Product Description Risk Assessment & Management 3

Question 1

A product description includes the phrase 'waterproof' for a watch rated only water-resistant to 30m. Which risk is most directly triggered?

Accepted Answer

Misrepresentation and consumer fraud risk

Answer

'Waterproof' and 'water-resistant' have distinct legal meanings; using the wrong term constitutes misrepresentation that can result in FTC action and chargebacks.

Question 2

What is the primary purpose of a risk register in the context of managing product descriptions?

Accepted Answer

To document identified risks, their likelihood, impact, and assigned owners

Answer

A risk register is a living document that captures each identified risk, its probability, potential impact, and the person responsible for managing it.

Question 3

A product listing boasts '1 million sold!' without verifying the figure. Which risk management principle is being violated?

Accepted Answer

Substantiation principle

Answer

FTC guidelines require that advertising claims, including sales statistics, be substantiated by credible evidence before publication.

Question 4

A brand sells CBD products online and includes health benefit claims in the product description. The highest risk stems from:

Accepted Answer

FDA classification of CBD as an unapproved drug when health claims are made

Answer

The FDA has issued warning letters to CBD sellers making disease or health benefit claims, treating such products as unapproved drugs.

Question 5

In risk management terms, reviewing all product descriptions before a major holiday sales push is an example of:

Accepted Answer

Proactive (preventive) risk control

Answer

Reviewing descriptions before high-traffic periods identifies and corrects issues proactively, preventing losses before they occur.

Product Description Practice Test

Product Description Practice Test

Product Description Risk Assessment & Management 3