Radigan Brothers, Incorporated

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In the Marrter or RADIGAN BROTHERS, INCORPORATED, ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE TRUTH IN LENDING AND THE FEDERAL TRADE COMMISSION ACTS Docket C-1927. Complaint, June 1, 1971—Decision, June 1, 1971 Consent order requiring a Gary, Ind., retailer of furniture to cease violating the Truth in Lending Act by failing to disclose in its credit transactions the annual percentage rate, the total of payments, the cash price, the cash downpayment, the unpaid balance, the amount financed, the deferred payment price, and other disclosures required by Regulation Z of said Act. ComMPLaAINT 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 Radigan Brothers, Incorporated, a corporation, and John B. Radigan, William J. Radigan and Joseph B. Radigan, individually, and.as officers 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: Paravcrarn 1. Radigan Brothers, Incorporated, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Indiana, with its principal office and place of business lecated at 637 Broadway Street, Gary, Indiana. Respondents John B. Radigan, William J. Radigan and Joseph B. Radigan are officers of the corporate respondent. They formulate. ae EADIGAN, BRUM EEN, te c7 prey mae “Complaint direct and ‘control the acts and: practices ‘pereinafter set, forth. Their - address is the game as: that of the corporate. respondent. . ne gag ged in the sale of furniture to the public. aforesaid; respondents, in: order to facilitate. the sale of furniture, ae regularly. extend or arrange for the extension of consumer credit. as “consumer credit” is defined i Regulation 4 Z, the implementing regucee Jation of the: Truth in 1 Lending Act, duly pr omulgated by the Board Hes of Governors of the Federal Reserve System. 8 a. Pare 4 ‘Subsequent to. July 1, 1969, respondents, in the “ordinary” course ‘and conduct.

: credit sales, as “credit sale” is ‘defined in’ Regulation Z, have caused — a id re: causing their customers to execute ‘Radigan Conditional Sale. ( contracts, hereafter yeferred to as “the contract.” Respondents make consumer: credit cost: disclosures other than on the contract. ar. 5. By and through the use of the contract, respondents: - dy Failed to. disclose the “Finance Charge” and the see Per- Bs centage Rate” more conspicuously than other requ uired | terminology, ® as: CES “required by. Secti on 226.6(a) of: Regul ation Z. (2) Failed to use ‘the term” “Total of Payihiento to. “aestribe the aS -sum of payments s scheduled to repay. the indebtedness, and in a ‘num-- “to disclose the number, amount and due dates” of periods “of pay oe “required by. Section.

996: 8(b) (8). of Regulation Z.

Respondents | are now cand. for some time: last past have - ee ~ Par. 3. In the ordinary. course. and. conduct of their ‘business, | as oS their business and. in connection with ‘their . scheduled to repay the indebtedness, as. : (8) Failed to use: ‘the term “Cash Price” to describe the price. at. gh oe the goods and services which are the subject of the transaction, as Treae ~ quired by Section 226. 8(c) (1). of Regulation Z Z. (A) ‘Failed to use the terms, “Cash Down Payment, ” epyade-In? a and “Total Down Pay -ment” to describe the down payment in money, ae spectively, as ‘required 1 in Section 226.8 (c) (2), of ‘Regulation’ Z. . — () Failed to: use the term “Unpaid Balance. of Cash Price” to : describe the difference between the cash price and the total down pay: ment, as. yequired in Section 996.8(c) (3), of: Regulation Z. amount of credit, extended, a s required: in Section. 226. 8(c) (7 dy of. Regulation 4 Vee yee (7) Failed t to. use the term “Defer red Payment “price” ‘to describe eh ‘the sum of the cash price, the finance char ge, and all other charges, : Fas required in Section 226.8(c) (8) (31) of | Regulation Le Be (8) Ina number of instances under stated that Annual Per ventage & the down payment: in property, and the sum of those two items, 1 re- en (6). ‘Failed to. use ‘the term “Amount. Financed” to: describe the fe 1114 FEDERAL TRADE COMMISSION. DECISIONS Decision and Order 18 E.T.C.

Rate by amounts ranging from 1 percent to 7.75 percent, and thereby failed to disclose the Annual Percentage Rate with an accuracy at least to the nearest quarter of 1 percent, computed in accordance with Section 226.5(b) (1) of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z.

Par. 6. Pursuant to Section 103(q) of the Truth in Lending Act, respondents’ aforesaid failures to comply with the provisions of Regulation Z constitute Violations of that Act and, pursuant to Section 108 thereof, respondents thereby violated the Federal Trade Commission Act, Decision anp Orprr The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents 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; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents 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 haying determined that it had reason to believe that the respondents have violated the said Act, 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 2.34(b) of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: 1. Respondent Radigan Brothers, Incorporated, is a corporation organized, existing and doing business under and by virtue. of the laws of the State of Indiana, with its office and principal place of business located at 637 Broadway, Gary, Indiana. Respondents John B. Radigan, William J. Radigan and Joseph B. Radigan are officers of the corporate respondent. They formulate, direct and control the policies, acts and practices of said corpora- AIRS: Bee ms et Decisions 1 3 1 1 2 1223 191 82 83 44.352325 ands 1 3 1 1 3 1312 191 115 78 67.481735 Order2 1 4 0 0 0 514 237 747 237 -1 3 1 4 1 0 0 514 237 747 237 -1 4 1 4 1 1 0 569 237 583 45 -1 5 1 4 1 1 1 569 237 583 45 95.000000 4 1 4 1 2 0 591 282 670 70 -1 5 1 4 1 2 1 591 282 670 70 95.000000 4 1 4 1 3 0 514 352 177 122 -1 5 1 4 1 3 1 514 352 177 122 95.000000 2 1 5 0 0 0 1851 157 252 607 -1 3 1 5 1 0 0 1851 157 252 607 -1 4 1 5 1 1 0 1886 157 211 82 -1 5 1 5 1 1 1 1886 157 211 82 95.000000 4 1 5 1 2 0 1851 239 250 122 -1 5 1 5 1 2 1 1851 239 250 122 95.000000 4 1 5 1 3 0 1917 423 186 66 -1 5 1 5 1 3 1 1917 423 186 66 95.000000 4 1 5 1 4 0 1893 489 210 172 -1 5 1 5 1 4 1 1893 489 210 172 95.000000 4 1 5 1 5 0 1925 661 178 103 -1 5 1 5 1 5 1 1925 661 178 103 95.000000 2 1 6 0 0 0 1119 240 770 122 -1 3 1 6 1 0 0 1119 240 770 122 -1 4 1 6 1 1 0 1119 240 770 122 -1 5 1 6 1 1 1 1119 301 38 30 13.026245 aoe5 1 6 1 1 2 1154 275 78 87 94.786064 thes 1 6 1 1 3 1236 275 105 51 64.657349 same5 1 6 1 1 4 1347 277 58 48 70.739304 as.5 1 6 1 1 5 1403 253 90 94 80.424423 ‘that5 1 6 1 1 6 1508 257 44 62 96.815735 of5 1 6 1 1 7 1561 248 70 93 90.928391 thes 1 6 1 1 8 1638 240 193 99 30.607811 corporate5 1 6 1 1 9 1847 243 27 88 18.407318 15 1 6 1 1 10 1852 252 37 41 96.873840 re2 1 7 0 0 0 1259 282 2 65 -1 3 1 7 1 0 0 1259 282 2 65 -1 4 1 7 1 1 0 1259 282 2 65 -1 5 1 7 1 1 1 1259 282 2 65 95.000000 2 1 8 0 0 0 514 352 1064 399 -1 3 1 8 1 0 0 514 352 1064 399 -1 4 1 8 1 1 0 763 352 698 37 -1 5 1 8 1 1 1 763 352 698 37 95.000000 4 1 8 1 2 0 929 389 534 49 -1 5 1 8 1 2 1 929 389 534 49 95.000000 4 1 8 1 3 0 514 438 952 51 -1 5 1 8 1 3 1 514 438 952 51 95.000000 4 1 8 1 4 0 514 489 1064 70 -1 5 1 8 1 4 1 514 489 1064 70 95.000000 4 1 8 1 5 0 514 559 816 30 -1 5 1 8 1 5 1 514 559 816 30 95.000000 4 1 8 1 6 0 595 589 569 111 -1 5 1 8 1 6 1 595 589 569 111 95.000000 4 1 8 1 7 0 837 700 334 51 -1 5 1 8 1 7 1 837 700 334 51 95.000000 2 1 9 0 0 0 581 305 226 117 -1 3 1 9 1 0 0 581 305 226 117 -1 4 1 9 1 1 0 581 305 226 117 -1 5 1 9 1 1 1 581 305 226 117 29.924019 pee2 1 10 0 0 0 631 324 1308 157 -1 3 1 10 1 0 0 631 324 1308 157 -1 4 1 10 1 1 0 631 324 1308 157 -1 5 1 10 1 1 1 631 426 5 2 16.115509 :5 1 10 1 1 2 660 429 19 34 21.561829 .5 1 10 1 1 3 696 421 64 60 35.438087 Thes 1 10 1 1 4 779 324 167 154 9.452148 ae5 1 10 1 1 5 947 347 46 93 1.682144 =5 1 10 1 1 6 1001 387 20 11 45.272224 au5 1 10 1 1 7 1432 347 198 74 0.000000 “aisdiction:5 1 10 1 1 8 1633 350 59 60 85.760513 of5 1 10 1 1 9 1699 340 60 63 96.968262 thes 1 10 1 1 10 1770 330 139 80 94.841446 subjects 1 10 1 1 11 1931 353 8 11 39.321800 :2 1 11 0 0 0 1383 392 670 93 -1 3 1 11 1 0 0 1383 392 697 93 -1 4 1 11 1 1 0 1383 392 670 93 -1 5 1 11 1 1 1 1383 403 148 76 87.088089 ondents,5 1 11 1 1 2 1539 419 91 63 66.652603 and.5 1 11 1 1 3 1630 417 69 44 94.052605 the.5 1 11 1 1 4 1706 407 204 78 93.610695 proceedings 1 11 1 1 5 1929 440 53 14 23.208832 ad5 1 11 1 1 6 2004 392 76 24 33.971046 Ae2 1 12 0 0 0 1061 489 824 128 -1 3 1 12 1 0 0 1061 489 824 128 -1 4 1 12 1 1 0 1061 489 824 128 -1 5 1 12 1 1 1 1061 612 37 2 95.000000 5 1 12 1 1 2 1605 489 280 128 95.000000 2 1 13 0 0 0 594 575 1482 572 -1 3 1 13 1 0 0 594 575 1487 560 -1 4 1 13 1 1 0 944 575 950 93 -1 5 1 13 1 1 1 944 633 67 49 90.977615 hats 1 13 1 1 2 1042 637 79 36 92.322327 respo5 1 13 1 1 3 1156 597 82 64 77.725739 lent,5 1 13 1 1 4 1238 580 179 76 0.000000 ‘Radigan5 1 13 1 1 5 1422 575 191 69 65.978867 ‘Brothers;5 1 13 1 1 6 1615 584 70 47 93.944260 Inc5 1 13 1 1 7 1707 581 187 57 0.000000 rporated,4 1 13 1 2 0 1153 635 772 79 -1 5 1 13 1 2 1 1153 665 69 47 96.382912 ands 1 13 1 2 2 1231 641 213 73 79.159409 ‘respondents5 1 13 1 2 3 1464 670 18 21 41.189781 «5 1 13 1 2 4 1475 650 104 47 93.117973 Johns 1 13 1 2 5 1585 646 46 37 90.831451 B.5 1 13 1 2 6 1634 636 160 53 16.712097 ‘Radigan,5 1 13 1 2 7 1822 635 103 51 89.994286 Wil-4 1 13 1 3 0 610 680 1382 101 -1 5 1 13 1 3 1 610 741 83 44 95.388405 liam5 1 13 1 3 2 703 737 42 39 91.175591 J.5 1 13 1 3 3 746 719 193 62 48.604717 ‘Radigan,5 1 13 1 3 4 932 726 94 52 77.176071 and.5 1 13 1 3 5 1156 717 56 38 0.231331 _B.5 1 13 1 3 6 1219 714 189 50 91.460991 Radigan,5 1 13 1 3 7 1407 691 247 61 53.529282 individually5 1 13 1 3 8 1660 690 77 52 61.707111 ands 1 13 1 3 9 1739 689 40 36 72.589722 ‘as5 1 13 1 3 10 1789 684 134 46 87.911636 officers5 1 13 1 3 11 1947 680 11 14 2.185356 ©4 1 13 1 4 0 634 734 1301 99 -1 5 1 13 1 4 1 634 796 20 32 70.729904 f5 1 13 1 4 2 672 786 96 44 51.042248 said’5 1 13 1 4 3 781 772 235 61 96.322433 corporation,5 1 13 1 4 4 1036 776 83 35 94.985428 ands 1 13 1 4 5 1132 770 126 47 91.784813 respon5 1 13 1 4 6 1282 762 90 57 67.263634 ents”5 1 13 1 4 7 1383 744 314 63 52.762482 representatives,5 1 13 1 4 8 1692 738 147 52 26.840691 agents:5 1 13 1 4 9 1847 734 88 41 68.818665 ‘and:4 1 13 1 5 0 611 790 1321 106 -1 5 1 13 1 5 1 611 833 203 63 96.763672 employees,5 1 13 1 5 2 841 833 144 50 96.005844 directly5 1 13 1 5 3 1012 827 44 41 95.340134 or,5 1 13 1 5 4 1071 819 160 52 91.528862 through5 1 13 1 5 5 1241 821 79 45 91.401733 any.5 1 13 1 5 6 1343 805 177 55 96.278488 corporate5 1 13 1 5 7 1547 813 39 33 88.932358 or5 1 13 1 5 8 1613 799 97 44 94.421463 others 1 13 1 5 9 1735 788 128 46 96.849121 device,5 1 13 1 5 10 1879 785 53 32 96.366447 in4 1 13 1 6 0 636 834 1440 105 -1 5 1 13 1 6 1 636 891 169 48 92.028168 connections 1 13 1 6 2 822 913 11 14 23.767090 |5 1 13 1 6 3 831 879 102 48 66.031052 with.5 1 13 1 6 4 940 893 65 31 93.511345 any.5 1 13 1 6 5 1020 869 190 56 68.039268 extensions 1 13 1 6 6 1208 862 51 41 60.089565 ‘of5 1 13 1 6 7 1273 864 181 48 94.828888 consumers 1 13 1 6 8 1457 844 137 47 53.995762 ‘credits 1 13 1 6 9 1598 856 45 26 69.777618 or’5 1 13 1 6 10 1657 847 67 53 86.157997 any5 1 13 1 6 11 1744 834 196 54 35.480141 advertise-:5 1 13 1 6 12 1973 829 103 40 20.310829 Lee4 1 13 1 7 0 594 885 1367 105 -1 5 1 13 1 7 1 594 937 124 46 33.667618 “ments 1 13 1 7 2 727 936 41 51 96.916496 to5 1 13 1 7 3 769 932 86 58 90.067268 aid,5 1 13 1 7 4 862 922 154 65 96.883774 promotes 1 13 1 7 5 1027 928 45 41 91.726685 or5 1 13 1 7 6 1081 920 105 47 91.726685 assists 1 13 1 7 7 1201 908 137 57 64.167686 directly5 1 13 1 7 8 1360 914 48 41 84.327324 or:5 1 13 1 7 9 1416 892 181 57 96.341537 indirectly5 1 13 1 7 10 1616 898 70 44 94.955421 any5 1 13 1 7 11 1699 886 179 56 95.823975 extensions 1 13 1 7 12 1891 885 42 33 53.409683 of4 1 13 1 8 0 629 936 1406 105 -1 5 1 13 1 8 1 629 990 174 51 76.305824 consumers 1 13 1 8 2 814 982 134 44 60.866127 credit,5 1 13 1 8 3 949 988 46 37 95.136620 as5 1 13 1 8 4 1016 970 194 53 53.762207 “consumers 1 13 1 8 5 1224 963 128 45 74.715454 credit”5 1 13 1 8 6 1401 955 57 41 76.376297 ands 1 13 1 8 7 1471 937 313 65 51.324097 éadvertisement”5 1 13 1 8 8 1796 939 63 42 93.152618 ares 1 13 1 8 9 1860 936 105 42 2.068871 dé--5 1 13 1 8 10 1990 925 91 47 0.000000 ee4 1 13 1 9 0 598 979 1402 106 -1 5 1 13 1 9 1 598 1055 2 2 4.980133 ~5 1 13 1 9 2 616 1042 154 39 86.607140 fined5 1 13 1 9 3 731 1038 42 55 86.607140 in5 1 13 1 9 4 787 1021 206 64 96.726212 Regulations 1 13 1 9 5 1012 1021 39 42 88.334915 Z5 1 13 1 9 6 1063 1022 69 53 62.876469 (125 1 13 1 9 7 1136 1019 95 45 95.380188 CFR5 1 13 1 9 8 1249 1007 83 55 95.558136 Parts 1 13 1 9 9 1353 1006 94 57 11.823509 226) of the Truth in Tending ct (Public. Law 90-221, 15 U; S.C. 160: ot eg.) do forthwith conse and desist: from:

ed Failing to. disclose th ns finance Charge” and se ; “nual 1 ‘Percentage Rate,” where. ‘pequired to be used, more conjuired, terminology, as required by. See- ee = 3 corpor eee : fn “Total of “Payments” to eseribe ae . the sum of ‘payment 8 duled to repay the indebtedness, | or a failing to disclose the num aber, amount, and due dates of periods rie : of ‘payments: sc ed to repay: the indebtedness, 8 as required by. Section: 226. 8(b) (3) of Regulation Le. . eae 3. Failing to use the term “Cash Price” ‘to “geseribe the price BEES Poa of the goods and services which are.the subject ¢ of the transaction, oe as required by Section 226. 8(c) (1). of Regulation Z. 7 4. Failing to. use the: terms “Cash: Down | Payment, » «“Trade- In” and “Total Down Payment,” to. escribe any down payment ‘ in money, any down payment in property @ and the sum. ‘of these. two items, pespectivelys as vequired by. Section § 996. 8(¢) (2) of Regulation Ze ' Me 5. Failing: to use the term om “Unpaid Balance of Cash Price” ee to describe the difference between the cash price and the total : 5 Section 226. 8(e) (3) i ff R aula ee —s Failing to use rm © Amount Financed?5 1 36 1 1 5 1726 2181 29 46 19.249115 »5 1 36 1 1 6 1760 2175 66 63 72.860802 to.5 1 36 1 1 7 1826 2158 162 73 63.853191 “describes 1 36 1 1 8 2005 2190 73 29 10.606155 cd4 1 36 1 2 0 1321 2233 754 101 -1 5 1 36 1 2 1 1321 2264 56 60 1.766602 a85 1 36 1 2 2 1380 2256 173 78 82.158981 required5 1 36 1 2 3 1554 2248 57 74 96.666939 by5 1 36 1 2 4 1617 2250 140 72 96.285568 Sections 1 36 1 2 5 1765 2233 73 79 74.569771 226.5 1 36 1 2 6 1840 2240 77 75 45.059326 8(c)5 1 36 1 2 7 1922 2236 64 74 0.000000 )5 1 36 1 2 8 2008 2235 67 13 30.177734 ae2 1 37 0 0 0 1991 2243 111 78 -1 3 1 37 1 0 0 1991 2243 111 78 -1 4 1 37 1 1 0 1991 2243 111 78 -1 5 1 37 1 1 1 1991 2243 111 78 95.000000 2 1 38 0 0 0 695 2297 1320 161 -1 3 1 38 1 0 0 695 2297 1348 133 -1 4 1 38 1 1 0 695 2297 611 92 -1 5 1 38 1 1 1 695 2347 113 45 64.910538 of5 1 38 1 1 2 804 2297 213 92 0.000000 “Ragntetion5 1 38 1 1 3 1047 2352 17 14 53.677376 25 1 38 1 1 4 1039 2334 50 46 19.223671 Ze5 1 38 1 1 5 1271 2338 35 23 24.998947 ue5 1 38 1 1 6 2002 2316 27 15 27.232803 fs4 1 38 1 2 0 790 2308 1225 150 -1 5 1 38 1 2 1 790 2389 45 60 72.392563 1.5 1 38 1 2 2 847 2387 141 71 94.228142 Failing5 1 38 1 2 3 1007 2387 16 65 57.948830 |5 1 38 1 2 4 1017 2389 38 53 96.920341 to5 1 38 1 2 5 1074 2376 59 39 60.708492 mse5 1 38 1 2 6 1151 2344 71 76 92.633003 thes 1 38 1 2 7 1231 2370 96 56 73.377335 terms 1 38 1 2 8 1296 2324 2 2 88.117424 n5 1 38 1 2 9 1353 2323 182 115 26.280731 Deferred5 1 38 1 2 10 1546 2320 172 117 92.853378 Payments 1 38 1 2 11 1734 2310 141 111 62.281029 Price”5 1 38 1 2 12 1881 2334 42 65 96.502258 to5 1 38 1 2 13 1930 2308 67 92 23.302551 ae5 1 38 1 2 14 2009 2343 34 23 30.812393 oy2 1 39 0 0 0 606 2422 586 179 -1 3 1 39 1 0 0 606 2422 586 179 -1 4 1 39 1 1 0 606 2422 586 179 -1 5 1 39 1 1 1 606 2422 586 179 95.000000 Decision ana Order 78 F.T.C.

scribe the sum of the cash price, the finance charge, and all other charges, as required by Section 226.8(¢) (8) (ii) of Regulation Z. 8. Failing to disclose the Annual Percentage Rate with an accuracy at least 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. 9. Failing, in any consumer credit transaction or advertisement, to make all disclosures, determined in accordance with Section 226.4 and Section 296.5 of Regulation Z, in the manner, form and amount required: by Sections 226.6, 226.7, 226.8, 296.9 and 226.10 of Regulation Z.

Tt is further ordered, That respondents shall deliver a copy of this order to cease and desist. to all present and future salesmen or other persons engaged in the sale of respondents’ products or services, and shall secure from each such salesman or other person a signed statement acknowledging receipt of a copy of this order. lt is further ordered, That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting 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. lt is further ordered, That the respondents herein 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 this order.