Affiliate Broker Tennessee (TN PSI) National Practice Exam `

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Study for the Affiliate Broker Tennessee National Exam. Practice with flashcards and multiple choice questions, with hints and explanations. Prepare well for your licensing exam!

Practice this question and more.

Which of these statements is TRUE regarding truth in advertising violation penalties?

The Federal Trade Commission determines the severity based on the violation's severity.
State agencies handle all penalties.
Violations result in fixed penalties only.
Penalties are determined by the involved parties.

The correct answer is: The Federal Trade Commission determines the severity based on the violation's severity.

The statement that the Federal Trade Commission determines the severity based on the violation's severity is correct. The FTC plays a crucial role in enforcing truth-in-advertising laws and evaluates violations on a case-by-case basis. When assessing a violation, the FTC considers several factors, including the nature of the misleading information, the potential harm to consumers, and whether the violation is part of a broader pattern of deceptive practices. This flexible approach allows the FTC to impose appropriate penalties that reflect the specific circumstances of each case, ensuring that the enforcement of truth-in-advertising laws is effectively tailored to discourage dishonest marketing practices.