United Lemak Furniture Co., Inc

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In roe Matrer oF UNITED LEMAK FURNITURE CO., INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE TRUTH IN LENDING ACTS Docket C-2063. Complaint, Oct. 13, 1971—Decision, Oct. 13, 1971 Consent order requiring a Los Angeles, Calif., furniture store to cease violating the Truth in Lending Act by failing to furnish customers with the instru- Complaint ment containing disclosures required by Sec. 226.8 of Regulation Z, failing to disclose the annual percentage rate, and to make all. other disclosures required by Regulation Z of said Act.

Complaint Pursuant to the provisions of the Truth in Lending Act and the regulations promulgated thereunder, 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 United Lemak Furniture Co., Inc., a corporation, and Louis Becker, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said, Acts, 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:

_ Paracrapu 1. Respondent United Lemak Furniture Co., Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its principal office and place of business formerly located at 5833 South Vermont Avenue, Los Angeles, California.

Respondent Louis Becker is president and jointly with his wife holds all the shares of said corporation. He formulates, directs and controls the policies, acts and practices of the corporation, including the acts and practices hereinafter set forth. His address is 269 East Gleason Street, Monterey Park, California. Par. 2. Respondents formerly for many years had been engaged in the offering for sale, sale, and distribution of furniture and other merchandise to the public through retail stores. Par. 3. In the ordinary course and conduct of their business, respondents regularly had extended consumer credit as “consumer credit” is defined in Regulation Z, the implementing regulation of the Truth in Lending Act, duly promulgated by the Board of Governors of the Federal Reserve System.

Par. 4. Subsequent to July 1, 1969, respondents, in the ordinary course and conduct of their business and in connection with their credit sales, as “credit sale” is defined in Regulation Z, had caused customers to execute retail installment conditional sales contracts. Respondents had made no other written disclosures in order to comply with the Truth in Lending Act. By and through the use of these contracts, respondents :

1. Failed to furnish the customer with a duplicate of the instrument containing the disclosures required by Section 226.8 or a statement 617 Decision and Order by which the required disclosures are made, as prescribed by Section 226.8(a) of Regulation Z.

2. Failed to disclose the annual percentage rate computed in accordance with the requirements of Section 226.5 of Regulation Z accurately to the nearest quarter of one percent, as prescribed by Section 226.8(b) (2) of Regulation Z.

Par. 5. By and through the acts and practices set forth above, respondents failed to comply with the requirements of Regulation Z, the implementing regulation of the Truth in Lending Act, duly promulgated by the Board of Governors of the Federal Reserve System. Pursuant to Section 103(q) of the Act, such failure to comply constitutes a violation of the Truth in Lending Act and, pursuant to Section 108 thereof, respondents have 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 respondents having been furnished thereafter with a copy of a draft of complaint which the Los Angeles Regional Office 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 Truth in Lending Act and the regulations promulgated thereunder; 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 Commmission’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 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 issues its complaint, makes the following jur isdictional findings, and enters the following order:

1. Respondent United Lemak Fur niture Co., Ine., is a corporation organized, existing and doing business under and by virtue Decision and Order 79 E.T.C.

of the laws of the State of California, with its office and principal place of business formerly located at 5833 South Vermont Avenue, Los Angeles, California. .

Respondent Louis Becker is president and jointly with his wife holds all the shares of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation and his address is 269 East Gleason Street, Monterey Park, California. 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 It is ordered, That respondents United Lemak Furniture Co., Ine., a corporation, and Louis Becker, 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 § 226) of the Truth in Lending Act (Public Law 90-321, 15 U.S.C. 1601 e¢ seg.) , do forthwith cease and desist from: _ _ Jd. Failing to furnish the customer with a duplicate of the instrument containing the disclosures required by Section 226.8 or a statement by which the required disclosures are made at the time’ those disclosures are made, as prescribed by Section 226.8 (a) of Regulation Z.

2. Failing to disclose the annual percentage rate computed in accordance with the requirements of Section 226.5 of Regulation Z accurately to the nearest quarter of one percent, as prescribed by Section 226.8(b) (2) of Regulation Z.

3. Failing in any consumer credit transaction or advertisement to make all disclosures, determined in accordance with Sections 226.4 and 226.5 of Regulation Z, in the manner, form and amount prescribed by Sections 226.6, 226.7, 226.8, 226.9, and 226.10 of Regulation Z.

It ts further ordered, That respondents deliver a copy of this order to cease and desist to all present and future personnel of respondents engaged in the consummation of any extension of consumer credit or in any aspect of preparation, creation or placing of advertising, and that respondents secure a signed statement acknowledging receipt of said order from each such person.

It is further ordered, That the respondents herein shall, within sixty 617 , Complaint (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. It is further ordered, That the respondents notify the Commission at least thirty (30) days prior to any proposed change in respondents’ business such as dissolution, assignment or sale resulting in the emergence of a successor business, corporate or otherwise, the creation of subsidiaries or any other change which may affect compliance obligations arising out of the order.

_ In ree Marrer or