UNIT 4 HOMEWORK LAW 206
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American Military University *
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206
Subject
Law
Date
Jan 9, 2024
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1.
Using any advertisement(s) that you have seen on the Internet, give one example of
what might be considered “deception” in advertising. Explain your example with
reference to two of the principles mentioned in the text (p. 1354): a.
“Representation, omission, or practice likely to mislead.” b. “The ‘Reasonable
Consumer’ Test.”
An example that might be considered “deception” is Red Bull old slogan “Red Bull gives
you wings.” Where they were sued in 2014 not only stating the energy drink could give
you wings but also stating it could improve consumer’s concentration and reaction speed.
This led a lot of consumers to purchase the energy drink believing they could gain wings
and have improved intellectual abilities. For many consumers who regularly brought red
bull spent hundreds of dollars on this energy drink waiting to see if their slogan which is
no longer used would give them wings. Also, I’m sure plenty college students or
individuals who work long hours were under the impression they would be able to
concentrate more or have faster reaction speed while doing their work. Red bull had to
pay a max of 13 million dollars including 10 million to every consumer who brought
their energy drink in 2002.
This is an example of the “Representation, omission, or practice likely to mislead. Reason
why is because. “In all of these situations, the statement, omission, or practice must be
likely to mislead a consumer. Actual deception is not required. Determining whether an
ad or practice is likely to mislead requires that the FTC evaluate the accuracy of the
seller’s claims. In some cases, moreover, the Commission requires that sellers
substantiate objective claims about their products by showing that they have a reasonable
basis for making such claims.”
Red bull didn’t have substantiated claims that you can really obtain wings by drinking
their energy drink and have improved concentration and reaction speed. Honestly, it’s
kind of common sense to know you will not gain wings drinking an energy drink but I
can see where it’s misleading because some people probably truly believed it and
probably would have done something crazy after drinking a red bull drink like jumping
off a roof to see if they obtained wings to fly as red bulls old slogan stated.
Also, example of “The Reasonable Consumer’ Test.” Which states, “To be deceptive, the
representation, omission, or practice must also be likely to mislead reasonable consumers
under the circumstances. This requirement aims to protect sellers from liability for every
foolish, ignorant, or outlandish misconception that some consumer might entertain.”
As we can see many consumers did believe in the foolish and ignorant misconception that
red bull claimed their energy drinks can do and now having this in place is a good look to
protect consumers from any future companies from misleading consumers to believe
things that have not been backed by the FDA or scientifically proven.
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1354)
https://www.businessinsider.com/false-advertising-scandals-2016-3#red-bull-said-it-
could-give-you-wings-3
2.
What are the duties of consumer reporting agencies under the Fair Credit Reporting
Act (FCRA)?
The duties of consumer reporting agencies under the Fair Credit Reporting Act are.
-
Ensure that users employ the information only for the following purposes: consumer
credit sales, employment evaluations, the underwriting of insurance, the granting of a
government license or other benefit, or any other business transaction where the user
has a legitimate business need for the information.
-
Avoid including in a report obsolete information predating the report by more than a
stated period. This period usually is 7 years; for a prior bankruptcy, it is 10 years. This
duty does not apply to credit reports used in connection with certain life insurance
policies, large credit transactions, and applications for employment.
-
Ensure maximum possible accuracy regarding the personal information in credit
reports. However, the act does little to limit the types of data included in credit
reports. In fact, all kinds of information about a person’s character, reputation,
personal traits, and mode of living seemingly are permitted. However, medical
information cannot be included without consent from the relevant consumer.
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1367)
3.
What are the specifically forbidden practices under the Fair Debt Collection
Practices Act (FDCPA)?
The forbidden practices under the Fair Debt Collection Practices Act are.
-
Harassment, oppression, or abuse.
Examples include threats of violence, obscene or
abusive language, and repeated phone calls.
-
False or misleading misrepresentations.
Among the FDCPA’s listed examples are
statements that a debtor will be imprisoned for failure to pay, that a collector will take
an action it is not legally entitled to take or does not intend to take, that a collector is
affiliated with the government, and that misstate the amount of the debt.
-
Unfair practices.
These include collecting from a debtor an amount not authorized by
the agreement creating the debt, inducing a debtor to accept a collect call before
revealing the call’s true purpose, and falsely or unjustifiably threatening to take a
debtor’s property.
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1373)
4.
What are the most important provisions of the Fair Credit Billing Act and how are
they triggered?
The most important provisions of the Fair Credit Billing Act are.
-
Billing disputes.
To trigger these provisions, a cardholder must give the issuer written
notice of an alleged error in a billing statement within 60 days of the time that the
statement is sent to the cardholder. Then, within two complete billing cycles or 90
days (whichever is less), the issuer must either (1) correct the cardholder’s account or
(2) send the cardholder a written statement justifying the statement’s accuracy. Until
the issuer takes one of these steps, it may not (1) restrict or close the cardholder’s
account because of her failure to pay the disputed amount, (2) try to collect the
disputed amount, or (3) report or threaten to report the cardholder’s failure to pay the
disputed amount to a third party such as a consumer reporting agency.
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1372)
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