course material

1. According to CPSC staff, children under the age of sixteen
ASSIGNMENTSeveral manufacturers introduced into the American market products known
as all-terrain vehicles (ATVs). ATVs are motorized bikes that sit on three or four low-
pressure balloon tires and are meant to be driven off paved roads. Almost immediately, the
Consumer Product Safety Commission (CPSC) began receiving reports of deaths and serious
injuries. As the number of injuries and deaths increased, the CPSC began investigating ATV
hazards. According to CPSC staff, children under the age of sixteen accounted for roughly
half the deaths and injuries associated with this product. What type of rule, if any, may the
CPSC issue for ATVs?12. Sears formulated a plan to increase sales of its top-of- the-line
“Lady Kenmore” brand dishwasher; it sought to change the Lady Kenmore’s image without
reengineering or making any mechanical improvements in the dishwasher itself. To
accomplish this, Sears undertook a four-year, $8 million advertising campaign that claimed
that the Lady Kenmore completely eliminated the need to prerinse and prescrape dishes. As
a result of this campaign, sales rose by more than 300 percent. The “no scraping, no
prerinsing” claim was not true, however, and Sears had no reasonable basis for asserting
the claim. In addition, the owner’s manual that customers received after they purchased the
dishwasher contradicted the claim.After a thorough investigation, the Federal Trade
Commission (FTC) filed a complaint against Sears, alleging that the advertisements were
false and misleading. The final FTC order required Sears to stop making the no prescraping,
no prerinsing claim. The order also prevented Sears from (1) making any “performance
claims” for “major home appliances” without first establishing a reasonable basis consisting
of substantiating tests or other evidence; (2) misrepresenting any test, survey, or
demonstration regarding “major home appliances”; and (3) making any advertising
statements not consistent with statements in postpurchase materials supplied to
purchasers of “major home appliances.” Sears contends the order is too broad, as it covers
appliances other than dishwashers and includes “performance claims” as well. Explain
whether Sears is correct.13. Onondaga Bureau of Medical Economics (OBME), a collection
agency for physicians, sent plaintiff Seabrook a letter demanding payment for a $198
physician’s bill. In addition to demanding payment, the letter stated that legal action
resulting in a garnishment of his wages could be commenced against the plaintiff. Does
OBME’s letter violate the Fair Debt Collection Practices Act in that it (a) does not give
Seabrook the required notice or (b) threatened legal action against him? Explain.14. William
Thompson was denied credit based on an inaccurate credit report compiled by the San
Antonio Retail Merchant’s Association. The Association confused Thompson’s credit history

2. with that of another William Thompson and failed to use social security numbers to
distinguish the two men. The second Mr. Thompson had a poor credit history. Thompson
made numerous attempts to have the Association correct its mistake, but the error was
never corrected. Has the Association violated the Fair Credit Reporting Act? Explain.15.
Thompson Medical Company manufactures and sells Aspercreme, a topical analgesic.
Aspercreme is a pain reliever that contains no aspirin. Thompson’s advertisements strongly
suggest that Aspercreme is related to aspirin, however, by claiming that it provides “the
strong relief of aspirin right where you hurt.” Is Thompson’s advertisement for Aspercreme
false and misleading? Explain