Three "B" Motors, Inc., et al.

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

Complaint 79 ETC.

ually and as manager of said corporation, hereinafter referred to as respondents, have violated the provisions cf 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: Panacrary 1. Respondent Three “B” Motors, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Florida, with its principal office and place of business located at 501 N.W. 36th Street, Miami, Florida. Respondent Joseph C. Barger is manager of the corporate 1espondent. He formulates, directs and controls the policy, acts and practices of the corporation, including the acts and practices hereinafter set forth. His 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 offering for sale and retail sale and distribution of used cars to the public.

Par. 3. In the ordinary course and conduct of their business as aforesaid, respondents regularly extend 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 of business as aforesaid, and in connection with consumer credit sales, as “consumer credit” and “credit sale” are defined in Regulation Z, have caused and are causing customers to execute a binding Used Car Order Contract, hereinafter referred to as the “Order Contract.” Respondents have caused and are causing customers to also sign a Florida Conditional Sales Contract, hereinafter referred to as the “Sales Contract.” Respondents do not provide these customers with any other consumer credit cost disclosures. By and through the use of the Order Contract and the Sales Contract, respondents:

1. Fail to use the term “cash price” to describe the price at which respondents offer, in the regular course of business, to sell the vehicle for cash, as required by Section 226.8(c) (1) of Regulation Z. 2. Fail to use the term “cash downpayment.” to describe the downpayment in money made in connection with the credit sale, as required by Section 226.8(c) (2) of Regulation Z.

3. Fail to use the term “trade-in” to describe the downpayment in property made in connection with the credit sale, as required by Section 226.8(c) (2) of Regulation Z.

4, Fail to use the term “total downpayment” to describe the sum of Ataaveusy a AVR AAU) BET ey te meee vu 929 Decision and Order the cash downpayment and the trade-in, as required by Section 226.8 _(c)(2) of Regulation Z.

5. Fail to use the term “unpaid balance of cash price” to describe the difference between the cash price and the total downpayment, as required by Section 226.8(c) (3) of Regulation Z. 6. Fail to use the term “amount financed” to describe the amount of credit extended, as required by Section 226.8(c)(7) of Regulation Z.

7. Fail to use the term “finance charge” to describe the sum of all charges required by Section 226.4 of Regulation Z to be included therein, as required by Section 226.8(c) (8) (i) of Regulation Z. 8. Fail to disclose the sum of the cash price, all charges which are included 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.

9. Fail to disclose the “annual. percentage rate” determined in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z.

10. Fail to disclose the number of payments scheduled to repay the indebtedness, as required by Section 226.8(b) (3) of Regulation Z. 11. Fail to use the term “total of payments” to describe the dollar amount of the sum of payments scheduled to repay the indebtedness as required by Section 226.8(b) (3) of Regulation Z. 12. Retain a security interest in property in connection with the credit sale and fail to describe the type of security interest as required by Section 226.8(b) (5) of Regulation. Z. 18. Fail to identify the method of computing any unearned portion of the finance charge in the event of prepayment, as required by Sec- - tion 226.8(b) (7) of Regulation Z.

Par. 5. 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 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 respondents having been furnished thereafter with a copy of a draft of complaint which the Atlanta Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with viola- Decision and Order 79 FTC.

tion of the Truth in Lending Act and the implementing regulation promulgated thereunder, and 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 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 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Three “B” Motors, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Florida, with its office and principal place of business located at 501 N.W. 36th Street, Miami, Florida. Respondent Joseph C. Barger is an individual and manager of Three “B” Motors, Inc. He directs, formulates and controls the acts and practices of the respondent corporation including the acts and practices under investigation.

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 Three “B” Motors, Inc., a corporation, and its officers, and Joseph C. Barger, individually and as manager 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:

Decision and Order - 1. Failing to use the term “cash price” to describe the price at which respondents, in the regular course of business offer to sell for cash the property or service which is the subject of the credit sale, as required by Section 226.8(c) (1) of Regulation Z. 2. Failing to use the term “cash downpayment” to describe the downpayment i in money made in connection with the credit sale, as required by Section 226.8(c) (2) of Regulation Z. 3. Failing to use the term “trade-in” to describe the downpayment in property made in connection with the credit sale, as required by Section 226.8 (c) (2) of Regulation Z. 4, Failing to use the term “total downpayment” to describe the sum of the cash downpayment and the trade-in, as required by Section 226.8 (c) (2) of Regulation Z. 5. Failing to use the term “unpaid balance of cash price” to . describe the difference between the cash price and the total downpayment, as required by Section 226.8(c) (8) of Regulation Z. 6. Failing to use the term “amount financed” to describe the amount of credit extended, as required by Section 226.8 (c) (7 ) of Regulation Z.

7. Failing to use the term “finance charge” to describe the sum of all charges required by Section 226.4 of Regulation Z to be included therein, as 3 required by. Section 226.8 (c) (8) (i) of Regulation Z.

8. Failing to disclose the sum of the cash price, all charges which are included 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. 9. Failing to disclose the ‘ ‘annual percentage rate,” determined in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z.

10. Failing to disclose the number of payments scheduled to repay the indebtedness, as required by Section 226.8(b) (3) of Regulation Z.

11. Failing to use the term “total of payments” to describe the dollar amount of the sum of payments scheduled to repay the indebtedness, as required by Section 226.8(b) (3) of Regulation Z.

12. Failing to describe the type of security interest, as required by Section 226.8(b) (5) of Regulation Z.

18. Failing to identify the method of computing any unearned portion of the finance charge in the event of prepayment, as required by Section 226.8(b) (7) of Regulation Z. 934. FEDERAL TRADE COMMISSION DECISIONS Complaint 79 B.T.C.

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

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