E & J Corporation trading as City Auto Sales

Text (OCR of the scan at left; may contain errors)

IN THE l\IATTER OF E & J COHPOHATION TR.ADING AS CITY AUTO SALES ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\1l\IISSION ACT Docket 7911. CO1nlJlaint, June 19G(J-Dec;.sion, Oct. 19GO Consent order requiring used car dealers in 'Vashington, D. , to cease misrepresenting do\vn payments, monthly terms, and guarantees on their used cars, made by such typical statements in newspaper and radio advertising as " 00 Down No Money Down As Low as $15 Per 1\10. All Cars Guaranteed"

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that E & J Corporation, a corporation trading as City Auto Sales, and Arthur t Bisogne, also known as Sonny Bisogne, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGIL\PII 1. Respondent E & J Corporation, is a corporation organized and existing under and by virtue of the laws of the Dis- .

E & J CORP. ET AL. 1061 1060 Complaint is lo- trict of Columbia. Its office and principal place of business cated at 401 Massachusetts Avenue, N.",V., ",Vashington, D.C. Said corporation trades under the name of City Auto Sales. Respondent Arthur J. Bisogne, also known as Sonny Bisogne, is an officer and the principal stockholder of the respondent corporation. lie formulates, directs and controls the acts and practices of the corporate respondent, as hereinafter set forth. His business address is the same as that of the corporate respondent. PAR. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of used automobiles in the District of Columbia. Their vol., lime of business is substantial.

PAR. 3. In the course and conduct of their business, and for the purpose of inducing the sale of their used automobiles, respondents have made certain statements in newspapers published in the District of Columbia, and in radio broadeasts emanating from the District of Columbia, concerning their said automobiles and their method of doing business. Typical, but not an inclusive, of said statements are the following:

$1.00 Down No Money Down on Approved Credit $25 Down is an ~TOU Need to Ride No Money Down As Low as $15 Per l\Io, As Low as $5.00 Down All Cars Guaranteed Drive Today! Nothing Down. Ride Today No l\ioney Needed! Name Your Own Terms on a Guaranteed Automobile Delivered to You This Very Day, with Little or No :Money Down. . . . PAR. 4. Through the use of the aforesaid statements, respondents represent:

(a) That they sell used automobiles on credit accounts with little or no down payment.

(b) That their cars are guaranteed.

PAR. 5. Said statements and representations are false, misleading and deceptive. In truth and in fact:

(a) Respondents do not sell used cars on credit, with little or down payment. when a minimum or token sum is accepted by the respondents in connection with a car order or bill of sale, it is not in fact, a down payment but is received for the purpose of providing a consideration for a contract of purchase. Frequently, purchasers of respondents' used cars are required to contract for small loans, mostly with sources outside of the District of Columbia, in order to meet respondents' down payment requirements, in addi- Df'ci f,;i011 57 F.

bon to installment financing. The represented low monthly payments do not include said small loan charges. (b) Hespondents~ in most instances, sell their used cars "as is and no guarantee. or "warranty is made. In fact ~ a provision is incorporated in each car order and bill of sale to that effect. In those cases where a purported guarantee or warranty is made ~ it is limited in nature and the limitations are not fully disclosed. PAIL 6. In the conduct. of their business, at all times mentioned herein, respondents hate been in substantial competition, in commerce, with corporations, firms and individuals in the sa.le of used automobiles.

PAR. 7. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and prac.tices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were, and are, true and into the purchase of a substantial number of respondents' used automobiles by reason of said erroneous and mistaken belief. As a consequence thereof substantial trade in commerce has been, and is being, unfairly diverted to respondents from their competitors and substantial injury has thereby been, and is being, done. to c.ompetition in commerce.

PAR. 8. The aforesaid acts and practices of respondents, as herein alleged~ were, and are, all to the prejudice and injury of the public and of respondents' eompetitors and constituted, and now constitute. unfair and deceptive acts and practices and unfair methods of competition, in comme.rce~ within the intent and meaning of the Federal Trade Commission Act.

lib' . A 17W8 1Y. 1V iUia.m.s and 1111'. jlh~chaeZ P. Jiu:glw8 for the Commission.

11h' Ralph H. Dech:~elbau.m of ,Yashington, D. , for respondents. INITIAL DEClsIO~ BY J. EARL Cox, I-IEARI~G EXAl\IIXER The complaint charges respondents, who are engaged in the advertising. oflering for sale, sale and distribution of used automobiles in the District of Columbia, with yiohtion of the Federal Trade Commission Act, in that respondents hflH' mnc1e certain false misleading and deceptive statements in newspapers published in 1'11(' District of Columbia, and in radio bronc1cnsts emannting from the District of Columbia, concerning their snic1 automobiles and their method of doing business.

After the issuance of the compbint ~ responclent~ , their counsel. and connsel supporting the compbint entered into an agreemem &. . &.

E & J CORP. ET AL. 1063 1060 Order was approvedcontaining consent order to cease and desist, which by the Director, Associate Director, and Acting Assistant Direetor of the Commission s Bureau of Litigation, and thereafter transmitted to the I-Iearing Examiner for consideration. The agreement states that respondent E T Corporation is a corporation organized and existing under and by virtue of the laws of the District of Columbia, ",ith its office and principal place of business located at 401 :l\iassachusetts Avenue, N.,V., ,Vashington ; that said corporation trades under the name of City Auto Sales; and that respondent Arthur J. Bisogne, also known Sonny Bisogne, is an oflicer and the principal stockholder of the respondent corporation, his business address being the same as that of the c.corporate respondent.

that. respondents The agreement provides among other things, andadmit all the jurisdictional facts alleged in the complaint, agree that the record ma,y be taken as if findings of jurisdictional fads had been duly ma,de in accordanee with such allegations; that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and this agreement; that the agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission; that the complaint may be used in construing the terms of the order agreed upon, which may be altered, modified or set aside in the manner provided for other orders; that the agreement is for settlement purposes only and does not constitute an admission by respondents that they haxe violated the law as alleged in the complaint; and. that the order set forth in the agreement and hereinafter included in this decision shall have the same force and eflect as if entered after a full hearing. respondents waive any further procedural steps before the Hearing Examiner and the Commission, the making of findings of fad or conclusions of 1 a,,", and all of the rights they may have to challenge or contest the validity of the order to cease and desist entered in aecordance with the agreement.

aforesaid agree- The Hearing Examiner has determined that the ment containing the consent order to c.ease and desist provides for all appropriate disposition of this proc.eeding in the public int€rest and such agreement is hereby accepted. Therefore , a corpora- 1 t o7'(lc?' That respondents E T Corporation bon, trading as City A uta Sales, or under any other name, and its oflicers, and Arthur .J. Bisogne, also known as Sonny Bisogne, indi- , .and respondents vidually and as an officer of said corporation agents, representatives and employer,s, direc.tly or through any cor- Decision 57 F.

porate or other device, in connection with the offering for sale, sale or distribution of used automobiles in commerce, as "commerce defined in the Federal Trade Commission Act, do forthwith cease that:and desist from representing, directly or by implication, 1. Their used automobiles can be purchased with a minimum down payment of one dollar or any other amount not in accord with the facts;

2. Their used automobiles are guaranteed when no guarantee is given to the purchaser;

3. Their used automobiles are guaranteed unless the nature and extent of the guarantee and the manner in which the guarantor will perform thereunder are e1early and truthfully set forth: 4. Terms as low as $15.00 per month or any other amount per month are available to purchasers, unless such is the fact. DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE The hearing examiner on August 31 , 1960, having filed an initial decision in this proceeding wherein he acc.epted an agreement containing a consent order theretofore executed by the respondents and counsel in support of the complaint, and entered an order to cease and desist in conformity with said agreement; and The Commission by order entered October 12, 1960, having extended until further order the date on which the initial decision otherwise ,,' ould have become the decision of the Commission, and having now determined that said initial decision is adequate and appropriate to dispose of this matter:

I t is ordered That the hearing examiner s initial decision be, and it hereby is, adopted as the decision of the Commission. 1 t is fu.rther ordered That the respondents, E & J Corporation a c.orporation, and Arthur J. Bisogne, also known as Sonny Bisogne individually and as an officer of said corporation, shall, within sixty (60) days after service upon them of this order, file with the Commission a report, in ",writing, setting forth in detail the manner and the order contained in theform in which they have. c.complied with aforesaid initial decision.

TRIUMPH RECORDS INC. , ET AL. 1065 Complaint