Pool City, Inc

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

In toe Matrer or POOL CITY, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE TRUTH IN LENDING AND THE FEDERAL TRADE COMMISSION ACTS Docket C-1813. Complaint, Oct. 26, 1970—Decision, Oct. 26, 1970 Consent order requiring a Chevy Chase, Md., corporation engaged in the construction and sale of residential swimming pools to cease violating the Truth in Lending Act by failing to disclose in terminology prescribed by Regulation Z the annual percentage rate, all charges included in the deferred payment price, the number of payments required, and all applicable disclosures required; and also to cease making statements that there is no charge for credit unless it states the cash price, the amount of downpayment, the number, amount, and due date of the payments, the finance charge in annual percentage rate, and the deferred payment charge. : CompLaINntT Pursuant to the provisions of the Truth in Lending Act and the implementing regulation promulgated thereunder, and the Federal Trade Commission Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Pool City, Inc., a corporation, and Norman Schulman, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and -implementing. regulation, 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:

Paracrapi 1. Respondent Pool City, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Maryland, with its principal office and place of business located at 5454 Wisconsin Avenue, Chevy Chase, Maryland. Respondent Norman Schulman is an officer of the corporate 1 respondent. He formulates, directs and controls the policies, acts and practices of the corporation, including the acts and. practices, herein- Complaint 7 BTC after set forth. His address is the same as that of the corporate respondent. | Par. 2. Respondents are now and for some time have been engaged in the construction, advertising, offering for sale, and sale of residential swimming pools to the public.

Par. 3. In the ordinary course of their aforesaid business, respondents regularly extend and arrange for the extension of consumer credit, as “consumer credit” and “arrange for the extension of credit” are defined in Regulation Z, the implementing regulation of the Truth in Lending Act, duly promulgated by the Board of Governors of the Federal Reserve Syetem.

Par. 4. Subsequent to July 1, 1969, in the ordinary course of their -aforesaid business, and in connection with their credit sales, as “credit sale” is defined in Regulation 4, respondents have caused and are causing their customers to enter into contracts for the sale of respondents’. goods and services. Respondents have furnished customers with disclosure statements, hereinafter referred to as “the statement,” containing certain consumer credit cost disclosures. Respondents do not provide to customers on any document other than the statement the credit cost disclosures which are required to be made by Section 226.8 of Regulation Z. oo By and through use of the statement, respondents : 1. Fail to disclose the “annual percentage rate” acurately to the nearest quarter of one percent, in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z. 2. Fail to disclose the correct amount of the “deferred payment price,” which is the sum of the cash price, all charges included in the amount financed but which are not part of the finance charge, and the finance charge, as required by Section 226.8(c) (8) (ii) of Regulation Z.

3. Fail to disclose the number of payments scheduled to repay the indebtedness, as required by Section 226.8(b) (8) of Regulation Z. Par. 5. Subsequent to July 1, 1969, in the ordinary course of their business, respondents have caused to be published advertisements for their goods and services, as “advertisement” is defined in Regulation Z. These advertisements aid, promote, or assist directly or indirectly extensions of consumer credit in connection with the sale of these goods and services. Through these advertisements, respondents by representing “No Cash Needed,” state indirectly that no downpayment is required in connection with a consumer credit transaction, without also stating all of the following terms, in terminology pre- -POOL CITY, INC., ET.AL. 144} 1439 Decision and Order, scribed under Section 226.8 of Regulation Z, as required by Section 226.10(d) (2) thereof:

1. The cash price, 2. The number, amount, and due dates or period of payments scheduled to repay the indebtedness if the eredit is extended; 3. The amount of the finance charge expressed as an annual percentage rate; and , 4. The deferred payment price.

Par. 6. Pursuant to Section 105 of the Truth in Lending Act, respondents’ aforesaid failures to comply with the provisions .of Reonlation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have thereby violated the Federal Trade Commission Act.

Decision and ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to ‘present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act, the Truth in Lending Act and the implementing Regulation promulgated thereunder; and , The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in Section 2.84(b) of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: (1) Respondent Pool City, Inc., is a corporation organized, exist- 1442 FEDERAL ‘TRADE COMMISSION DECISIONS Decision and Order TT E.TC.

ing and doing business under and by virtue of the laws of the State of Maryland, with its offices and principal place of business located at 5454 Wisconsin Avenue, Chevy Chase, Maryland. Respondent Norman Schulman is an officer of said corporation. He formulates, directs, and controls the policies, acts and practices of said corporation and his address is the same as that of said corporation.

(2) The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER Lt is ordered, That respondents Pool City, Inc., a corporation, and its officers, and Norman Schulman, individually and as an officer of said corporation, and respondents’ agents, representatives and employees, directly or through any corporate or other device, in connection with any extension of consumer credit or any advertisement to aid, promote, or assist directly or indirectly any extension of consumer credit, as “consumer credit” and “advertisement” are defined in Regulation Z (12 CFR Part 226) of the Truth in Lending Act (Public Law 90-321, 15 U.S.C. 1601 et seq.), do forthwith cease and desist from:

1. Failing, in any consumer credit transaction, to disclose the annual percentage rate accurately to the nearest quarter of one percent, computed in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z. 2. Failing, in any consumer credit transaction, to disclose accurately the sum of the cash price, all charges which are ineluded in the amount financed but which are not part of the finance charge, and the finance charge, and to describe that sum as the “deferred payment price,” as required by Section 226.8(c¢) (8) (ii) of Regulation Z.

3. Failing, in any consumer credit transaction, to disclose the number of payments scheduled to repay the indebtedness, as requived by Section 226.8 (b) (3) of Regulation Z. | 4. Failing, in any consumer credit transaction, to make all applicable disclosures required to be made by Section 226.8 of Regulation Z, in the form and manner prescribed therein. 5. Stating, in any advertisement, the amount of the downpayment required or that no downpayment is required. the amount of any installment payment, the dollar amount of any finance charge, the number of installments or the period of repayment, or that there is no charge for credit, unless it states CENTURY BRICK CORP. OF AMERICA, wi an. ae 1439 Decision and Order all of the following items in terminology prescribed under Section 226.8 of Regulation Z, as required by Section 226.10(d) (2) of Regulation Z:

(a) The cash price;

(b) The amount of the downpayment required or that no downpayment is required, as applicable ; (c) The number, amount, and due dates or period of payments scheduled to repay the indebtedness if the credit is extended ;

(d) The amount of the finance charge expressed as an annual percentage rate; and (e) The deferred payment price.

6. Failing, in any advertisement, to make all disclosures in the manner, form and amount required by Section 226.10 of Regulation Z.

It is further ordered, That a copy of this order to cease and desist be delivered to all present and future personnel of respondents engaged in the consummation of any consumer credit transaction or any aspect of preparation, creation, or placing of advertising, and failing to secure from each such person a signed statement acknow!edging receipt of said order.

Tt is further ordered, That respondents notify the Commission at least thirty (80) days prior to any proposed change in the corporate respondent, such as dissolution, assignment, or sale resultant in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of the order. It is further ordered, That respondents 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 form in which they have complied with the order to cease and desist contained herein.