Sales Ethics and Compliance Flashcards
7 cards from real CSA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Sales Ethics and Compliance flashcards as text
A customer signs a sales contract but later claims they were pressured and did not fully understand the terms. Under consumer protection law, what right may protect this customer?
Answer: The Right of Rescission
The Right of Rescission allows consumers a cooling-off period (typically 3 business days) to cancel certain contracts signed under pressure or in their home.
When a salesperson omits a material fact that would likely influence a buyer's decision, this is known as:
Answer: Fraudulent misrepresentation by omission
Withholding a material fact that the buyer would consider important in making their decision constitutes fraudulent misrepresentation by omission.
The Robinson-Patman Act primarily prohibits which type of unethical sales practice?
Answer: Price discrimination that harms competition between buyers
The Robinson-Patman Act prohibits sellers from charging different prices to competing buyers for the same product when it harms competition.
A sales manager instructs reps to tell customers a product is 'FDA approved' when it has only received FDA clearance. What type of violation is this?
Answer: A deceptive claim that may violate FTC regulations and misrepresent the product
FDA approval and FDA clearance are legally distinct designations; misrepresenting clearance as approval is a deceptive claim that can violate FTC rules.
An employee suspects their company is engaged in bid rigging with competitors. The most appropriate first step is to:
Answer: Report concerns through the company's compliance hotline or to legal counsel
Bid rigging is a serious antitrust violation; employees should report suspicions through internal compliance channels or seek legal guidance.
Which of the following best defines 'puffery' in a sales context?
Answer: Subjective promotional statements that reasonable consumers do not take as fact
Puffery refers to vague, subjective boasts like 'the best in the world' that are not taken as literal factual claims by reasonable consumers.
A customer purchases a product using a financing plan with a deferred interest clause. The salesperson fails to explain this clause. Which law is most likely violated?
Answer: The Truth in Lending Act (TILA)
TILA requires clear disclosure of all credit terms including deferred interest provisions before a consumer enters a credit agreement.