I believe that the banks are not acting in a responsible fashion with their solicitation of consumers for credit cards and credit card lines. As mentioned in the article, the banks are advertising "promotions of credit card and debt to increase limits" in an attempt to gather additional consumers. I think by advertising these credit cards to college and high school students, and then providing them with higher credit limits and promotions, the banks are aiming to increase the number of irresponsible spenders in today's society to make money.
What responsibility do consumers have with regard to credit card debt? Consumers are held completely liable for credit card debt they have incurred. The consumer had the choice to use or not use the card and should be held responsible for the actual use. What disclosure rules apply in banks' solicitations of credit card customers? In banks' solicitation of credit card customers, the disclosures required sent out to the customer must have the following information: (i) what interest charge and APR for the charges on the credit card, (ii) when the bills will be sent, (iii) what to do about questions on the bills, and (iv) when payments are due. In addition to the aforementioned, the bank's solicitation must provide a disclosure of all terms if any part of the credit agreement is mentioned in an advertisement. What should the banks do to influence legislation? To influence legislation Banks have spent lots of money lobbing Congress for rules more favorable to them. Per the Administrative Procedures Act, Banks can also provide their side and opinion with public comments during the rule making process to influence legislation. Question #2: Look at Problem 16-8 found on page 561 of your eBook. We will begin our discussion this week by working through this "bread" problem to help us understand "per se" violations and how they affect how anti-trust suits are brought and proven. To get started, let's answer the following questions about Problem 8: Was Continental's conduct illegal under the Sherman Act? Why or why not? Continental's conduct was illegal under the Sherman Act because of the act of price fixing. Price fixing is the violation of "raising, depressing, fixing, pegging, or stabilizing the price of a commodity" and a violation of Section 1 of the Sherman Act (p. 539) Inglis' accusations of price fixing bring to light Continental selling its private label bread at below-cost prices. Inevitably, with such low sale prices for Continental's private label, consumers would be attracted to the low price, and the retailers would want to stock more of goods that sold so well. As stated in the passage, Continental earned "more grocery shelf space for its advertised label Wonder" as a result of such a price fix. By selling their private label at such a low price, Continental's motive behind the pricing adjustment was to eventually create a monopoly for the grocery shelf space with all of their own products to eventually phase out Inglis' product. This act of price fixing is illegal. Is predatory pricing a per se violation? (Support your answer). Predatory pricing is a per se violation because the intention of predatory pricing is to lower the prices and push competitors out of the market or create barriers for potential new competitors. Predatory pricing is also a per se violation because it is a violation of the antitrust laws, specifically the Sherman Act, which prohibits monopolization. Predatory pricing is done with deliberate objective and with the motive of becoming a monopoly. When/if a monopoly has been achieved, the company would then inevitably raise the prices of the goods, which is why monopolies are illegal. You Decide Project Virginia Pollard worked as a cashier and clerk for Teddy Supplies, a family-owned chain of film production equipment supply stores in Pennsylvania and New Jersey. During a routine performance evaluation, Virginia's supervisor at Teddy's complained that she...
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