Several 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 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
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