
Broomfield had recommended his friend, Khalilian, for the project because of his connections with celebrities.
However, Broomfield did not tell Akon that he knew that Khalilian was a liar and that he had also been in prison.
When things did not go well in working with the two, Akon sought to set aside the contract on the grounds of
misrepresentation. Which of the following is correct?
a. Withholding information is not misrepresentation.
b. Broomfield had no obligation to make any disclosures about his friend.
c. Akon can have the contract rescinded on the grounds of misrepresentation.
d. Intent is not present, so there is no case for misrepresentation.
152. Lawyer A transferred his clients to Lawyer B, indicating to his clients that Lawyer B would complete all of the
obligations under their fee agreements.
a. Lawyer A has completed an assignment and delegation.
b. Lawyer A cannot transfer clients or client agreements.
c. Because the clients were notified, Lawyer A can make the transfer.
d. The clients are third-party beneficiaries of Lawyer A and Lawyer B’s agreement.
153. Allegheny Energy Supply Co. and Monogahela Power Co., a subsidiary, filed suit against Anker West Virginia
Mining Co., later acquired by International Coal Group, for breach of contract. The parties had a contract for
Allegheny and Monogahela to buy all of the coal produced from a proposed "Sycamore 2" mine, located in
Harrison County, W.Va. The coal promised amounted to about 1.8 million tons per year, not less than 20 million
tons total. Anker has never produced the necessary amount of coal, topping out at 480,000 tons per year in total
from the mine. Anker had sent a letter to Allegheny in 2006 claiming physical difficulties at the mine and a change
in the enforcement of regulations relating to coal mining near gas wells hampered their ability to extract coal from
the mine. As a result, Anker said it was unable to deliver the necessary coal. Which defense to performance is
Anker relying on?
a. Misrepresentation
b. Parol evidence
c. Failure of conditions
d. Force majeure
154. What would be their grounds for terminating the payment of their pledges?
a. Misrepresentation
b. Lack of performance
c. Fraud
d. Undue influence
155. What issue is there about whether there is a contractual obligation?
a. Whether a pledge to make a gift is supported by consideration.
b. Whether there can be a pledge across country borders.
c. The inability to enforce international contracts.
d. Whether the pledges were in writing.
