Dixie Furniture Company, Inc

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In tee Martrer oF DIXIE FURNITURE COMPANY, 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-2158. Complaint, March 1, 1972—Decision, March 1, 1972 Consent order requiring an Atlanta, Ga., firm selling furniture and appliances to cease violating the Truth in Lending Act by failing to use on its installment contracts the terms “cash price,” “cash downpayment,” “trade-in,” “total downpayment,” “amount financed” and other terms required by Regulation Z of said Act.

Complaint 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 Dixie Furniture Company, Inc., a corporation, and Warren N. Dukes and James W. Dukes, 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: Paracrarn 1. Dixie Furniture Company, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Georgia, with its principal office and place of business located at 457 Edgewood Avenue, Southeast, Atlanta, Georgia.

respondents Warren N. Dukes and James W. Dukes are officers of the corporate respondent. They formulate, direct and control the acts and practices hereinafter set forth. Their 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 sale of furniture and appliances to the public. Par. 3. In the ordinary course and conduct of their business, as aforesaid, respondents, in order to facilitate the sale of furniture and appliances, 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.

278 Complaint Par. 4, Subsequent to July 1, 1969, in the ordinary course of their business as aforesaid, and in connection with their credit sales, as “credit sale” is defined in Regulation Z, respondents have caused and are causing their customers to enter into contracts for the sale of respondents’ goods and services. On these contracts, hereinafter referred to as “the contract,” respondents provide certain consumer credit cost information. Respondents do not provide these customers with any other consumer credit cost disclosures. By and through the use of the 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 for cash the property or services which are the subject of the credit sale, 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 re- - quired 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 disclose the sum of the “cash downpayment” and the “trade-in,” and to describe that sum as the “total downpayment,” 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 of which the customer has the actual use, as required by Section 226.8(c) (7) of Regulation Z.

7. Fail to use the term “total of payments” to describe the sum of the payments scheduled to repay the indebtedness, as required by Section 226.8(b) (3) 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. In a number of instances understated the annual percentage rate by amounts ranging from .75 percent to 6.50 percent and thereby failed to disclose the annual percentage rate with an accuracy at least to the nearest quarter of one percent, computed in ac ‘cordance with Section 226.5(b) (1) of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z.

487-883—73——19 280 - FEDERAL TRADE COMMISSION DECISIONS Decision and Order 80 F.T.C.

10. Fail in certain instances to print the term “Annual Percentage Rate” more conspicuously than other prescribed terminology, as required by Section 226.6(a) of Regulation Z. ‘11. Fail in certain instances to print the term “finance charge” more conspicuously than other prescribed terminology, as required by Section 226.6(a) of Regulation Z.

12. Fail to identify the method of computing any unearned portion of the finance charge in the event of prepayment of the obligation, as required by Section 226.8(b) (7) of Regulation Z. 13. Fail to print numerical amounts as figures printed in not less than the equivalent of 10 point type, as required by Section 226.6(a) 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 violation of the Truth in Lending Act and the implementing regulation promulgated thereunder, and the Federal Trade Commission Act; and The respondents, their attorney, 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 278 . Decision and Order with the procedure prescribed in Section 2.34 of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: 1. Respondent Dixie Furniture Company, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Georgia, with its office and principal place of business located at 457 Edgewood Avenue, Southeast, Atlanta, Georgia. 7 Respondent Warren N. Dukes and James W. Dukes are officers of said corporation. They formulate, direct and control the policies, - acts and: practices of said corporation and their 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 ~ It is ordered, That respondents Dixie Furniture Company, Inc., and its officers, and Warren N. Dukes and James W. Dukes, individually and as officers of said corporation, and respondents’ agents, representatives and employees, directly or through any subsidiary or other 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 (Pub.L. 90-821, 15 U.S.C. 1601 et seqg.), do forthwith cease and desist from: 1. Failing to use the term “cash price” to describe the price at which respondents offer, in the regular course of business, to sell for cash the property or services which are 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 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 disclose the sum of the “cash downpayment” and the “trade-in,” and to describe that sum as the “total downpayment,” 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) (3) of Regulation Z. Decision and Order 80 F.C.

6. Failing to use the term “amount financed” to describe the amount of credit of which the customer has the actual use, as required by Section 226.8(c) (7) of Regulation Z. 7. Failing to use the term “total of payments” to describe the sum of the payments scheduled to repay the indebtedness, as required by Section 226.8(b) (3) 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 the sum as the “deferred payment price,” as required by Section 226.8(c) (8) (11) of Regulation Z.

9. 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(b)(1) of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z.

10. Failing to print the term “Annual Percentage Rate” more conspicuously than other prescribed terminology, as required by Section 226.6(a) of Regulation Z.

11. Failing to print the term “finance charge” more conspicuously than other prescribed terminology, as required by Section 226.6 (a) of Regulation Z.

12. Failing to identify the method of computing any unearned portion of the finance charge in the event of prepayment of the obligation, as required by Section 226.8(b) (7) of Regulation Z. 18. Failing to print numerical amounts as figures printed in not _ less than the equivalent of 10 point type, as required by Section 226.6(a) of Regulation Z.

14. 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 required by Sections 226.6, 226.7, 226.8, 226.9 and 226.10 of Regulation Z. lt is 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 respondent secure a signed statement acknowledging receipt of said order from each such person. lt is 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 respondent secure a signed statement acknowledging receipt of said order from each such person.

278 Complaint It 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 this 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.