Question

Owen signs an installment contract with Pixel Video Store to finance the purchase of a new Quotient-brand plasma HD-TV for $4,999. This transaction is subject to:

a. the Truth-in-Lending Act.
b. the Telecommunications Act.
c. no federal law.
d. the Fair Credit Reporting Act.

Answer 1

Owen's financing purchase is governed by the Truth-in-Lending Act, which ensures clear disclosure of credit terms to protect consumers.

Step-by-step explanation:

Owen's transaction for financing the purchase of a Quotient-brand plasma HD-TV is subject to the Truth-in-Lending Act (TILA). This federal law ensures that consumers are provided with clear and accurate information about the costs and terms of credit, allowing them to compare different offers. TILA mandates that lenders disclose information such as finance charges, annual percentage rates, and total costs before an agreement is signed. This act is designed to protect consumers from unfair credit billing and credit card practices.