AFIP Certification ACTUAL QUESTIONS
AND CORRECT ANSWERS
What does UDAP stand for? - CORRECT ANSWERS✅✅Unfair, Deceptive Acts or
Practices
Who is the primary enforcer of consumer laws within a state. The organization a dealer
would most likely encounter? - CORRECT ANSWERS✅✅Attorney General
If we treat consumers fairly and ethically, then there is ______________ on the government
to enact legislation and write additional rules. - CORRECT ANSWERS✅✅Less Pressure
Which organizations in our industry does the Federal Trade Commission (FTC) oversee? -
CORRECT ANSWERS✅✅Franchise New Dealers
What does UDAAP stand for? - CORRECT ANSWERS✅✅Unfair, Deceptive Abusive Acts
or Practices
Which organizations in our industry does the Consumer Financial Protection Bureau (CFPB)
oversee? - CORRECT ANSWERS✅✅Independent Used Dealers
Buy Here Pay Here (BHPH)
Lease Here Pay Here (LHPH)
Finance Sources
When it comes to a RISC and a lease, the financial institution has a lien on the vehicle. Why?
- CORRECT ANSWERS✅✅The vehicle is collateral (the thing of value)
What is the definition of a contract? - CORRECT ANSWERS✅✅A promise or set of
promises between two or more parties that is enforced by law
What does it mean to "force place" the insurance? - CORRECT ANSWERS✅✅The finance
source will purchase the required coverage and charge it to the customers monthly payment
,Who is the primary enforcer of consumer laws within a state. The organization a dealer
would most likely encounter? - CORRECT ANSWERS✅✅Attorney General
What does it mean to "Accelerate the Balance." - CORRECT ANSWERS✅✅The finance
source will make the full outstanding balance due and payable
What could block the formation of a valid contract? - CORRECT
ANSWERS✅✅Dishonesty with a Consumer or Customer
Misrepresentation of Facts or Statements
Fraudulent Inducement
Someone Lacks Mental Capacity
Underage
What does it mean to "educate the consumer before they consummate." - CORRECT
ANSWERS✅✅If a customer doesn't understand something in the contract, I should make an
effort to help them understand
If I don't know the answer to a term or condition on the contract I get upper management
involved to help explain it
It is my responsibility to understand the terms and conditions on the contracts I am
administering
Help the customer to understand the terms and conditions of the contract by clarifying key
items they have concerns with
What is the right of recission? - CORRECT ANSWERS✅✅The ability for a customer to get
out of a contract
What are the three (3) steps in contracting? - CORRECT ANSWERS✅✅Offer, Acceptance,
Consideration
A "Credit Sale" is considered _________ and a "Loan" is considered __________. -
CORRECT ANSWERS✅✅Dealer Assisted Financing; Customer Arranged Financing
According to the federal requirements under TILA Reg Z. When do we use APR? -
CORRECT ANSWERS✅✅As a disclosure on the installment contract
, Only in installment advertising, it is not required in lease ads
Printed dialog involving the finance charge
Conversations discussing the cost of credit
If a Dealer receives a cease and desist order for an ad they ran that violated the Truth in
Lending Act/Reg. Z. If the Dealer continues to run the ad, what are the potential penalties? -
CORRECT ANSWERS✅✅They could be required to pay a fine of up to $51,744 per day,
per violation
When it comes to negative equity, there are two mathematical computations we can use;
gross and net (netting). Which of the following are accurate.
The Gross format _____ math, the Net format _____ math. - CORRECT
ANSWERS✅✅does not require, requires
What is the TILA disclosure box comprised of? - CORRECT ANSWERS✅✅Payment
Schedule
Amount Financed
Total of the Payments
Total Sale Price
Finance Charge
APR
What are considered Triggering Terms on an installment advertisement? - CORRECT
ANSWERS✅✅Any finance charge
Amount of any payment
Contract term
Amount or percentage of any down payment
The total sale price is _______ the largest number on the installment contract. - CORRECT
ANSWERS✅✅Always
AND CORRECT ANSWERS
What does UDAP stand for? - CORRECT ANSWERS✅✅Unfair, Deceptive Acts or
Practices
Who is the primary enforcer of consumer laws within a state. The organization a dealer
would most likely encounter? - CORRECT ANSWERS✅✅Attorney General
If we treat consumers fairly and ethically, then there is ______________ on the government
to enact legislation and write additional rules. - CORRECT ANSWERS✅✅Less Pressure
Which organizations in our industry does the Federal Trade Commission (FTC) oversee? -
CORRECT ANSWERS✅✅Franchise New Dealers
What does UDAAP stand for? - CORRECT ANSWERS✅✅Unfair, Deceptive Abusive Acts
or Practices
Which organizations in our industry does the Consumer Financial Protection Bureau (CFPB)
oversee? - CORRECT ANSWERS✅✅Independent Used Dealers
Buy Here Pay Here (BHPH)
Lease Here Pay Here (LHPH)
Finance Sources
When it comes to a RISC and a lease, the financial institution has a lien on the vehicle. Why?
- CORRECT ANSWERS✅✅The vehicle is collateral (the thing of value)
What is the definition of a contract? - CORRECT ANSWERS✅✅A promise or set of
promises between two or more parties that is enforced by law
What does it mean to "force place" the insurance? - CORRECT ANSWERS✅✅The finance
source will purchase the required coverage and charge it to the customers monthly payment
,Who is the primary enforcer of consumer laws within a state. The organization a dealer
would most likely encounter? - CORRECT ANSWERS✅✅Attorney General
What does it mean to "Accelerate the Balance." - CORRECT ANSWERS✅✅The finance
source will make the full outstanding balance due and payable
What could block the formation of a valid contract? - CORRECT
ANSWERS✅✅Dishonesty with a Consumer or Customer
Misrepresentation of Facts or Statements
Fraudulent Inducement
Someone Lacks Mental Capacity
Underage
What does it mean to "educate the consumer before they consummate." - CORRECT
ANSWERS✅✅If a customer doesn't understand something in the contract, I should make an
effort to help them understand
If I don't know the answer to a term or condition on the contract I get upper management
involved to help explain it
It is my responsibility to understand the terms and conditions on the contracts I am
administering
Help the customer to understand the terms and conditions of the contract by clarifying key
items they have concerns with
What is the right of recission? - CORRECT ANSWERS✅✅The ability for a customer to get
out of a contract
What are the three (3) steps in contracting? - CORRECT ANSWERS✅✅Offer, Acceptance,
Consideration
A "Credit Sale" is considered _________ and a "Loan" is considered __________. -
CORRECT ANSWERS✅✅Dealer Assisted Financing; Customer Arranged Financing
According to the federal requirements under TILA Reg Z. When do we use APR? -
CORRECT ANSWERS✅✅As a disclosure on the installment contract
, Only in installment advertising, it is not required in lease ads
Printed dialog involving the finance charge
Conversations discussing the cost of credit
If a Dealer receives a cease and desist order for an ad they ran that violated the Truth in
Lending Act/Reg. Z. If the Dealer continues to run the ad, what are the potential penalties? -
CORRECT ANSWERS✅✅They could be required to pay a fine of up to $51,744 per day,
per violation
When it comes to negative equity, there are two mathematical computations we can use;
gross and net (netting). Which of the following are accurate.
The Gross format _____ math, the Net format _____ math. - CORRECT
ANSWERS✅✅does not require, requires
What is the TILA disclosure box comprised of? - CORRECT ANSWERS✅✅Payment
Schedule
Amount Financed
Total of the Payments
Total Sale Price
Finance Charge
APR
What are considered Triggering Terms on an installment advertisement? - CORRECT
ANSWERS✅✅Any finance charge
Amount of any payment
Contract term
Amount or percentage of any down payment
The total sale price is _______ the largest number on the installment contract. - CORRECT
ANSWERS✅✅Always
