Parade Furniture, Inc., et al.

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PARADE FURNITURE, 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-2262. Complaint, July 27, 1972—Decision, July 27, 1972. Consent order requiring a Buffalo, New York, retailer of furniture, appliances, and other merchandise, among other things, to cease violating the Truth in Lending Act by failing to disclose to customers the annual percentage rate, the total number of payments, the method of computing penalty charges, the cash price, and other disclosures required by Regulation Z of the said ‘Act. Respondent is further required to include on the face of its notes a notice that any subsequent holder takes the note with all conditions of the contract evidencing the debt.

ComMPpLaInT 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 Parade Furniture, Inc., a corporation, and Meyer Sanin, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of the said Acts and régulations, and it:appearing to the Commission that a proceeding by 3 it in PARADE FURNITURE, INC., ET AL. 189 188 Complaint.

respect thereof would be in the public interest, hereby issues its com- Plaint stating its charges in that respect as follows: - ParacrapH 1. Respondent Parade Furniture, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal office and only place of business located at 1041 Genesee Street, Buffalo, New York. Respondent Meyer Sanin is the president and treasurer of the corporate re-. spondent. He. formulates, directs and controls the. policies, acts and practices of the corporate respondent, 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 past have been, engaged inthe sale. of furniture,. appliances, .and other merchandise to the public.

Par. 8. In the ordinary course and conduct. of their ‘business; ‘as aforesaid, respondents regularly extend and arrange for the extension of 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. Respondents many times, in the course of their business, negotiate to third parties installment sales contracts or other instruments of indebtedness executed in connection with credit purchases. Par. 5. Subsequent to July 1, 1969, respondents, in the ordinary course of their business as aforesaid, and in connection with the financing of their own credit sales as “credit sale” is defined in Regulation Z, have caused, and are causing, customers to execute Retail Installment Contracts, hereinafter referred to as “The Contract.” 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” as defined in Section 226.2 (i) of Regulation Z, to describe the purchase price of furniture, appliances, or other merchandise, as required by Section 226.8(c) (1) of Regulation Z.

[2] 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.

[3] 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. [4] Fail to disclose the sum of the cash price, all charges which are Decision and Order 81 ¥F.T.C.

not 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) (31) of Regulation Z.

_ [5] Fail to use the term “annual: percentage rate”-as defined in Section 226.2(e) of Regulation Z, to describe the annual percentage’ rate of the finance ‘charge computed in accordance’ with Section 226.5 of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z: [6] Fail to disclose the annual percentage rate, computed in accordance with Section 226.5 of Regulation Z, as required by Section 226. 8 (b) (2) of Regulation Z.

[7] Fail to print: “annual percentage rate” more conspiciously than other required terminology,’ as. prescribed’ by Section 226. 6 (a) of Regulation Z.

[8] Fail to use the term! “total of payments” to desctibe the sum of the payments scheduled to repay the indebtedness, as required by Section 226.8(b) (8) of Regulation Z.

[9] Fail to disclose the number of payments scheduled to repay the indebtednéss, as required by Section 226.8(b) (3) 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 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 Cleveland 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 regulations promulgated thereunder and 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 Jaw has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s rules; and PARADE, FURNITURE, INC., ET AL. 191 188 : Decision and Order 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 i issues its complaint, makes the following’ jurisdictional findings, and enters the following order:

1. Respondent Parade Furniture, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business located at 1041 Genesee Street, Buffalo, New York. Respondent Meyer Saziin is the president.and treasurer of the corporate respondent. He formulates,’ directs. and controls the acts and practices. of said corporation.

2. The Federal: Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents a and. the proceeding isin n the public interest.

‘ORDER. .

It is ordered, That respondents Parade Furniture, Inc., a corporation, and Meyer Sanin, individually and as an officer of said corporation, its successors and assigns, and respondents’ officers, agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with any extension or arrangement for the 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 C.F.R. § 226) of the Truth in Lending Act (Pub. L. 90-821, 15 U.S.C. 1601 e¢ seg.), do forthwith cease and desist from: 1. Failing to use the term “cash price,” as defined in Section 226.2(i) of Regulation Z, to describe the purchase price of furniture, appliances, or other merchandise as required by Section 226.8(c) (1) of Regulation Z.

2. 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.

3. 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 required by Section 226.8(c) (8) (i) of Regulation Z.

Detision and Order 81 F.T:C.

4. Failing’ to disclose the sum of the cash price, all charges which are not 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.

5. Failing to use the term “annual percentage rate” as defined in Section 226.2(e) of Regulation Z; to describe the annual percentage rate of the finance charge computed i in accordance with Section 226.5 of Regulation Zs as required by Section 226.8(b) (2) of Regulation Z..

6. Failing to disclose the annual ‘percentage rate, computed i in accordance. with Section 226.5 of Regulation Z, as $ required by Section 226, 8(b) (2) of Regulation Z.

%. Failing to print “annual percentage rate” more conspicu- ' ously than other required terminology, as prescribed by Section _ 226.6(a) of Regulation Z.

8: 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) (8) of Regulation Z. 9. Failing to disclose the number of payments scheduled to repay the indebtedness, as required by Section 226.8(b)(3) of Regulation Z.

10. Failing in any consumer credit transaction or advertising, to make all disclosures determined in accordance with Sections 226.4 and 226.5 of Regulation Z, at the time and in the manner, form, and amount required by Sections 226.6, 226.7, 226.8, 296.9 and 226.10 of Regulation Z.

li is further ordered, That respondents cease and desist from: Assigning, selling, or otherwise transferring respondents’ notes, contracts, or other documents evidencing a purchaser’s indebted-. ness, unless any rights or defenses which the purchaser has and may assert against respondents are preserved and may be asserted against any assignee or subsequent holder of such note, contract, or other documents evidencing the indebtedness. It is further ordered, That respondents cease and desist from: Failing to include the following statement clearly and conspicuously on the face of any note, contract, or other instrument of indebtedness executed by or on behalf of respondents’ customers: NOTICE Any holder takes this instrument subject to the terms and conditions of the contract which gave rise to the debt evidenced hereby, any contractual provision or other agreement to the contrary notwithstanding. - INDOGREEN ENTERPRISE 193 193 Complaint It 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 respondents secure a signed statement acknowledging receipt of said order from each such person.

It is further ordered, That respondent, for purposes of notification only, 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 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.