Cal-Roof Wholesale, Inc

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

In rue Matrer or CAL-ROOF WHOLESALE, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD 'TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2367. Complaint Oct. 30, 1972—Decision, Oct. 30, 1972 Consent order requiring a Portland, Oregon, wholesaler and distributor of building materials, including residential siding products, among other things to cease misrepresenting any aspect of contests or other promotional schemes or devices; misrepresenting the quality or properties of its siding or other building products; and representing that its products are guaranteed unless pertinent information with respect thereto is clearly ‘and conspicuously disclosed.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Cal-Roof Wholesale, Inc., a corporation, and Morris Greenstein, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, 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:

Paracraru 1. Respondent Cal-Roof Wholesale, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Oregon, with its principal office and place of business located at 110 S.E. Taylor, Portland, Oregon. Respondent Morris Greenstein is an officer of the corporate respondent. He formulates, directs and controls the acts and practices herein described. His business address is the same as that of the corporate respondent. « 678 . FEDERAL. TRADE. COMMISSION. DECISIONS... ; Complaint 39 -81 FY, Cc.

dent such as dissolution, assignment or sale resulting in 1 the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change i in the corporation. which may, affect compliance obligations arising out. of the order.

. £t ts. further. ordered, That 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. _In ‘THE: ‘Maren, OF FABBIS, INC, ET AL., porn BUSINESS AS. ROCHESTER - PLUMBING AND HEATING CONTRACTORS - ORDER, OPINION, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE ‘FEDERAL TRADE COMMISSION ‘AND THE TRUTH IN LENDING ‘ACTS Docket 8838. Complaint, Jan. 18; 1971:—Dedision Oct: 80, 1972. Order requiring a Rochester, New York: ‘firm engaged in the sale of plumbing and heating equipment ‘and installation‘ sérvices to the public, among other things to cease violating the Truth ‘in Lending Act by failing to provide each customer with a notice of the right to rescind prior to consummation of the transaction; making any physical changes in, customer’s property or performing any work on such property before expiration of the rescission period; and failing to make any other necessary disclosures as required by Regulation Z of the 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 Fabbis, Inc., a corporation, doing business as Rochester Plumbing and Heating Contractors, and Richard J. Fabrizi and James J. Rebis, individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and 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: Paracrapy 1. Respondent Fabbis, 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 -FABBIS, .INC.; BY. AL. f2 028). 679 678 . Complaint located at,.123 Barberry. Terrace, Rochester, New York. It.is. doing business under the.name of Rochester Plumbing. and Heating Contractors.

Respondents Richard J. Fabrizi and James J. Rebis are officers of said corporation. They formulate, direct and control the policies, acts and practices of said corporation, including the acts and practices hereinafter set forth. Their address is the same as that. of the corporate respondent.

Par. 2. Respondents a are now, and for some.time last past have been, engaged in the sale of plumbing and heating equipment: and. installation services to the public.

Par. 3. In the ordinary course and conduct of their business as aforesaid, respondents arrange, and. for some time last past regularly have arranged, 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. Subsequent to July 1, 1969, respondents in the ordinary course and conduct of their business and in connection with their arranging for consumer credit, have caused, and are causing, customers to execute retail installment contracts, herein referred to as “the contract,” which results or may result in a security interest being retained or acquired in real property which is used or is expected to be used as the principal residence of the customer. The customers thereby have the right to rescind such transactions, 'as provided in Section 226.9(a) of Regulation Z.

Par. 5. In connection with the consumer credit transactions set forth in Paragraphs Three and Four hereof, respondents prepare documents containing consumer credit cost disclosures required by ‘Section 226.8 of Regulation Z and obtain from customers written acknowledgment of receipt of these disclosures, but in some instances nevertheless fail to provide the customer with a copy of such disclosures, as required by Section 226.8(a) of Regulation Z.

Par. 6. In connection with the consumer credit transactions set forth in Paragraphs Three and Four hereof, respondents complete notices of the right of rescission in the form required by Section 226.9(b) of Regulation Z and obtain from customers written acknowledgment. of receipt of these notices, but in some instances nevertheless fail to provide each customer who has the right to rescind the transaction with two copies of such notices, as required by Sections 226.9(b) and (f) of Regulation Z. In many such instances, respondents fail to provide the customer with any copies of the required notice. — 680. FEDERAL TRADE COMMISSION DECISIONS Initial Decision 81 FTC.

Par. 7. Having entered into the consumer credit transactions set forth in Paragraphs Three and Four hereof, respondents in some instances fail to delay making any physical changes in the property of the customer and fail to delay performing any work or service for the customer until the three day rescission period provided for in Section . 226.9(a) of Regulation Z has expired, in violation of Section 226.9 (c) of Regulation Z.

Par. 8. Pursuant to Section 103 (k) of the Truth in Lending Act, respondents’ aforesaid failures to comply with the requirements of Regulation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents thereby have violated the Federal Trade Commission Act.

Mr. Fames M. Katz and Mr. Myer &. Tulhoff supporting the complaint. - a Mr, Percival D. - Oviatt, In. and Mr. Samuel P. Merlo, of Woods, Oviatt, Gilman, Sturman & Clarke, Rochester, New York ‘for re- Spondents. ~ ‘ Leman Drorston BY. Warren, K ‘Bewnern, Huarrve Exaurnir’ JUNE 16, 1971 ee — PRELIMINARY STATEMENT Respondents, a corporation, and two individual officers, are charged with violating the Truth in Lending Act (15 U.S.C. 1601), as implemented by Federal Reserve Regulation Z (12 C.F.R. § 226). The com-plaint was issued on January 18, 1971, against Fabbis, Inc., doing business as Rochester Plumbing and Heating Contractors and its officers, Richard J. Fabrizi and James J. Rebis, individually and as officers of the corporation.

It charged that:

1. Respondents regularly arrange for the extension of consumer credit to their customers, and have failed to provide them with a du-— plicate copy of consumer credit cost disclosures, to retain, as required by Section 226.8(a) of Regulation Z.

2. In rescindable transactions, respondents have failed to provide their customers with requisite copies of notices of the right of rescission, as required by Section 226.9(b) of Regulation Z. 3. In rescindable transactions, respondents have failed to delay during the three day rescission period, making any physical changes in the customers’ property, commencement of the work or deliveries to customers’ residences for the duration of the rescission period, in violation of Section 226.9 (c) of Regulation Z. FABBIS, INC., ET AL. 681 | 678 Initial Decision .

Respondents’ Answer admitted the following facts: 1. Respondent Fabbis, 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 123 Barberry Terrace, Rochester, New York. It is doing business under the name of Rochester Plumbing and Heating Contractors. _ 2. Respondents Richard J. Fabrizi and James J. Rebis are officers of said corporation. Their address is the same as that of the corporate respondent. Respondents are now, and for some time last past have. been, engaged in the sale of plumbing and heating equipment and installation services to the public.

8. As a part of their business, in the ordinary course and conduct ‘of their business as aforesaid, respondents arrange, and for some time last past regularly have arranged, 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. - Respondents’ Answer either flatly denied, or denied knowledge of, all of the other allegations in the complaint. A prehearing conference was held in Washington, D.C., on March 2, 1971. Evidentiary. hearings were held in Rochester, New York commencing on March 18, 1971, and were concluded on March 22, 1971. The following abbreviations will sometimes be used herein making references to the record: Transcript—Tr.; Commission Exhibits— CX; Respondents’ Exhibits—RX ; Complaint Counsels’ proposed findings of fact—CPF; + Respondents’ proposed findings of fact—RPF; Complaint—C; Answer—A.

On the basis of the entire record? the hearing examiner makes the following findings, conclusions and order. All proposed findings not found expressly or in substance are denied as erroneous, irrelevant or immaterial. .

1. Respondent Fabbis, 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 123 Barberry Terrace, Rochester, New York. It is doing business under 1 References to proposed findings of the parties include the citation of authority or reasons submitted therewith on the accuracy of which the hearing examiner has relied in light of the requirements of the ninety (90) day. rule. 4In accordance with the Commission rules reference is made. to the principal supporting items of evidence. The citation of particular references in no way indicates that the entire record has not been considered. The findings are based on the record as a whole and not only on the citations to the exhibits or transcript pages specifically noted. 494-841-7344 682 FEDERAL TRADE COMMISSIOM: DEGISIONS...

. Initial Decision 81 FTC.

the name of Rochester Plumbing ‘and Heating Contractors (Be 44; C., A.). , 2. ‘Respondents are. now, ‘and for. some time. last ‘past, have been ‘engaged in the sale of plumbing and heating equipment and installation services. to.the. public (Tr. 44; C.,.A.). There was no proof that respondents-have engaged in interstate commerce (Tr.. 98-101, 411, 423-425).

3. In the ordinary course and conduct of their business as. aforesaid, respondent corporation under. the direction and control of. the individual respondents. has arranged and for. some time last, past, regularly has arranged, 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 (C., A.;.Tr. 85-88, 95, 443- 444, 528). .

- A number of customer witnesses testified expressly that respondent corporation arranged for the extension of consumer credit: to them: (Tr. 61-62; Tr. 110; Tr. 187). Commission Exhibits 25A-59G (Tr. 390) are the bank records in evidence of thirty-six additional instances in which respondent corporation arranged credit for customers... ~ 4, Subsequent to July. 1, 1969, respondent corporation in the ordinary course and conduct of its business and in connection with arranging for consumer credit, has caused, and is causing, customers to execute retail installment contracts to finance home improvements on real property that is used as the principal residence of the customer. A number of customer witnesses testified that respondent corporation performed work on a structure which was used as a home and that was the principal residence of.the witness and his or her spouse (Tr. 56-57; 105-106 ; 182; 166; 182; 236-237; 253; 263-264; 280; 315; 835- 336 ; 367 ).

5. Respondent corporation employed ¥ wor kanen to install the plumbing and heating equipment it sold to its customers (Tr. 80). 6. No waivers of workmen’s liens were presented at the hearing (CPF 6), however, the corporate. respondent specifically waived any security interest or right of lien in connection with each transaction. (RPF 5).

7. In consumer credit transactions respondents have failed to render consumer credit cost disclosures to their customers prior to consummation of their transactions.

A number of customer witnesses who testified at the hearing indicated that he or she discussed the method of payment with respondents’ salesman before or at the time the sales agreement was executed - FABBIS, INC, ET AL. 683° 678 Initial, Decision and that it was understood that respondents would arrange for the extension of credit to them (Tr. 61; 110; 187; 173; 189-190; 212-218; 242 ; 256-257; 282-283 ; 317; 340-342; 361- —862). Mr. Apostalou, one of the respondents? salesmen, testified that the first thing discussed with a customer who indicated an intent to make a purchase was the method by which payment would be made (Tr. 478-47 9). Mr. Rease testified that the company wants to know that it is going to be paid so that the method of payment 1 is discussed with ‘the customer (Tr. 432, 440).

Mr. Apostalou. testified that he would contact Mr. Rease after a contract was signed in order to have him come out to a customer’s home and seek execution of the bank papers (Tr. 478). Mr. Rease’s testimony indicated that by the time he arrived at the home of a customer, to arrange for the extension of consumer credit, the sales contract would already be signed (Tr. 482). Thus, the consumer witnesses would not. receive the consumer credit cost. disclosures prior. to execution of the sales proposal or of the retail installment contract. (Tr. 62; 108-112; 116; 185-187; 168-169; 186- 189 ; 212-214; 241-943 ; 258; 282-284; 317-318; 357-361). 8. In connection with consumer credit transactions respondents ob- | tained from customers written acknowledgment of receipt of documents containing spaces for consumer credit cost disclosures, but in some instances, nevertheless, failed to provide customers with a completed copy of such disclosures.

Customer witnesses presented by counsel supporting the complaint testified that respondents failed to provide them with a fully completed retainable copy of consumer credit cost disclosures. The documents in evidence, nevertheless, reveal that each customer signed an acknowledgment of receipt of the disclosures. (Tr. 116-117, CX 10-A ; Tr. 187, CX 12-A; Tr. 169, CX 8-B; Tr. 187-189, CX 11-A; Tr. 214-216, CX 14-B; Tr. 241, CX 9-C; Tr. 258-260, CX.17-C; Tr. 285-286, 288 CX 21-B; Tr. 823, CX 15-B; Tr. 345-346, CX 24-A; Tr. 360, CX 13-B). 9. In connection with consumer credit transactions, respondents obtained from customers written acknowledgment of receipt of notices of right of rescission, but failed, in fact, to provide each such customer who it is claimed had the right to rescind with any copies of such notices, Customer witnesses testified that they did not receive a copy of these notices of right of rescission to retain. However, the documents reveal] that. receipt thereof. was acknowledged (e.g. Tr. 170; 116-117; CX 10-C, 10-D; Tr. 187, 148, CX 12-C, D; Tr. 216; Tr. 258, CX 17-C, D; Tr. 288; Tr. 323, CX 15-D, E; Tr. 345-346, CX 24-C, D; Tr. 360, CX 13-D, E).

684. FEDERAL ‘TRADE COMMISSION DECISIONS .

Initial Decision ‘81 F.T.C.

10. Having entered into credit transactions with their customers, respondents failed to delay making any physical changes in their customers’ property, performing any work or making any deliveries to the residences of such customers, for the duration of a three-day period. A. number of customer witnesses testified that the respondents commenced performance of the work during the first three days after the contract was signed (Tr. 62, 67; 111; 188-189; 172; 189; 217; 245; 962; 291; 317; 348; 362).

11. In such credit transactions, respondents did not obtain valid waivers of the right of rescission from such customers. A number of customer witnesses testified that there was no emergency situation requiring that the work upon their homes be performed before expiration of the three-day period (Tr. 117 ; 172; 208). - Although respondents’ counsel elicited testimony from several of Commission witnesses indicating that they believed they had executed waivers of their right of rescission (Tr. 171; 204-205) the witnesses testified that there was no» bona fide emergency situation requiring immediate performance of the work (Tr. 172; 190). A witness from one of the banking institutions testified that he had examined the records of transactions arranged with his bank by re- ‘spondents during the period of July 1, 1969, through December 30, 1969, and was unable to find any waivers of the right of rescission in the bank files for the period of July 1, 1969, through December 1969 (Tr. 387). George Rease, respondents’ general manager, testified on cross-examination that, during the period covered by the Commission’s investigation no valid waivers of the right of rescission were obtained (Tr. 446-447). Respondent Rebis confirmed that some waivers that had been obtained were deemed inadequate by counsel and were thrown away upon counsel’s advice (Tr. 540-541).

12. Shortly before the hearings in this matter were scheduled, respondents’ attorneys were supplied with a list of complaint counsel’s _ prospective witnesses. Thereafter, Mr. Rebis, one of the individual respondents, contacted a number of prospective witnesses and sought to obtain handwritten statements (Tr. 537-539). Mr. Larmon, the respondents’ customer relations man, accompanied Mr. Rebis to the homes of the prospective Federal Trade Commission witnesses. He made notes, then asked that witness copy, in his or her own handwriting, a statement embodying what was contained in the notes (Tr. 495-506).

- A number of the Commission’s witnesses testified that they executed such statements for respondents. However, each one also testified under oath, contrary to the written statement, at the hearing and in- ‘FABBIS, ING. ET AL, 9. 685.

678 i Initial Decision dicated that the contradictory written statements were in error (Tr. 141; 146-148; 202-203 ; 231-2932; 306-308; CPF 12). 13. During the hearing, respondents also produced certain questionnaires signed by customer witnesses, entitled “Help Us Maintain Good Business,” and offered them into evidence to contradict the sworn testimony of these witnesses. Because of the manner in: which these documents were procured and because of the concealment. of their true purpose by respondents’ employees, the hearing examiner accepts the sworn . statements given at.the hearing.

The. questionnaire was prepared asa result of the Commission’s $ investigation (Tr..532-533)., Examination of these questionnaire forms. ’ reveals that part of Question 2 relate to allegations of violations which were subsequently brought against the company by the Commission (RX 7, 9,11, 18,15,16).

Representatives ‘of the respondents called upon every - credit customer with whom the company dealt during the period covered by the investigation (Tr. 550) and, in some instances, the salesman who sold the equipment to the customers interviewed was the same person who came with the questionnaire (Tr. 552).

The method by which these questionnaires were completed was confusing and lent itself to erroneous answers being obtained. The corpany’s representative read each question orally to the respective signer - (Tr. 468) and marked or checked off the answers himself (Tr. 467). Although Question 2 of the questionnaire referred to the respective customer’s receipt or non-receipt of certain documents, the questioner did not have any samples of those documents available for the customer’s examination (Tr. 488). The company’s representative asked to see the documents that the customers had in their possession; some had them and others did not (Tr. 488). The customers were not informed as to the true purpose of the questionnaire. Although, one of the salesmen who went around with the questionnaires explained that they were merely designed to see if the company’s customers received. required papers and knew their rights (Tr. 482). Mr. Larmon, the customer relations man of the company, testified that he himself did not know the true purpose of the questionnaire (Tr. 505-508). Mr. Kramer, another company salesman, testified that it was merely to help the company maintain good business (Tr. 476).

Mrs. Szczepanski, one of the customer witnesses, testified that she believed the questionnaire which she executed (RX 4) was a public relations device (Tr. 178). She also stated that she was not told the significance of the document or the reason for its execution (Tr. 179). Mrs. Simon testified that she did not pay much attention to the - 686° FEDERAL TRADE = COMMISSION - DECISIONS Initial Decision: 81 FTC.

questionnaire before signing (te 199). ‘She did not ‘even look at it (Tr. 200). .

Mrs. Grodner testified that she only signed the qnéstionnaise because the company’s representative, who'came with it, promised that: she’ would thereafter be furnished with copies of everything which she had signed at the time the transaction was entered into (Tr. 250). Mr. Crews testified that the answers contained in the boxes in the’ “questionnaire were not true and never had been true (Tr. 272-274) . Mr. Zimmer testified that the respondents’ representatives ‘came around with the questionnaire and indicated that the company had found a number of incomplete papers behind a desk and that they -wanted to be sure he had received all documents which he was entitled to and that it was to be used merely for public relation purposes (Tr. 302, 305). He also stated that he did not read the statement (Tr. 304). Mr. Dunbar testified that he did not read the statement and that the answers were marked by the company’s representative (Tr. 355). The statements contained in the- questionnaire are unclear and — capable of misinterpretation. The testimony of - Mr. Henning indicates the possibility of misinterpretation. because of the omission of dates (Tr. 75-76).

‘Mr. Wiemer testified that he did not understand ‘the questisnis asked in the questionnaire (Tr. 119). Mrs. Szczepanski stated that she did not understand the questions and only later realized that what she had signed was not the truth (Tr. 179). Mrs. McKnight testified that her answers to the questionnaire were erroneous (Tr. 229— 231). ° 14. Respondents Richard J. Fabrizi and James J. Rebis are officers of said corporation. Their address is the same as that of the corporate respondent. (Admitted by Respondents’ Answer, and Amended Answer to Paragraph One of the Complaint, and Stipulation (Tr. 44).) ‘15. Respondents Richard J. Fabrizi and James J. Rebis are responsible for the acts and practices of Fabbis, Inc., with regard to the requirements of the Truth in Lending Act. “Mr. Fabrizi testified that he and Mr. Rebis are the president and vice president, respectively, of the corporate respondent, and have been such since the firm’s incorporation in 1963 (Tr. 84-86). They are its chief operating officers, being the company’s general manager (Tr. 78) and its sales manager (Tr. 85). During the entire corporate existence the individual respondents, Messrs. Fabrizi and Rebis, have been the company’s sole stockholders, sharing the stock equally (Tr. 84, 86, 411). In essence, the company is a continuation of the informa] partnership between these individuals which was begun several years - BABBIS; INC. ETAL, 99°70 687 678 Initial Decision prior to formation of the present corporation (Stipulation, Tr. 44). The very name of the corporation, “Fabbis,” was derived from a com-' bination of the first part of Mr. Fabrizi’s name and the last part of Mr. Rebis’ name (Tr. 84). , a The individual respondents testified that they were aware of what Regulation Z required of them. Mr. Fabrizi stated that the lending institutions with which the respondents dealt informed him and Mr. Rebis about these requirements (Tr. 90). Marine Midland’s sales representative, Frank Griffin, testified that he called upon the individual respondents many times regarding Truth in Lending matters and spoke with them personally (Tr. 377-879). Additionally, the individual respondents had conferences with their attorney relating to compliance with Truth in Lending (Tr. 415). Mr. Rebis testified that ‘he and Mr. Fabrizi knew what their company was required to do to.comply with the law (Tr. 528). a Mr. Fabrizi testified that he or Mr. Rebis telephoned: one out of ten customers when the law first became effective to ascertain whether they received their copies of the bank papers (Tr. 95). Mr. Rebis hired all the company salesmen, was responsible for assigning them their duties and supervising their activities (Tr. 85- 87). Together, the individual respondents hired George Rease (Tr. 86) whose duty it was to make consumer credit cost disclosures and to secure execution of retail installment obligations on the finance paper of the various local banks (Tr. 94). Mr. Rease was, and is, responsible to them for his activities (Tr. 87). Mr. Rease testified that he has been employed by the company for 7 years (Tr. 427) and that he sees Messrs. Fabrizi and Rebis every day that they are in town and often discusses individual consumer credit transactions with them (Tr. 443- 444). He testified that Mr. Fabrizi was shown every paper relating to every transaction of the company during the period in question (Tr. 444).

REASONS FOR DECISION The threshold question in this matter, i.¢., the power of Congress to legislate on credit questions regardless of their interstate character has been resolved by the Supreme Court’s action on another Title of the Truth in Lending legislation.* Since the jurisdiction delegated to the Commission expressly deals with the the question of commerce and states that the Commission may act “irrespective of whether the person is engaged in commerce * * *.”4 The question of jurisdiction re-. quires no further comment.

3 Perez v. United States 839 LW 4487 [402 U.S. 146], April 26, 1971. 415. U.S.C. 1601.

688 FEDERAL TRADE. COMMISSION:. DECISIONS Initial Decision - 81 FT.C.:

. The next serious question involves the credibility of the consumer witnesses. Respondents take the position that because the witnesses, prior to the trial, signed statements for the respondents that were contradictory to their testimony (some both in the form of questionnaires and also in the form of written statements and others in the form of questionnaires only) their testimony should be given. no weight. We disagree.

The questionnaires were presented as a form of public relations dévice. “Help Us Maintain Good Business” was the title. These questionnaires were made out after the investigation by the. Federal Trade- Commission was commenced, and designed, not by counsel who would have liad a responsibility to the Commission to insure that they were. properly taken, but, by employees of the corporate. respondent who: were wholly. untrained and who were clearly interested in securing: the “right” answers. The written statements were not secured until _ after the complaint was issued and the list of witnesses submitted to counsel, These too were taken, not by counsel, but. by one of the.re-. ‘spondents accompanied by another employee. One witness was told: that she could avoid coming to the hearing if she signed (Tr. 202-208). Under the circumstances, the weight of the combined testimony. under: oath that the. questionnaires and statements were. false makés itmuch more probable than not that the respondents had failed to abide by the Truth in Lending Act and regulations. This is particularly true when the recollection of the respondents’ employees was vague concerning their instructions in securing the questionnaires and concerning the events which gave rise to the requirements for notice of rescission and delay of commencement of the work. Moreover, several of respondents’ witnesses made it clear that the question of how the financing was to be done was discussed before the sales proposal was signed and at that time the prerequisites of disclosure were not complied with so that the customers had no opportunity to compare financing costs. The contention that the transactions started out ascash transactions and only later credit was sought is inherently incredible, despite the form of the proposal.* The witnesses made it very apparent in their testimony that they they could not afford the large expenditures required and had to secure financing. We turn next to the far more serious question of the waiver of lien by respondents. Respondents contend and the papers filed establish that they waived any lien they would secure on the property. Thus, they claim the transaction does not create any security interest and accordingly it is not 5 We need therefore not consider the claim by respondents that they had secured an interpretation from the Chief of the New York Office of the Federal Trade Commission that in the case of financing, not discussed at the time of the proposal but later requested, the provisions of the act and regulation have no application. ee PABBIS ING, BE ALS 689 678 ‘Initial Decision ‘rescindable. Respondents further claim that an interpretation to this effect was secured from the Chief of the New York Office of the Commission.° Complaint counsel take the position . that even. though the waiver might be effective to prevent respondents from securing a lien on the property for themselves, the New York lien law creates a lien in favor of their workmen and their material supplies i in the event that the wages or material charges are not paid’ and it was the purpose of the Truth in Lending legislation to require that ‘all liens be considered even though not under the control of the lender. This position, it seems to the undersigned is wholly unwarranted. It would make it impossible ever to secure a waiver because, particularly in the ease of union labor where the union may dispatch the employees directly to the job, the employer would not even know who they were at the time the transaction was entered into and could not secure waivers from them. There is moreover, here, no claim that the materialmen were. unpaid or that the workmen did not receive their wages. To. the contrary, the materials were paid for in the normal course in advance of their delivery to the job. Unless the law and regulations are to be construed to require a waiting period and a right to rescission in all cases—which is clearly not true since a waiver by the customer in cases of emergency is provided for *—there cannot be a requirement that the possible liens of workmen and materialmen must be waived also. By reason of the waivers of the banks and of the respondents, it seems to me that this phase of the charge must be dismissed. This is not, however, dispositive of the proceeding. Paragraph Five of the complaint contains the following charge: In connection with the consumer credit transactions set forth in Paragraphs Three and Four® hereof, respondents prepare documents containing consumer ®Since the person by whom the interpretation was allegedly given was not called to deny it, we must assume that the claim was correct. While as a matter of law such interpretation may carry little weight, from the standpoint of the public interest in issuing an order in this matter it may be very significant. ™McKinneys “Lien Law” Volume Article 1, 1-3. 8T have not discussed the waiver by the customer of the waiting period because respondents admit that the waivers secured were inadequate. ®The paragraphs referred to provide as follows: Paragraph Three: In the ordinary course and conduct of their business as aforesaid, respondents arrange, and for some time last past regularly have arranged, 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.

Paragraph Four: Subsequent to July 1, 1969, respondents in the ordinary course and conduct of their business and in connection with their arranging for consumer credit, have caused, and are causing, customers to execute retail installment contracts, herein referred to as “the contract,” which results or may result in a security interest being retained or acquired in real property which is used or is expected to be used as the principal residence of the customer. The customers thereby have the right to rescind such transactions, as. provided in Section 226.9(a) of Regulation Z. 690 FEDERAL. TRADE COMMISSION DECISIONS Initial. Decision 81 F.T.C.

eredit. cost disclosures required by Section 226.8.of Regulation Z and obtain from customers written acknowledgment of receipt of these disclosures, but in some instances nevertheless fail to provide ‘the customer with a copy of such disclosures, as required by Section 226.8(a) of Regulation Z. “This it seems to the hearing examiner includes a charge that the customer is not provided with the cost disclosures prior to the time he or she signs the sales proposal. This is true because Section 226. 8 (a) of Regulation Z specifically provides: ae (a) General rule. Any. creditor when extending credit other than open. end credit shall, in accordance with § 226.6 and to the extent applicable, make the “disclosures required by this section with respect to any transaction. consum- ‘mated on or-after July 1, 1969. Except as provided: in paragraphs (g) ‘and’ (h) - of this: section” such disclosures: shall: be made. before ‘the’: ‘transaction is consummated.. At the time disclosures are.made, the creditor shall furnish the.customer with a duplicate. of. the instrument or.a statement.by ,which the, required disclosures are made and on which the creditor ig identified. All of the dis- ; ° closures shall be made together on either (1) The note or other’ instrument evidencing the: obligation on the’ same side of the page and above or adjacent to-the place for the customer’s signature; or _. (2), One side of a separate statement which identifies: the. transaction: (Bim phasis and Footnote added) Admittedly, it-was the practice of the salesmen prior: to November _or early December 1969 when Mr. Rease was in sole charge of handling the “bank papers” to secure the commitment in the sales proposal and then to call Mr. Rease to come over to the customer’s house and have the 10 The subsections referred to have no applicability. They read as follows: (g) Orders by mail or telephone. If a creditor receives a purchase order or a request for an extension of credit by mail, telephone, or written communication without personal solicitation, the disclosures required under this section may be made any time not later than the date the first payment is due, provided: (1) In the case of credit sales, the cash price, the downpayment, the finance charge, the deferred payment price, the annual percentage rate, and the number, frequency, and amount of payments are set forth in or are determinable from the creditor’s catalog or other printed material distributed to the public; or (2) In the case of loans or other extensions of credit, the amount of the loan, the finance charge, the total scheduled payments, the number, frequency, and amount of payments, and the annual percentage rate for representative amounts or ranges of credit are set forth in or are determinable from the creditor’s printed material distributed to the public, in the contract of loan, or in other printed material delivered or made available . to the customer.

(h) Series of sales. If a credit sale is one of a series of transactions made pursuant to an agreement providing for the addition of the amount financed plus the finance charge for the current sale to an existing outstanding balance, then the disclosures required under this section for the current sale may be made at any time not later than the date the first payment for that sale is due, provided :

(1) The customer has approved in writing both the annual percentage rate or rates and the method of treating any unearned finance charge on an existing outstanding balance in computing the finance charge or charges; and (2) The creditor retains no security interest in any property as to which he has received payments aggregating the amount of the sale price including any finance charges attributable thereto. For the purposes of this subparagraph, in the case of items purchased on different dates, the first purchased shall be deemed first paid for, and in thé case of items purchased on the same date, the lowest priced shall be deemed first paid for. ' FABBIS, INC., ET AL, | 691 678 . Initial Decision other papers signed. Thus the customers. did not at. the time they agreed tothe purchase on time have any disclosure of what the cost of financing would be. So the expressed purpose of the Act “* * * that the customer will be able to compare more readily the various credit terms available to him and avoid the uninformed. use of credit” (15 U.S.C. § 1661) was frustrated. me Accordingly, the following conclusions and order should be entered : CONCLUSIONS 1. The Federal Trade Commission has jurisdiction over respondents and over the subject matter of this proceeding. Under the law it is not necessary that the transaction be in interstate commerce. <9". _ 2. The individual respondents, by reason of their ownership of the corporate respondent, their direction and control over its operations, and the history of the corporation as‘successor to a partnership involving the individual respondents and the ease with which the corporation could be eliminated, should be held individually responsible if the corporation is held responsible. a ne 3. The corporation and the banks validly waived any security imterest they might have over the residences of respondents’ customers and thus no right of rescission arose.

Securing a waiver from others who might conceivably secure a lien, in the event of malfeasance of respondents in failing to pay their obligations to wage earners and materialmen, is not required by the Act. 4. The respondents systematically failed to afford to the prospective customers the disclosure of the credit costs before the sales order was executed and a downpayment made. Thus the requirements of Section 226.8(a) of Regulation Z were not met and the purpose of the Act was not carried out.

5. The following order should be issued :

ORDER It is ordered, That respondents Fabbis, Inc., a corporation, doing | business as Rochester Plumbing and Heating Contractors or under any other name, and its officers, and Richard J. Fabrizi and James J. Rebis, individually and as officers of said corporation, and respondents’ agents, representatives and employees, directly or through any corporate or other device, in connection with any consumer credit sale, as “consumer credit” and “credit sale” 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, et seg.), do forthwith cease and desist from: 692 FEDERAL: TRADE COMMISSION DECISIONS | Concurring Statement 81 FTC.

el Failing to provide any customer prior to consummation of the transaction with a copy, which the customer may retain, of all. disclosures required to be made by Section 226.8 of Regulation Z, ~ in the form and manner ‘prescribed therein, as required by Seetion 226.8(a) of Regulation Z.

2. Failing, in any consumer credit transaction or advertisement, to make all disclosures required by Sections 226.6, 226.8, 226.9. and 226.10 of Regulation Z, in the manner, form and amount prescribed therein.

Ii is further ordered, That a copy of this order to cease and. desist be delivered to all present and future personnel of respondents engaged in the consummation of any eredit sale, and that respondents secure from each such person a signed statement. acknowledging re- -eeipt of said onder, Li is further ordered, That respondents notify the Commission. at least thirty (80) days prior to any. proposed. change i 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 1 in the corporation which may affect - compliance obligations arising out of the order. : CoNncCURRING STATEMENT OF CHARMAN Kirk PATRICK. I have serious reservations about the validity of Sections 226.9 (a) and 226.2(z) of Regulation Z insofar as they define nonconsensual mechanics’ liens arising by operation of law to be security interests which trigger the Act’s rescission provisions. I would not have interpreted Section 125(a) of the Act in this way, and I believe the Board may have exceeded its authority in so doing. I am reluctant, however, to take a position which, if adopted py the majority, would result in an unreviewable decision to terminate most governmental enforcement in this regard. The opportunity for appellate review is foreclosed, of course, when the Commission decides an issue in the favor of the respondent. That factor alone would not ordinarily influence my judgment. In this particular instance, however, I believe that for a variety of reasons the Commission’s decision should be subject to the scrutiny of full judicial review. The validity of the regulations here at issue presents a close question—one which involves a difficult matter of statutory interpretation. As the majority notes, courts in two jurisdictions have disagreed on whether or not Section 125(a) of the statute applies in the factual situation here present. The statute itself provides little guidance in determining the precise limits of the Board’s discretion in /FABBIS, INC., ET AL 9 -¢, 693..

678 - : Opinion .

interpreting the statute, According to Section 105, regulations -are. valid if, “tn the judgment of the Board (they) are necessary or proper to effectuate the purposes of (the statute) to prevent circumvention or evasion thereof or to facilitate compliance therewith.” (emphasis added). Thus, the law gives the Board a broad mandate for the exercise and application of its expertise, and the outer boundaries of its discretion have not to date been satisfactorily defined. To its task of interpreting the statute, the Board. brings considerable: knowledge acquired from its long involvement with monetary and credit matters, as: well as from public comments. which it receives on all régulations before they are promulgated in final form. We have |. little inidication on. this record of the factors which in. the Board’s. judgment made necessary and. proper the interpretation of the statute. here challenged. .

In these circumstances and in. a ease which. does not. involve a clear abuse of discretion, I am not: inclined to rule that the regulations of a Congressionally ernpowered. expert: body operating under so broad. a mandate-are invalid. - Accordingly, I concur in-the disposition of this‘ease. ' Opinion or THE Commission By MacIntyre, Commissioner:

This matter is before the Commission upon the appeal of complaint . counsel. from the initial decision of the administrative law judge filed June 16, 1971. In this decision the administrative law judge held that some, but not all, of the charges of the complaint were sustained, and he entered an order to cease and desist as to those practices he found to be unlawful. Complaint counsel filed an appeal, respondents have answered such appeal, and complaint counsel.in turn have filed a reply. Oral argument on the appeal was held January 6, 1972. The complaint charges the respondents with violations of the Truth in Lending Act (15 U.S.C. 1601, e¢ seg.) (referred to hereafter as the Act) and Regulation Z (12 C.F.R. § 226), the implementing regulation, as well as the Federal Trade Commission Act (15 U.S.C. 41, et seg.). The charges are, in general, that respondents, in connection with the extension of consumer credit, in transactions covered by the Act, have failed, as required by Regulation Z, to provide. customers with a copy. of, consumer credit cost disclosures; have failed, as required by Regulation Z, to provide their customers with copies of a notice of the right of rescission; and have failed, as required by Regulation Z, to delay, during the three- -day rescission period, the making. 694. FEDERAL TRADE COMMISSION DECISIONS Opinion 81 F.T.C.

of physical changes in the customers’ property and the commencement of work or.service.

' The respondents are Fabbis, Inc., a New York corporation doing business as Rochester Plumbing and Heating Contractors, as well as the individuals Robert J. Fabrizi and James J. Rebis, named individually and as officers of the named corporation. The respondents, at the time of the hearing and prior thereto, engaged in the sale of plumbing and heating equipment and installation services to the public. The ‘administrative law judge, in his initial decision, held that respondents systemmatically failed to afford prospective customers the disclosure of credit costs béfore the sales order was executed and a downpayment made; thus, that the requirements of Section 226.8(a) of Regulation Z weré not metand the purpose of the Act not carried out. He included in his initial decision an order to prohibit such practices. The administrative law judge failed to find a violation of law, however, insofar as thé respondents were charged with failing to provide their customers with notices of the right of rescission a& ‘required by Section 226.9(b) of Regulation Z and with the failure’to delay ‘performance during the three-day rescission. period required by Sec- — tion 226.9(c) of Regulation Z. On the two latter charges the administrative law judge agreed with respondents’ contention that since the corporation and the banks providing the loan money had waived any security interest they might have in the property there was thus no right of rescission for the customer. He rejected complaint counsel’s position that liens created by operation of law, such as workmen’s and materialmen’s liens, constituted a security interest under the Act and made the transactions rescindable.

Complaint counsel appeals from the part of the initial decision in which the administrative law judge failed to find violations of law as ' charged in the complaint, contending that he was in error in not holding respondents’ credit transactions to be rescindable and therefore subject to the requirements of the Act and Regulation Z covering the customer’s right of rescission. Complaint counsel requests that the order prohibit for the future all the violations charged, and in addition he seeks a provision in the order which would require respondents to afford their customers in prior transactions the right to rescind such transactions.

Except for a question on the scope of the order, there is only one issue of substance raised by complaint counsel’s appeal. It is whether or not respondents’ credit transactions are rescindable transactions, and therefore subject to Section 125 of the Act and to Section 226.9 of Regulation Z providing a right of rescission, where respondent cor- FABBIS, INC., ET AL. 695 678 Opinion © poration and the banks making the loans acted to waive all their security interest but where mechanic’s liens or liens created by operation of law in favor of workmen and others were not waived." Since July 1, 1969 (the effective date of Regulation Z), respondents, in connection with the arranging for consumer credit caused customers to execute retail installment contracts to finance home improvements on real property used as customers’ principal residences (finding 4, page 4 [p. 682, herein], initial decision). The record is clear, and the administrative law judge found, that respondents failed to supply copies of the required notice to such customers of their right of rescission and that they further failed to delay the making of physical changes in the customers’ properties and the performing of work on such residences during the three-day rescission period (findings 9 and 10, pages 5 and 6 [pp. 683 and 684, herein] of the initial decision). 3 1 2 3 0 0 624 1303 1334 562 -1 4 1 2 3 1 0 667 1303 1286 62 -1 5 1 2 3 1 1 667 1317 184 48 96.811409 Although5 1 2 3 1 2 870 1320 228 42 96.783829 respondents5 1 2 3 1 3 1114 1317 104 34 96.687233 claims 1 2 3 1 4 1236 1317 78 32 96.739479 that5 1 2 3 1 5 1334 1315 209 43 96.313881 respondents 1 2 3 1 6 1564 1311 220 42 96.313881 corporations 1 2 3 1 7 1805 1309 69 34 96.534393 ands 1 2 3 1 8 1893 1303 60 38 96.284714 thea 1 2 3 2 0 624 1356 1325 60 -1 5 1 2 3 2 1 624 1352 138 68 95.578903 lending5 1 2 3 2 2 778 1352 109 68 95.578903 banks5 1 2 3 2 3 902 1366 133 37 96.774567 waived5 1 2 3 2 4 1043 1365 56 36 93.119209 all5 1 2 3 2 5 1112 1369 40 32 96.579079 of5 1 2 3 2 6 1165 1367 92 33 96.579079 theirs 1 2 3 2 7 1270 1365 150 43 96.711594 security5 1 2 3 2 8 1436 1365 143 32 96.733711 interests 1 2 3 2 9 1592 1363 38 32 95.179375 in5 1 2 3 2 10 1645 1362 61 33 95.179375 thes 1 2 3 2 11 1718 1356 231 37 96.461945 transactions4 1 2 3 3 0 631 1410 1323 54 -1 5 1 2 3 3 1 631 1423 172 41 96.295135 involved,5 1 2 3 3 2 817 1422 82 42 96.735184 they5 1 2 3 3 3 915 1418 99 34 96.275406 made5 1 2 3 3 4 1023 1430 52 22 96.865959 no5 1 2 3 3 5 1089 1419 85 33 96.990494 such5 1 2 3 3 6 1189 1417 102 33 96.873093 claims 1 2 3 3 7 1307 1416 59 33 96.956413 for5 1 2 3 3 8 1381 1413 59 35 96.970367 thes 1 2 3 3 9 1456 1415 88 31 96.682861 liens5 1 2 3 3 10 1558 1413 138 33 95.309143 created5 1 2 3 3 11 1710 1412 47 42 95.309143 by5 1 2 3 3 12 1774 1410 180 42 96.908257 operation4 1 2 3 4 0 625 1461 1325 51 -1 5 1 2 3 4 1 625 1474 40 32 92.480263 of5 1 2 3 4 2 683 1470 89 36 76.123413 ‘states 1 2 3 4 3 790 1473 69 32 96.455048 laws 1 2 3 4 4 877 1470 163 42 96.854591 coverings 1 2 3 4 5 1057 1468 286 41 87.968185 subcontractors,5 1 2 3 4 6 1363 1467 175 31 96.390343 workmen5 1 2 3 4 7 1558 1463 70 34 96.912247 ands 1 2 3 4 8 1648 1463 125 33 95.594856 others.5 1 2 3 4 9 1795 1462 76 32 92.959869 Thes 1 2 3 4 10 1891 1461 59 33 92.684273 ad-4 1 2 3 5 0 630 1509 1325 54 -1 5 1 2 3 5 1 630 1521 230 36 96.045685 ministrative5 1 2 3 5 2 884 1521 58 33 96.045685 laws 1 2 3 5 3 961 1520 105 43 96.661140 judges 1 2 3 5 4 1093 1518 208 43 96.530449 specifically5 1 2 3 5 5 1322 1516 112 33 96.781372 found5 1 2 3 5 6 1454 1515 79 33 97.009521 that5 1 2 3 5 7 1556 1525 42 22 96.933830 no5 1 2 3 5 8 1608 1512 155 35 96.597099 waivers5 1 2 3 5 9 1784 1512 40 33 92.972687 of5 1 2 3 5 10 1844 1509 111 36 92.405540 work-4 1 2 3 6 0 628 1563 1327 50 -1 5 1 2 3 6 1 628 1574 108 32 96.073311 men’s5 1 2 3 6 2 750 1572 86 33 96.683441 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this5 1 3 2 1 7 1219 1963 98 22 96.345253 sections 1 3 2 1 8 1334 1962 159 25 96.645920 [exceptions5 1 3 2 1 9 1506 1960 84 22 96.430252 which5 1 3 2 1 10 1603 1965 45 16 96.779533 ares 1 3 2 1 11 1661 1959 45 21 96.508545 not5 1 3 2 1 12 1719 1959 61 21 96.155609 here5 1 3 2 1 13 1791 1958 167 26 95.430626 applicable],4 1 3 2 2 0 634 1992 1323 33 -1 5 1 3 2 2 1 634 2003 27 21 95.885635 in5 1 3 2 2 2 676 2003 44 20 95.885635 thes 1 3 2 2 3 735 2006 59 17 95.644348 cases 1 3 2 2 4 807 2002 28 21 95.569344 of5 1 3 2 2 5 849 2006 51 19 95.569344 any5 1 3 2 2 6 916 2004 132 17 96.534492 consumers 1 3 2 2 7 1062 1998 82 22 94.587097 credits 1 3 2 2 8 1159 1997 162 22 96.170235 transactions 1 3 2 2 9 1336 1996 28 21 96.442505 in5 1 3 2 2 10 1377 1995 84 22 96.584106 which5 1 3 2 2 11 1477 2001 15 15 96.338455 a5 1 3 2 2 12 1507 1994 113 25 96.338455 security5 1 3 2 2 13 1634 1993 111 21 96.185471 interests 1 3 2 2 14 1759 1992 22 22 96.229446 is5 1 3 2 2 15 1795 1992 118 21 96.193100 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1 3 2 4 4 854 2068 83 21 96.335052 whom5 1 3 2 4 5 956 2067 82 22 96.216515 credits 1 3 2 4 6 1056 2066 23 21 96.325272 is5 1 3 2 4 7 1097 2065 134 26 96.597267 extended,5 1 3 2 4 8 1249 2065 44 21 96.597267 thes 1 3 2 4 9 1311 2064 99 25 95.412994 obligor5 1 3 2 4 10 1428 2063 67 21 96.526833 shall5 1 3 2 4 11 1514 2063 66 20 96.140556 have5 1 3 2 4 12 1597 2061 46 21 96.695053 thes 1 3 2 4 13 1661 2060 72 26 96.401840 rights 1 3 2 4 14 1750 2061 29 20 96.401840 to5 1 3 2 4 15 1796 2058 99 22 95.870552 rescind5 1 3 2 4 16 1915 2059 44 21 96.377762 thea 1 3 2 5 0 636 2086 1324 40 -1 5 1 3 2 5 1 636 2103 159 22 95.798759 transactions 1 3 2 5 2 814 2103 67 21 96.048225 until5 1 3 2 5 3 899 2101 128 25 95.952438 midnight5 1 3 2 5 4 1044 2100 29 22 95.764961 of5 1 3 2 5 5 1089 2100 44 22 96.340729 thes 1 3 2 5 6 1150 2100 71 20 96.103981 thirds 1 3 2 5 7 1237 2098 117 22 96.680000 business5 1 3 2 5 8 1372 2097 50 24 96.563553 days 1 3 2 5 9 1438 2096 134 25 96.246193 following5 1 3 2 5 10 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20 95.579048 do5 1 3 2 8 15 1806 2200 35 16 91.728844 so.5 1 3 2 8 16 1861 2195 13 13 86.717758 *5 1 3 2 8 17 1894 2193 13 13 86.717758 *5 1 3 2 8 18 1929 2193 30 13 89.409134 *”2 1 4 0 0 0 620 2236 1344 386 -1 3 1 4 1 0 0 673 2236 1225 35 -1 4 1 4 1 1 0 673 2236 1225 35 -1 5 1 4 1 1 1 673 2248 101 21 96.837112 Sections 1 4 1 1 2 788 2246 74 23 96.855049 226.95 1 4 1 1 3 876 2246 28 22 96.855049 of5 1 4 1 1 4 917 2244 153 27 93.231712 Regulations 1 4 1 1 5 1084 2244 19 21 90.346725 Z5 1 4 1 1 6 1115 2243 162 25 96.102791 implements5 1 4 1 1 7 1291 2241 54 22 96.492470 this5 1 4 1 1 8 1357 2241 98 21 96.625801 sections 1 4 1 1 9 1469 2240 28 21 96.233398 of5 1 4 1 1 10 1510 2240 45 21 96.760033 thes 1 4 1 1 11 1567 2238 49 22 95.697144 Acts 1 4 1 1 12 1629 2238 52 21 95.877304 ands 1 4 1 1 13 1693 2237 76 22 96.215729 reads5 1 4 1 1 14 1782 2238 27 20 96.714943 in5 1 4 1 1 15 1823 2236 75 26 96.450859 part:3 1 4 2 0 0 639 2269 1325 240 -1 4 1 4 2 1 0 671 2269 1290 36 -1 5 1 4 2 1 1 671 2283 30 13 77.655426 “x5 1 4 2 1 2 722 2282 12 13 63.443619 *5 1 4 2 1 3 754 2281 13 13 80.483192 *5 1 4 2 1 4 787 2281 98 24 95.367653 Excepts 1 4 2 1 5 903 2285 29 16 95.566559 as5 1 4 2 1 6 949 2278 141 22 89.502724 otherwise.5 1 4 2 1 7 1104 2277 122 26 96.438148 provided5 1 4 2 1 8 1243 2277 26 19 96.162445 in5 1 4 2 1 9 1287 2274 54 22 96.725212 this5 1 4 2 1 10 1359 2274 105 25 96.837173 section,5 1 4 2 1 11 1483 2274 28 21 96.055115 in5 1 4 2 1 12 1528 2274 45 20 96.850975 thes 1 4 2 1 13 1589 2277 59 17 96.919434 cases 1 4 2 1 14 1665 2271 28 22 96.366714 of5 1 4 2 1 15 1708 2276 52 20 95.102150 any5 1 4 2 1 16 1777 2269 82 23 41.955990 credits 1 4 2 1 17 1876 2270 85 20 91.401878 trans-4 1 4 2 2 0 639 2304 1322 34 -1 5 1 4 2 2 1 639 2316 86 22 96.026596 actions 1 4 2 2 2 740 2316 27 21 96.805710 in5 1 4 2 2 3 781 2314 85 23 96.748756 which5 1 4 2 2 4 880 2319 16 16 96.102890 a5 1 4 2 2 5 911 2313 112 25 95.729958 security5 1 4 2 2 6 1039 2312 109 21 96.674904 interests 1 4 2 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50 25 96.357536 days 1 4 2 5 3 779 2416 135 25 96.540504 following5 1 4 2 5 4 929 2416 45 21 95.819595 thes 1 4 2 5 5 989 2415 60 21 95.819595 dates 1 4 2 5 6 1065 2415 28 20 96.962234 of5 1 4 2 5 7 1108 2412 205 22 96.696404 consummation5 1 4 2 5 8 1327 2412 29 20 96.871628 of5 1 4 2 5 9 1372 2411 61 21 96.520035 that5 1 4 2 5 10 1447 2409 163 22 96.351944 transactions 1 4 2 5 11 1625 2413 29 15 96.025604 or5 1 4 2 5 12 1670 2407 45 21 96.682434 thes 1 4 2 5 13 1730 2407 62 21 96.132263 dates 1 4 2 5 14 1806 2406 28 21 95.570129 of5 1 4 2 5 15 1849 2404 114 25 96.383125 delivery4 1 4 2 6 0 639 2438 1324 37 -1 5 1 4 2 6 1 639 2453 28 20 96.051422 of5 1 4 2 6 2 684 2453 44 20 95.452736 thes 1 4 2 6 3 745 2451 153 22 96.690285 disclosures5 1 4 2 6 4 915 2448 116 27 96.895782 required5 1 4 2 6 5 1048 2449 80 21 96.764168 under5 1 4 2 6 6 1145 2447 54 21 96.631920 this5 1 4 2 6 7 1215 2446 98 21 96.126381 sections 1 4 2 6 8 1330 2445 49 21 96.126381 ands 1 4 2 6 9 1397 2445 36 20 95.659378 all5 1 4 2 6 10 1448 2444 76 21 96.690956 others 1 4 2 6 11 1540 2442 120 22 96.111946 materials 1 4 2 6 12 1675 2440 154 22 96.111946 disclosures5 1 4 2 6 13 1846 2438 117 26 96.947899 required4 1 4 2 7 0 640 2473 1324 36 -1 5 1 4 2 7 1 640 2487 81 21 96.642853 under5 1 4 2 7 2 736 2485 55 21 96.464935 this5 1 4 2 7 3 806 2485 71 24 96.482780 Part,5 1 4 2 7 4 894 2484 145 21 96.687248 whichever5 1 4 2 7 5 1054 2482 22 21 95.901756 is5 1 4 2 7 6 1091 2482 75 24 95.901756 later,5 1 4 2 7 7 1183 2481 31 25 96.350609 by5 1 4 2 7 8 1231 2479 130 25 96.613190 notifying5 1 4 2 7 9 1376 2479 45 21 96.430916 thes 1 4 2 7 10 1437 2477 111 22 14.668930 creditors 1 4 2 7 11 1564 2476 32 25 96.669693 by5 1 4 2 7 12 1611 2475 70 26 95.743431 mail,5 1 4 2 7 13 1698 2475 130 24 95.743431 telegram,5 1 4 2 7 14 1844 2478 28 15 96.548973 or5 1 4 2 7 15 1889 2473 75 21 96.222588 other3 1 4 3 0 0 620 2515 1344 107 -1 4 1 4 3 1 0 620 2515 618 37 -1 5 1 4 3 1 1 620 2550 2 2 82.914742 _5 1 4 3 1 2 641 2521 105 24 95.973778 writings 1 4 3 1 3 758 2520 29 20 96.164551 of5 1 4 3 1 4 799 2519 41 21 96.164551 his5 1 4 3 1 5 854 2517 129 28 96.415062 intentions 1 4 3 1 6 997 2518 25 20 96.753960 to5 1 4 3 1 7 1038 2517 31 20 96.753960 do5 1 4 3 1 8 1084 2521 34 16 92.812164 so.5 1 4 3 1 9 1139 2515 46 13 0.000000 s*5 1 4 3 1 10 1207 2515 31 12 35.557472 my4 1 4 3 2 0 642 2548 1322 39 -1 5 1 4 3 2 1 642 2563 79 21 96.091629 Others 1 4 3 2 2 737 2563 75 24 96.091629 parts5 1 4 3 2 3 829 2560 29 22 96.676888 of5 1 4 3 2 4 877 2560 100 21 96.653908 Sections 1 4 3 2 5 997 2558 73 22 96.859612 226.95 1 4 3 2 6 1088 2557 105 22 96.058662 contains 1 4 3 2 7 1212 2555 185 26 96.761795 requirements5 1 4 3 2 8 1414 2554 113 24 96.849030 relating5 1 4 3 2 9 1544 2553 27 21 93.998688 to5 1 4 3 2 10 1589 2550 84 22 96.359215 notices 1 4 3 2 11 1692 2551 42 20 95.994133 for5 1 4 3 2 12 1750 2548 169 26 95.994133 opportunity5 1 4 3 2 13 1938 2548 26 21 96.963951 to4 1 4 3 3 0 640 2586 718 36 -1 5 1 4 3 3 1 640 2596 109 26 96.012756 rescind,5 1 4 3 3 2 764 2595 73 25 96.558746 delays 1 4 3 3 3 855 2594 26 22 96.773079 of5 1 4 3 3 4 896 2593 177 26 96.476135 performances 1 4 3 3 5 1088 2592 50 21 96.539452 ands 1 4 3 3 6 1154 2591 74 20 96.679909 others 1 4 3 3 7 1242 2586 116 33 95.943054 matters. 696°. FEDERAL TRADE COMMISSIO:

Opinion: 81 F.C...

forms used by the respondent corporation suggest that mechanic’s liens. of subcontractors, laborers and.others were not waived, 2 . There is no dispute that the law of the State of New York, the j juris- : diction in which the transactions presented: herein took place, grants mechanic’s liens on. customers’ homes to subcontractors, laborers and — others for work performed (N.Y. Lien Law, §3 (McKinney 1966)).. Respondent corporation employed workmen. to install the plumbing and. heating equipment it sold to customers (finding 5, page 4 [p. 682, herein], in- initial decision). Thus, it appears that if the mechanic’s liens or the right to such liens granted to respondents’ workmen by. operation: of law are a security interest within the meaning of that term in the Act, respondents are in violation.of the Act and. Regulation Z:

It is our view that. a. sectirity interest under the Act does: include mechanic’s liens and other hens: created. by operation of: law. In-this view’ we: follow. the holding and the reasoning of the’ Circuit Court of the United: States Court of Appeals for the District: of Columbia, which kéld.to that effect-in Gardner and North Roofing Siding Gorporation:v. Board of Governors of the Federal Reserve: Board; 464 F. 2d 838 (D.C. Cir. 1972); 4 CCH Corisutner Credit Guide § 99159." At issue in the Gardner case was the validity of the Board’s regulations, which. had the effect. of requiring the seller to notify a customer of his right to rescind when there is a probability that a lien on his house will arise by operation of law evén though he has not executed: an indenture on the property. The statute (Section 125(a)): provides for the right of rescission in a consumer credit transaction “in which a security interest is retained or acquired” in ‘customers’ residences, whereas the Board’s regulation reads in pertirient part: “in which a 2A section of respondents’ “Retail Installment Obligation” used in the transactions shown in the record reads as follows:

“3. SECURITY INTERESTS : Represents that, except as a. provision is made in ‘D~2’ of this Obligation for the execution and delivery of a Collateral Mortgage on the above ‘Property to be Improved’ by the Buyer(s) [and by any other owner(s) of any interest in said Property] to the Bank designated above, and/or b. the right to a Mechanic’s Lien on said Property of a subcontractor, laborer, materialman, or other person (excluding the Seller) who performs labor or furnishes materials for the improvement thereof, may be a security interest in said Property within the meaning of ‘security interest’ as used in Federal Reserve Board Regulation Z, no security interest is or is to be held, retained or acquired by the Seller, the Bank designated above, or any other person in connection with the extension of credit evidenced by this Obligation.” (Commission Exhibit 9-}. ) ?The same or a similar issue is raised in WN. 0. Freed Company, Inc., et al. v. Board of Governors of the Federal Reserve System, U.S.D.C. W.D.N.Y. September 29, 1971, CCH Consumer Credit Guide § 99356. The district court in the case held that only contracts which acquired a security interest through a mortgage, deed of trust, or other type consensual liens are rescindable; that Congress did not include liens which arise in the future by operation of law. The Freed case has been appealed to the United States Court of Appeals for the Second Circuit. NW. CO. Freed Company, Inc., et al. v. Board of Governors of Federal Reserve Board, appeal docketed, No. 72-1381 (2d Cir.). FABBIS, INC, ET AL « —- 697, 678 - Opinion security interest is or. will be.retained or acquired”. (8 226 9(a)) (emphasis supplied). ‘The Board also defined the term “security. .interest” to include liens created by operation of law (§ 226.2(z).).. The court upheld the Reserve Board’s regulations on this point. It .reasoned, in part that a contract to renovate, remodel or repair a house imports the.materials will be furnished in connection with that work; and. that, therefore, ¢mplicit. inthe contract isa.provision that a lien will attach to secure payment. for the work and the.materials,. We believe it is clear from the decision that, the court’s reasoning. and. its holding covers all nonconsensual security interests, including. the mechanic’s liens granted. by statute to the creditor as a:contractor. or supplier, .as well as mechanic’s liens. granted to third parties not privy to the original contract, such as subcontractors, laborers and. others, for their work, services.or materials, .

’ Accordingly, we-hold that respondents violated the Act and Regulation Z not only in the respects found by the administrative law judge but also in the other respects charged in the complaint, ¢.¢., for failing to provide notice. of. rescission and for failing to delay performance within the.three-day period provided by law. There is no direct issue before the Commission on - the validity of respondents’ waiver policy. That issue would have been before us had respondents shown that all security interests were waived, including the mechanic’s liens of their workmen and others. In the circumstances there is no need to inquire into the validity and appropriateness of the waivers. They were incomplete and so the defense must fail. It should be noted, however, that Section 226.901 also provides that if, as a result of the transaction, a security interest is or will be retained or acquired by a subcontractor, workman or other person, the transaction is rescindable and the creditor then would be responsible for delivering the rescission notice and the applicable disclosures and for delaying performance.

‘Neither the Act nor Regulation Z expressly provides for the waiver of security interests. The only explicit language on waiver they contain is that for the customer’s waiver of his right of rescission under certain emergency-type circumstances (see Section 125(d) of the Act and Section 226.9(e) of Regulation Z). The concept of a waiver of security interest by the creditor appears in Section 226.901 of the Reserve Board's “Jnterpretations” of Regulation Z. This interpretation section provides that where a creditor effectively waives his right to retain or to acquire a mechanie’s or a materialmen’s lien he has not retained or acquired that security interest. Under this interpretation, if all security interests are waived, the transaction is not rescindable and the creditor does not have to comply with Section 125 of the Act and the regulation concerning the consumer’s right of rescission. _ It should be noted, however, that. Section 226.901 also provides that if, as a result of the transaction, a security interest is or will be retained or acquired by a subcontractor, workman or other person, the transaction is rescindable and the creditor then would be responsible for delivering the rescission notice and the ‘applicable disclosures and for delaying performance.

494-841—73——_45 698 FEDERAL TRADE COMMISSION ‘DECISIONS Opinion 81. F.C.

“' As indicated above, complaint counsel, so far as: remedy i as concerned, contends ‘for & new paragraph in the order’ which’ would: require respondenits-on past sales between July 1, 1969 and Je atiuary 18, 1971, for which they arranged the extension of consumer credit and in ‘which a security interest in real property was retained or acquired, to afford the customers involved; within fourteen days: of the. receipt ofa specified notice, ‘the opportunity to rescind ‘the traisactions: The: Commis: - sion’s ‘order; ‘he argues, can ‘and should ‘compel respondents to give - their credit: customers ‘what they are: entitled: to: under the Act ‘and regulations. He claims that such a’ remedy ‘will - -bear more than a reasonable relationship ‘to the violations: uncovered. Complaint counsel cites the: relief granted: by. the hearing: examiner Tn n another matter, Charnita, Iné.,et al., Docket No. 8829. a % : The Commission, on June 6, 1972: [80 7 PT om $99], ‘sited: its own decision in that’ Charnita matter, holding, among othér things; that: so far ascertain lot-buying customers were concerned those respondents bad “an unfulfilled and: continuing’ duty to give notice, in accordaiice with Section 226.9 of Regulation Z, of the customers’ right of rescission.” The Commission there further-stated that “[u]until ‘such notice ‘is given, respondents are thus in a continuing violation of the statute.” “We do not believe that: the same approach is justified on the facts in this proceeding. Charnita concerned land sales, not home improvement sales as in this case. The installations and alterations involved in home improvement transactions cannot easily be undone, if they can be undone at all. These improvements are generally of a permanent nature, such as the installation of a new furnace, new air conditioning equipment and the like. Removal of this equipment will often be impractical and possibly damaging to the house in which it is installed. Furthermore, removal could lead to additional expenses to the home owner. Inflation and other factors might easily make replacement more costly than was the original installation..In such a case a mere right to rescind, without more, would not restore the customer to his prior position and might be detrimental to him if the seller i in fact removed the equipment.

A provision in the Reserve Board’s regulation covering the right of rescission (Section 226. 9(d) of Regulation Z) appears to be directed to this situation. It states in part :

If the creditor has delivered any property to the customer, the customer may retain possession of it. Upon the performance of the creditor’s obligations under this section, the customer shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the customer shall tender its reasonable value. * * *” OORABBISS TING) BALL 0 699 678. L* Opinion’ - While the record here has not:been developed on: this point, it may ‘be assumed that in’ most of the ‘transactions return of the creditor’s ‘property would be impracticable and so cancellations would neces- ‘sarily raise problems as to the return of “reasonable value.” Very likely each situation would require individual negotiation to arrive at equitable results. We further assume in these situations of cancellation that, under the Board’s rule the customer would have the option of ‘removal or of tendering reasonable value, though this is not altogether ‘clear.

~~ This matter, therefore, raises: problems, as mentioned, of £ likely adjustments and negotiations not present in Charnita and the facts ‘developed in this record are inadequate to make appropriate determinations as to just how such. an order would work or what its impact svould be insofar as the home owners are concerned or the respondents. Without greater factual details on this point: we do not believe that an order Jooking to past transactions is justified on this record. ’ : In our view; it would not be helpful to remand this matter for the taking of additional eviderice on the scope of the order. Time is im- ‘portant in order to provide protection to.respondents’ future customers. We believe that a broader public interest will be served by seeking an immediate enforcement of a prospective order to céase and desist rather than to suffer the inevitable delays which would result from a remand for further facts.

In connection with the order, there is one further point which should be mentioned. The administrative law judge, in footnote 6, page 12 [p. 689, herein], stated that he assumed the correctness of respondents’ claim to the effect they were advised by the head of the New York office that their transactions because of their waiver policy were not rescindable. He based this assumption on the fact that the person referred to was not called to deny the claim. The next sentence in the footnote reads: “While as a matter of law such interpretation [by the New York office head] may carry little weight, from the standpoint ‘of the public interest in issuing an order in this matter it may be very significant.” Whether or not the administrative law judge’s assumption is warranted, we donot agree with the sentence above quoted if he means by this that the Commission i is thereby in some way not fully free to issue an appropriate order in this case in the public interest. No principle of equitable estoppel bars the Commission from the performance of its duty because of the mistaken action of subordinates. Double Kagle Lubricants v. F.T.C., 360 F. 2d 268, 270 (10th Cir. 1965). To prevent any misinterpretation on the issue we will strike the footnote.

700 FEDERAL TRADE: :COMMISSION «DECISIONS Final Order 81 E.T.C.

Accordingly, complaint counsel’s appeal will be- granted to the’extent above indicated and otherwise denied. The initial decision of | the hearing examiner will be modified so as to conform to the views . expressed in this opinion and as modified adopted as the decision of the Commission.

Finan Ordrr This matter having been heard by the Commission upon complaint | counsel’s appeal from the administrative law judge’s initial decision and upon briefs and oral argument in support thereof and in opposi- - tion thereto; and The ‘Commission having rendered its decision determining that the initial decision should be modified in accordance with the views and for the reasons stated in the accompanying opinion and as modified adopted as the decision of the Commission : It is ordered, That pages 123 and 13 [supra at 688-90] of the administrative law judge’s initial decision be modified as follows: - witnesses made it very apparent in their testimony that they could not afford the large expenditures required and had to secure financing. We turn next to the far more serious question of the waiver of lien by respondents. Respondents contend that they waived any lien they would secure on ‘the property. Thus, they claim the transaction does not create any security interest and accordingly it is not rescindable. Respondents further claim that an interpretation to this effect was secured from the Chief of the New York Office of the Commission.

Complaint counsel take the position that even though the waiver might be effective to prevent respondents from securing a lien on the property for themselves, the New York lien law creates a lien in favor of their workmen and their material suppliers in the event that the wages or material charges are not paid *® and it was the purpose of the Truth in Lending legislation to require that all liens be considered even though not under the control of the lender. The position of complaint counsel is correct for the reasons stated by the court in Gardner and North Roofing and Siding Corporation v. Board of Governors of the Federal Reserve Board, 464 F. 2d 888 (D.C. Cir. 1972) ; 4 CCH Consumer Credit Guide § 99159. Accordingly, respondents’ transactions shown on this record were rescindable and subject to the requirements of § 226.9 of Regulation Z governing the customer’s right to rescind. ; Paragraph Five of the complaint contains the following charge: “In connection with the consumer credit transactions set forth in Paragraphs Three and Four” hereof, respondents. prepare documents containing consumer credit cost disclosures required by Section 226.8 of Regulation Z and obtain from customers written acknowledgment of receipt of these disclosures, but in some instances nevertheless fail to provide the customer with a copy of such disclosures, as required by Section 226.8(a) of Regulation Z.”

This it seems to the hearing examiner includes a charge that the customer is not provided with the cost disclosures prior to the time he or she signs the sales FABBIS, INC., ET AL. 701 678 ; Final Order proposal.. This is true. because Section 226.8(a) of Regulation Z specifically provides:

5 1 3 1 1 2 694 695 201 45 22.258644 *McKinneys5 1 3 1 1 3 910 707 90 27 96.251564 “Liens 1 3 1 1 4 1013 696 89 39 96.251564 Law”5 1 3 1 1 5 1118 711 121 25 96.810356 Volumes 1 3 1 1 6 1254 701 113 36 96.950592 Articles 1 3 1 1 7 1380 711 24 29 94.374100 1,5 1 3 1 1 8 1420 711 59 25 93.222206 1-8.4 1 3 1 2 0 691 749 1074 40 -1 5 1 3 1 2 1 691 749 12 15 64.002350 75 1 3 1 2 2 712 752 63 24 64.002350 Thes 1 3 1 2 3 782 753 168 29 96.373405 paragraphs 1 3 1 2 4 961 753 133 24 96.202347 referred5 1 3 1 2 5 1102 753 31 24 96.768890 to5 1 3 1 2 6 1142 753 123 29 96.541710 provides 1 3 1 2 7 1272 759 35 19 95.052109 as5 1 3 1 2 8 1315 754 133 25 95.043259 follows:5 1 3 1 2 9 1762 788 3 1 0.000000 ;4 1 3 1 3 0 696 794 1289 31 -1 5 1 3 1 3 1 696 794 256 25 53.689426 “PARAGRAPHS 1 3 1 3 2 962 794 152 26 75.906311 THREE:5 1 3 1 3 3 1128 795 37 25 94.890594 In5 1 3 1 3 4 1177 795 52 26 94.890594 thes 1 3 1 3 5 1238 795 145 30 96.346512 ordinary5 1 3 1 3 6 1394 798 104 23 96.097282 courses 1 3 1 3 7 1508 796 62 25 96.097282 ands 1 3 1 3 8 1580 795 126 26 95.992371 conducts 1 3 1 3 9 1717 797 33 24 76.133690 ‘of5 1 3 1 3 10 1761 797 78 24 96.424500 theirs 1 3 1 3 11 1850 797 135 25 96.469505 business3 1 3 2 0 0 659 836 1326 32 -1 4 1 3 2 1 0 659 836 1326 32 -1 5 1 3 2 1 1 659 842 39 20 95.604828 as5 1 3 2 1 2 712 836 164 31 95.604828 aforesaid,5 1 3 2 1 3 892 838 192 29 61.012100 respondents5 1 3 2 1 4 1100 843 135 25 61.012100 arrange,5 1 3 2 1 5 1251 839 64 24 96.145477 ands 1 3 2 1 6 1330 837 51 26 96.503975 for5 1 3 2 1 7 1398 841 80 23 96.287849 some5 1 3 2 1 8 1495 838 72 25 93.706093 times 1 3 2 1 9 1583 839 61 24 93.706093 lasts 1 3 2 1 10 1659 839 69 28 95.915092 past5 1 3 2 1 11 1744 839 148 29 95.739838 regularly5 1 3 2 1 12 1909 839 76 25 96.791626 have3 1 3 3 0 0 655 879 1345 413 -1 4 1 3 3 1 0 658 879 1326 34 -1 5 1 3 3 1 1 658 880 154 29 96.640671 arranged,5 1 3 3 1 2 832 879 48 25 95.054688 for5 1 3 3 1 3 898 880 51 24 95.054688 thes 1 3 3 1 4 965 880 155 31 96.229927 extensions 1 3 3 1 5 1137 881 32 27 94.419182 of5 1 3 3 1 6 1187 886 153 19 95.515976 consumers 1 3 3 1 7 1357 881 103 30 95.774628 credit,5 1 3 3 1 8 1478 886 33 20 96.661179 as5 1 3 3 1 9 1531 881 161 32 89.306702 ‘consumers 1 3 3 1 10 1707 881 103 32 96.256645 credit’5 1 3 3 1 11 1827 881 28 25 81.773300 is5 1 3 3 1 12 1870 881 114 25 96.569016 defined4 1 3 3 2 0 657 920 1327 42 -1 5 1 3 3 2 1 657 920 33 25 95.882065 in5 1 3 3 2 2 712 920 178 38 92.817024 Regulations 1 3 3 2 3 910 922 32 29 92.727486 Z,5 1 3 3 2 4 967 922 51 26 96.205475 thes 1 3 3 2 5 1039 922 222 38 95.969910 implementing5 1 3 3 2 6 1283 923 166 36 96.493652 regulations 1 3 3 2 7 1461 923 43 31 96.909668 of5 1 3 3 2 8 1524 923 52 25 96.909668 thes 1 3 3 2 9 1592 923 101 39 84.269455 Truth5 1 3 3 2 10 1714 923 31 25 96.283440 in5 1 3 3 2 11 1767 923 132 30 96.503029 Lending5 1 3 3 2 12 1919 923 65 31 35.557350 Act,4 1 3 3 3 0 659 963 1324 32 -1 5 1 3 3 3 1 659 963 70 30 96.435188 duly5 1 3 3 3 2 749 964 204 30 96.033218 promulgated5 1 3 3 3 3 972 965 38 29 96.851166 by5 1 3 3 3 4 1029 965 52 25 95.767311 thes 1 3 3 3 5 1099 965 99 25 95.767311 Boards 1 3 3 3 6 1217 965 33 25 96.689751 of5 1 3 3 3 7 1268 963 167 27 96.386131 Governors5 1 3 3 3 8 1452 965 33 25 96.446121 of5 1 3 3 3 9 1502 965 51 25 96.357056 thes 1 3 3 3 10 1570 965 125 30 96.654793 Federal5 1 3 3 3 11 1712 965 129 25 96.712372 Reserves 1 3 3 3 12 1860 965 123 30 96.217186 System.4 1 3 3 4 0 694 1005 1289 39 -1 5 1 3 3 4 1 694 1005 253 26 96.518944 “PARAGRAPHS 1 3 3 4 2 964 1006 121 26 95.988808 FOUR:5 1 3 3 4 3 1105 1007 184 30 96.114510 Subsequent5 1 3 3 4 4 1304 1008 31 24 95.849808 to5 1 3 3 4 5 1353 1008 71 28 96.167221 July5 1 3 3 4 6 1442 1008 24 30 96.090820 1,5 1 3 3 4 7 1483 1007 78 31 96.090820 1969,5 1 3 3 4 8 1579 1008 192 36 96.449806 respondents5 1 3 3 4 9 1789 1008 32 24 95.975998 in5 1 3 3 4 10 1838 1009 51 24 93.154457 thes 1 3 3 4 11 1906 1009 77 24 92.826149 ordi-4 1 3 3 5 0 659 1046 1325 34 -1 5 1 3 3 5 1 659 1053 76 24 95.446312 nary.5 1 3 3 5 2 750 1054 104 20 96.190414 courses 1 3 3 5 3 868 1049 61 25 96.466339 ands 1 3 3 5 4 939 1049 130 26 96.052864 conducts 1 3 3 5 5 1084 1049 34 25 96.379318 of5 1 3 3 5 6 1132 1049 79 26 96.115120 theirs 1 3 3 5 7 1226 1050 136 25 96.050537 business5 1 3 3 5 8 1376 1050 61 25 95.811829 ands 1 3 3 5 9 1450 1049 33 25 95.811829 in5 1 3 3 5 10 1498 1047 170 29 96.618309 connections 1 3 3 5 11 1684 1046 75 29 91.467918 with5 1 3 3 5 12 1771 1050 79 25 91.467918 theirs 1 3 3 5 13 1862 1056 122 24 92.352600 arrang-4 1 3 3 6 0 658 1089 1325 33 -1 5 1 3 3 6 1 658 1085 56 42 59.151711 ings 1 3 3 6 2 731 1091 48 25 84.864410 for5 1 3 3 6 3 799 1097 154 19 96.605446 consumers 1 3 3 6 4 973 1091 101 31 96.357124 credit,5 1 3 3 6 5 1095 1091 77 26 96.432724 have5 1 3 3 6 6 1192 1092 117 29 96.247948 caused,5 1 3 3 6 7 1328 1093 62 24 94.703522 ands 1 3 3 6 8 1408 1098 54 19 94.703522 ares 1 3 3 6 9 1480 1092 130 30 96.480103 causing,5 1 3 3 6 10 1632 1093 161 25 96.023415 customers5 1 3 3 6 11 1813 1093 31 24 96.714005 to5 1 3 3 6 12 1862 1094 121 25 96.390671 execute4 1 3 3 7 0 657 1132 1324 33 -1 5 1 3 3 7 1 657 1133 89 24 96.400322 retails 1 3 3 7 2 762 1132 185 26 95.269409 installments 1 3 3 7 3 963 1134 162 29 44.769913 contracts,5 1 3 3 7 4 1137 1133 103 27 44.769913 herein5 1 3 3 7 5 1257 1134 134 25 96.391869 referred5 1 3 3 7 6 1408 1135 31 24 96.640724 to5 1 3 3 7 7 1458 1141 34 19 95.048584 as5 1 3 3 7 8 1510 1135 60 25 95.048584 ‘thes 1 3 3 7 9 1588 1134 153 31 96.376602 contract’,5 1 3 3 7 10 1755 1135 98 25 96.564438 which5 1 3 3 7 11 1870 1135 111 26 96.591827 results4 1 3 3 8 0 658 1175 1324 36 -1 5 1 3 3 8 1 658 1181 35 30 96.975372 or5 1 3 3 8 2 704 1181 72 23 96.319366 may5 1 3 3 8 3 793 1175 93 25 96.004387 results 1 3 3 8 4 901 1175 32 25 95.765823 in5 1 3 3 8 5 949 1181 19 20 95.765823 a5 1 3 3 8 6 982 1176 131 33 96.348724 security5 1 3 3 8 7 1128 1176 125 26 95.756165 interests 1 3 3 8 8 1266 1176 89 30 95.696945 being.5 1 3 3 8 9 1369 1177 136 25 95.596985 retained5 1 3 3 8 10 1519 1184 34 18 96.824562 or5 1 3 3 8 11 1566 1177 140 30 96.875885 acquired5 1 3 3 8 12 1720 1177 32 24 96.521729 in5 1 3 3 8 13 1767 1178 62 25 96.226875 real5 1 3 3 8 14 1844 1178 138 29 96.790619 property4 1 3 3 9 0 658 1216 1342 38 -1 5 1 3 3 9 1 658 1217 97 26 96.465599 which5 1 3 3 9 2 772 1217 28 25 96.537308 is5 1 3 3 9 3 817 1218 73 24 96.301949 used5 1 3 3 9 4 910 1223 33 19 96.819153 or5 1 3 3 9 5 960 1217 28 26 96.688278 is5 1 3 3 9 6 1005 1216 141 32 95.970108 expected5 1 3 3 9 7 1163 1219 32 24 96.747246 to5 1 3 3 9 8 1210 1219 37 25 95.529778 be5 1 3 3 9 9 1264 1220 73 24 95.441154 used5 1 3 3 9 10 1355 1225 36 19 69.804634 as.5 1 3 3 9 11 1407 1219 51 25 69.804634 thes 1 3 3 9 12 1474 1219 146 37 96.288658 principals 1 3 3 9 13 1637 1220 151 25 96.090637 residences 1 3 3 9 14 1804 1220 33 24 96.887474 of5 1 3 3 9 15 1852 1220 52 25 93.270584 thes 1 3 3 9 16 1920 1226 80 28 38.853336 cus-_4 1 3 3 10 0 655 1258 1327 47 -1 5 1 3 3 10 1 655 1259 104 26 96.918121 tomer.5 1 3 3 10 2 778 1260 64 25 94.544998 Thes 1 3 3 10 3 853 1261 169 25 80.500359 customers5 1 3 3 10 4 1041 1255 122 35 96.191231 thereby5 1 3 3 10 5 1182 1262 77 24 96.189575 have5 1 3 3 10 6 1277 1261 51 25 96.584724 thes 1 3 3 10 7 1347 1262 82 29 96.811623 rights 1 3 3 10 8 1446 1253 31 34 96.443565 to5 1 3 3 10 9 1495 1261 117 26 91.306915 rescind5 1 3 3 10 10 1629 1262 80 38 67.274719 such5 1 3 3 10 11 1720 1258 209 47 96.231522 transactions,5 1 3 3 10 12 1948 1268 34 19 96.736893 as3 1 3 4 0 0 656 1301 747 32 -1 4 1 3 4 1 0 656 1301 747 32 -1 5 1 3 4 1 1 656 1302 160 30 96.333313 provided5 1 3 4 1 2 808 1309 31 18 96.629349 in5 1 3 4 1 3 851 1301 117 27 93.257454 Sections 1 3 4 1 4 976 1302 136 31 91.592400 226.9(a)5 1 3 4 1 5 1126 1303 32 25 96.833122 of5 1 3 4 1 6 1167 1295 179 37 93.101540 Regulations 1 3 4 1 7 1355 1304 48 25 74.059532 Z.”3 1 3 5 0 0 697 1355 1286 67 -1 4 1 3 5 1 0 697 1355 1286 67 -1 5 1 3 5 1 1 697 1357 39 32 93.807785 It5 1 3 5 1 2 750 1357 30 32 93.807785 is5 1 3 5 1 3 794 1357 141 42 95.517387 furthers 1 3 5 1 4 949 1358 155 42 96.348602 ordered,5 1 3 5 1 5 1117 1358 95 33 96.387802 That5 1 3 5 1 6 1228 1358 156 34 96.043831 footnotes 1 3 5 1 7 1399 1361 50 38 96.043831 10,5 1 3 5 1 8 1464 1369 89 32 96.638123 pages 1 3 5 1 9 1570 1362 40 30 96.567825 145 1 3 5 1 10 1627 1355 124 67 78.767677 [supra5 1 3 5 1 11 1765 1359 116 42 96.460564 690],5 1 3 5 1 12 1873 1371 37 21 96.948784 in5 1 3 5 1 13 1924 1359 59 34 96.861542 thee 1 3 6 0 0 655 1407 1165 45 -1 4 1 3 6 1 0 655 1407 1165 45 -1 5 1 3 6 1 1 655 1407 117 33 95.036545 initials 1 3 6 1 2 782 1408 150 33 96.417229 decisions 1 3 6 1 3 940 1409 53 42 96.726524 be,5 1 3 6 1 4 1001 1409 72 32 96.726524 ands 1 3 6 1 5 1082 1408 30 33 96.859055 it5 1 3 6 1 6 1119 1409 146 43 96.944405 hereby5 1 3 6 1 7 1256 1420 40 31 96.958817 is,5 1 3 6 1 8 1306 1410 224 33 96.531723 renumbered5 1 3 6 1 9 1540 1412 29 31 96.997299 8.5 1 3 6 1 10 1803 1422 17 13 1.565231 .3 1 3 7 0 0 657 1458 1324 805 -1 4 1 3 7 1 0 695 1458 1281 45 -1 5 1 3 7 1 1 695 1459 39 32 92.622627 It5 1 3 7 1 2 749 1459 38 35 71.238632 ts.5 1 3 7 1 3 796 1458 141 43 86.448303 furthers 1 3 7 1 4 953 1459 153 43 95.550888 ordered,5 1 3 7 1 5 1122 1460 95 32 95.550888 That5 1 3 7 1 6 1234 1460 196 33 96.844772 conclusions 1 3 7 1 7 1445 1463 18 29 90.151184 35 1 3 7 1 8 1480 1472 46 21 95.934937 on5 1 3 7 1 9 1542 1465 89 41 96.563049 pages 1 3 7 1 10 1648 1463 39 31 96.851280 165 1 3 7 1 11 1708 1460 123 43 96.186462 [supra5 1 3 7 1 12 1846 1465 37 29 96.023232 at5 1 3 7 1 13 1898 1461 78 41 96.837029 691]4 1 3 7 2 0 657 1481 1324 76 -1 5 1 3 7 2 1 657 1509 40 33 96.926231 of5 1 3 7 2 2 710 1509 60 33 96.496796 thes 1 3 7 2 3 783 1509 116 33 95.963829 initials 1 3 7 2 4 913 1509 150 34 95.963829 decisions 1 3 7 2 5 1070 1481 57 76 96.874077 be,5 1 3 7 2 6 1140 1511 70 32 96.213318 ands 1 3 7 2 7 1222 1510 40 33 54.662418 it5 1 3 7 2 8 1264 1511 150 42 54.662418 hereby5 1 3 7 2 9 1404 1509 41 42 97.010277 is,5 1 3 7 2 10 1456 1511 164 33 96.446762 modified5 1 3 7 2 11 1630 1514 40 30 96.853195 to5 1 3 7 2 12 1681 1512 82 32 96.753418 reads 1 3 7 2 13 1777 1522 37 22 96.956627 as5 1 3 7 2 14 1827 1512 154 33 96.693405 follows:4 1 3 7 3 0 784 1548 1197 61 -1 5 1 3 7 3 1 784 1562 30 31 93.340630 3.5 1 3 7 3 2 835 1548 250 61 96.773178 Respondents,5 1 3 7 3 3 1108 1560 39 33 96.780510 in5 1 3 7 3 4 1169 1561 111 33 96.092415 credits 1 3 7 3 5 1302 1561 231 42 96.201576 transactions5 1 3 7 3 6 1554 1562 121 32 96.601799 shown5 1 3 7 3 7 1698 1562 37 32 96.400055 in5 1 3 7 3 8 1755 1562 74 33 96.400055 this5 1 3 7 3 9 1851 1562 130 40 96.785629 record,4 1 3 7 4 0 720 1610 1260 45 -1 5 1 3 7 4 1 720 1610 173 34 44.866280 violated5 1 3 7 4 2 904 1611 61 33 96.309990 thes 1 3 7 4 3 977 1611 138 33 96.692635 Truth5 1 3 7 4 4 1105 1623 37 21 96.663094 in5 1 3 7 4 5 1153 1612 162 43 96.102142 Lending5 1 3 7 4 6 1326 1612 71 33 93.650093 Acts 1 3 7 4 7 1409 1613 69 31 93.650093 ands 1 3 7 4 8 1492 1612 138 35 93.251869 Sections 1 3 7 4 9 1641 1612 155 43 90.045822 226.9(b)5 1 3 7 4 10 1816 1612 40 32 93.270874 of5 1 3 7 4 11 1867 1613 113 41 92.385063 Regu-4 1 3 7 5 0 739 1662 1240 44 -1 5 1 3 7 5 1 739 1662 135 33 93.195740 ulations 1 3 7 5 2 891 1662 27 33 93.142303 Z5 1 3 7 5 3 935 1662 47 43 96.891403 by5 1 3 7 5 4 1000 1662 130 43 96.836166 failing5 1 3 7 5 5 1147 1666 36 29 96.741814 to5 1 3 7 5 6 1200 1663 147 43 96.535149 provides 1 3 7 5 7 1364 1662 92 33 96.558502 theirs 1 3 7 5 8 1473 1667 185 28 96.474419 customers5 1 3 7 5 9 1676 1663 86 32 96.922462 with5 1 3 7 5 10 1778 1663 60 32 93.302719 thes 1 3 7 5 11 1854 1674 125 32 91.974205 oppor-4 1 3 7 6 0 719 1713 1259 43 -1 5 1 3 7 6 1 719 1713 134 42 90.675934 _tunity5 1 3 7 6 2 867 1716 36 30 96.789818 to5 1 3 7 6 3 919 1713 135 33 96.568336 rescind5 1 3 7 6 4 1069 1713 70 33 96.828865 ands 1 3 7 6 5 1153 1713 115 42 96.377266 copies5 1 3 7 6 6 1282 1714 41 33 96.835938 of5 1 3 7 6 7 1339 1725 21 21 96.736015 a5 1 3 7 6 8 1374 1714 113 32 96.579590 notices 1 3 7 6 9 1502 1715 41 33 96.829811 of5 1 3 7 6 10 1556 1714 60 32 96.555367 thes 1 3 7 6 11 1632 1714 97 42 96.523827 rights 1 3 7 6 12 1743 1714 41 32 96.523827 of5 1 3 7 6 13 1799 1713 179 33 96.537132 rescission4 1 3 7 7 0 738 1763 1241 43 -1 5 1 3 7 7 1 738 1763 38 32 96.727722 in5 1 3 7 7 2 796 1764 204 33 96.450111 accordance5 1 3 7 7 3 1017 1764 87 33 96.612518 with5 1 3 7 7 4 1120 1764 60 33 96.407799 thes 1 3 7 7 5 1198 1764 205 42 96.427895 regulation.5 1 3 7 7 6 1422 1764 248 42 96.764183 Respondents,5 1 3 7 7 7 1687 1764 38 33 96.819107 in5 1 3 7 7 8 1741 1764 111 33 92.004364 credits 1 3 7 7 9 1867 1767 112 30 91.650955 trans-4 1 3 7 8 0 739 1814 1241 43 -1 5 1 3 7 8 1 739 1814 130 40 96.892426 actions5 1 3 7 8 2 885 1815 118 32 96.467613 shown5 1 3 7 8 3 1017 1826 45 21 95.910851 on5 1 3 7 8 4 1076 1815 72 33 95.910851 this5 1 3 7 8 5 1162 1815 131 42 93.079971 record,5 1 3 7 8 6 1306 1815 166 33 92.850174 violiated5 1 3 7 8 7 1486 1815 60 33 96.404678 thes 1 3 7 8 8 1559 1816 114 32 96.589890 Truth5 1 3 7 8 9 1687 1815 37 32 96.389114 in5 1 3 7 8 10 1736 1815 162 42 96.306992 Lending5 1 3 7 8 11 1910 1815 70 33 96.765144 Acta 1 3 7 9 0 739 1864 1240 44 -1 5 1 3 7 9 1 739 1865 69 32 95.758354 ands 1 3 7 9 2 826 1864 137 35 93.297592 Sections 1 3 7 9 3 979 1866 151 42 91.270897 226.9(c)5 1 3 7 9 4 1154 1866 40 32 96.271423 of5 1 3 7 9 5 1209 1865 211 43 92.963310 Regulations 1 3 7 9 6 1435 1867 25 31 92.963310 Z5 1 3 7 9 7 1477 1866 46 42 96.704178 by5 1 3 7 9 8 1540 1866 128 42 96.472015 failing5 1 3 7 9 9 1681 1869 38 29 96.879448 to5 1 3 7 9 10 1734 1866 101 42 96.414879 delays 1 3 7 9 11 1851 1865 128 43 96.680618 during4 1 3 7 10 0 736 1915 1243 45 -1 5 1 3 7 10 1 736 1915 61 33 96.961426 thes 1 3 7 10 2 816 1916 181 43 96.517097 three-days 1 3 7 10 3 1018 1916 179 34 96.743248 rescission5 1 3 7 10 4 1216 1917 122 43 96.154930 periods 1 3 7 10 5 1359 1917 143 42 96.188408 making5 1 3 7 10 6 1521 1917 158 42 96.502823 physical5 1 3 7 10 7 1698 1917 148 41 96.756042 changes5 1 3 7 10 8 1864 1916 37 32 96.785141 in5 1 3 7 10 9 1921 1917 58 31 96.953285 thea 1 3 7 11 0 737 1966 1242 45 -1 5 1 3 7 11 1 737 1967 196 32 91.966248 customer’s5 1 3 7 11 2 948 1971 169 39 96.835007 property5 1 3 7 11 3 1132 1968 71 32 95.652504 ands 1 3 7 11 4 1219 1968 38 32 95.653397 in5 1 3 7 11 5 1273 1968 59 33 96.912766 thes 1 3 7 11 6 1348 1967 219 44 96.786568 performing5 1 3 7 11 7 1583 1968 40 32 96.678505 of5 1 3 7 11 8 1639 1968 94 32 96.921303 works 1 3 7 11 9 1748 1967 71 32 96.998230 ands 1 3 7 11 10 1834 1966 145 33 96.843086 services4 1 3 7 12 0 737 2017 1242 44 -1 5 1 3 7 12 1 737 2017 59 33 96.925468 for5 1 3 7 12 2 809 2018 84 32 96.953362 such5 1 3 7 12 3 907 2022 195 29 96.380959 customers.5 1 3 7 12 4 1116 2019 74 32 96.791229 Thes 1 3 7 12 5 1204 2019 103 32 95.846352 claims 1 3 7 12 6 1319 2019 79 32 95.846352 that5 1 3 7 12 7 1411 2019 149 42 96.128815 security5 1 3 7 12 8 1573 2019 158 31 96.870316 interests5 1 3 7 12 9 1744 2028 89 22 96.676994 were5 1 3 7 12 10 1844 2017 135 33 95.813278 waived4 1 3 7 13 0 735 2067 1240 44 -1 5 1 3 7 13 1 735 2067 31 34 96.040154 is5 1 3 7 13 2 785 2068 147 42 96.409935 rejected5 1 3 7 13 3 950 2069 142 33 93.144623 because5 1 3 7 13 4 1109 2069 97 32 93.144623 there5 1 3 7 13 5 1224 2069 30 32 96.863312 is5 1 3 7 13 6 1271 2080 46 21 96.596535 no5 1 3 7 13 7 1334 2069 159 42 96.126274 showings 1 3 7 13 8 1510 2070 77 31 0.000000 that.5 1 3 7 13 9 1605 2069 48 32 0.000000 all5 1 3 7 13 10 1672 2069 85 32 83.227997 liens5 1 3 7 13 11 1777 2068 134 33 96.341202 created5 1 3 7 13 12 1928 2067 47 43 96.803490 by4 1 3 7 14 0 737 2119 1241 42 -1 5 1 3 7 14 1 737 2119 180 42 96.432457 operations 1 3 7 14 2 940 2119 41 33 95.661560 of5 1 3 7 14 3 1005 2120 78 41 95.805092 law,5 1 3 7 14 4 1107 2121 85 32 96.756287 such5 1 3 7 14 5 1217 2131 37 22 93.281891 as5 1 3 7 14 6 1279 2120 202 33 91.938721 mechanic’s5 1 3 7 14 7 1506 2120 87 33 96.631943 liens5 1 3 7 14 8 1617 2120 40 32 96.499207 of5 1 3 7 14 9 1681 2120 183 41 96.648560 workmen,5 1 3 7 14 10 1889 2130 89 24 96.948784 were4 1 3 7 15 0 736 2169 142 34 -1 5 1 3 7 15 1 736 2169 142 34 95.620071 waived.4 1 3 7 16 0 688 2220 1286 43 -1 5 1 3 7 16 1 688 2220 24 33 48.057442 It5 1 3 7 16 2 736 2232 31 22 48.057442 is5 1 3 7 16 3 777 2221 141 42 96.816307 furthers 1 3 7 16 4 929 2220 154 43 96.537651 ordered,5 1 3 7 16 5 1095 2222 93 32 96.574379 That5 1 3 7 16 6 1197 2222 60 32 96.913261 thes 1 3 7 16 7 1267 2222 105 32 96.925713 orders 1 3 7 16 8 1382 2221 204 51 96.925713 contained5 1 3 7 16 9 1577 2233 38 21 96.956062 in5 1 3 7 16 10 1624 2222 61 32 96.981407 thes 1 3 7 16 11 1696 2220 115 34 96.487907 initials 1 3 7 16 12 1824 2220 150 34 96.487907 decision2 1 4 0 0 0 651 2247 565 58 -1 3 1 4 1 0 0 651 2247 565 58 -1 4 1 4 1 1 0 651 2247 565 58 -1 5 1 4 1 1 1 651 2271 41 34 96.293022 be5 1 4 1 1 2 703 2270 162 35 96.293022 modified5 1 4 1 1 3 874 2275 37 30 95.414536 to5 1 4 1 1 4 921 2272 82 33 95.414536 reads 1 4 1 1 5 1015 2283 37 22 96.777832 as5 1 4 1 1 6 1062 2247 154 58 92.655258 follows:5 1 4 1 1 7 1208 2284 8 6 82.994217 :2 1 5 0 0 0 1258 2376 107 23 -1 3 1 5 1 0 0 1258 2376 107 23 -1 4 1 5 1 1 0 1258 2376 107 23 -1 5 1 5 1 1 1 1258 2376 107 23 96.769203 ORDER2 1 6 0 0 0 729 2448 1247 298 -1 3 1 6 1 0 0 729 2448 1247 298 -1 4 1 6 1 1 0 778 2448 1198 44 -1 5 1 6 1 1 1 778 2449 22 32 96.112694 It5 1 6 1 1 2 802 2449 66 41 95.463402 is5 1 6 1 1 3 891 2449 154 42 95.463402 ordered,5 1 6 1 1 4 1068 2449 95 33 95.977280 That5 1 6 1 1 5 1185 2450 225 42 93.302055 respondents5 1 6 1 1 6 1433 2449 139 42 92.368851 Fabbis,5 1 6 1 1 7 1595 2450 84 41 92.551933 Inc.,5 1 6 1 1 8 1702 2460 20 21 95.124123 a5 1 6 1 1 9 1745 2448 231 43 95.124123 corporation,4 1 6 1 2 0 735 2499 1240 44 -1 5 1 6 1 2 1 735 2499 107 43 96.026566 doing5 1 6 1 2 2 857 2500 154 33 96.026566 business5 1 6 1 2 3 1029 2512 37 21 96.725555 as5 1 6 1 2 4 1083 2501 195 38 95.498322 Rochester,5 1 6 1 2 5 1287 2500 190 43 96.169067 Plumbing5 1 6 1 2 6 1494 2500 69 33 96.336319 ands 1 6 1 2 7 1580 2500 156 42 96.387054 Heating5 1 6 1 2 8 1753 2500 222 33 96.705276 Contractors4 1 6 1 3 0 733 2550 1240 43 -1 5 1 6 1 3 1 733 2560 40 22 96.992065 or5 1 6 1 3 2 792 2550 104 33 95.231522 under5 1 6 1 3 3 913 2562 64 31 95.231522 any5 1 6 1 3 4 995 2551 100 32 95.770638 others 1 6 1 3 5 1108 2562 111 31 95.770638 name,5 1 6 1 3 6 1234 2545 53 54 82.496994 ands 1 6 1 3 7 1281 2551 320 42 31.834023 -its-officers,5 1 6 1 3 8 1539 2545 59 54 58.856773 ands 1 6 1 3 9 1609 2551 160 38 42.956535 Richards 1 6 1 3 10 1784 2551 34 33 84.609909 J.5 1 6 1 3 11 1833 2551 140 35 84.782349 Fabrizi4 1 6 1 4 0 729 2601 1241 43 -1 5 1 6 1 4 1 729 2601 71 32 96.551208 ands 1 6 1 4 2 814 2602 118 33 96.551208 James5 1 6 1 4 3 947 2602 34 33 93.074409 J.5 1 6 1 4 4 999 2602 115 42 91.002213 Rebis,5 1 6 1 4 5 1129 2602 237 42 95.910950 individually5 1 6 1 4 6 1381 2602 69 33 96.098938 ands 1 6 1 4 7 1466 2614 39 21 96.664177 as5 1 6 1 4 8 1519 2602 128 33 96.511566 officers5 1 6 1 4 9 1663 2602 40 32 96.464409 of5 1 6 1 4 10 1719 2602 77 32 93.289474 said5 1 6 1 4 11 1812 2613 158 30 92.253510 corpora-4 1 6 1 5 0 730 2651 1243 44 -1 5 1 6 1 5 1 730 2651 85 42 96.393448 tion,5 1 6 1 5 2 834 2652 68 32 96.309036 ands 1 6 1 5 3 920 2653 234 41 96.309036 respondents’5 1 6 1 5 4 1171 2656 132 39 96.375801 agents,5 1 6 1 5 5 1318 2653 285 42 96.569260 representatives5 1 6 1 5 6 1619 2653 69 32 96.659447 ands 1 6 1 5 7 1705 2653 200 42 93.190399 employees,5 1 6 1 5 8 1922 2652 51 33 92.865402 di-4 1 6 1 6 0 730 2702 1243 44 -1 5 1 6 1 6 1 730 2702 109 43 96.416710 rectly5 1 6 1 6 2 862 2713 40 22 96.658966 or5 1 6 1 6 3 922 2703 154 43 96.497749 through5 1 6 1 6 4 1097 2715 69 31 96.632545 any5 1 6 1 6 5 1186 2707 181 39 96.517853 corporate5 1 6 1 6 6 1390 2715 39 21 96.761314 or5 1 6 1 6 7 1450 2704 99 32 96.203377 others 1 6 1 6 8 1568 2704 126 41 96.308151 device,5 1 6 1 6 9 1715 2704 36 31 96.308151 in5 1 6 1 6 10 1774 2704 199 32 96.875816 connection FEDERAL TRADE. COMMISSION: DECISIONS - Final Order 81 E.T.G:

with. any consumer credit sale, as “consumer credit” and.“credit sale” 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 et seg. )s do forthwith cease vand desist from :

1. Failing to provide any customer prior to consummation ' of the transaction with a copy,-which the customer may ‘re- ~ tain, of all disclosures required to be made by Section’ 226.8 of Regulation Z, in the form and manner prescribed therein, as5 1 6 5 2 2 991 975 157 48 96.432373 required5 1 6 5 2 3 1161 980 47 43 97.011765 by5 1 6 5 2 4 1225 956 138 70 96.641777 Sections 1 6 5 2 5 1378 983 154 43 89.208786 226.8(a)5 1 6 5 2 6 1555 985 40 32 96.186668 of5 1 6 5 2 7 1608 986 208 41 93.250549 Regulations 1 6 5 2 8 1831 984 35 36 87.059898 Z.3 1 6 6 0 0 973 1031 1118 54 -1 4 1 6 6 1 0 973 1031 1118 54 -1 5 1 6 6 1 1 973 1033 34 36 82.505615 2.5 1 6 6 1 2 1029 1031 177 46 96.191696 Failing,5 1 6 6 1 3 1198 1043 36 22 96.970978 in5 1 6 6 1 4 1252 1044 67 32 96.594986 any5 1 6 6 1 5 1336 1034 211 37 96.558380 transactions 1 6 6 1 6 1561 1034 40 34 95.585533 in5 1 6 6 1 7 1617 1035 114 34 95.585533 which5 1 6 6 1 8 1747 1043 19 28 94.912628 a5 1 6 6 1 9 1783 1033 155 52 88.220322 security.5 1 6 6 1 10 1949 1028 142 45 92.250877 interest3 1 6 7 0 0 918 1082 1172 49 -1 4 1 6 7 1 0 918 1082 1172 49 -1 5 1 6 7 1 1 918 1080 47 33 50.955376 -is5 1 6 7 1 2 983 1092 40 21 96.673615 or5 1 6 7 1 3 1042 1082 75 33 95.220360 will5 1 6 7 1 4 1132 1082 50 33 39.267548 be:5 1 6 7 1 5 1192 1083 154 33 39.267548 retained5 1 6 7 1 6 1360 1091 44 25 95.453552 or5 1 6 7 1 7 1415 1085 195 43 96.060196 acquired5 1 6 7 1 8 1601 1097 48 21 0.000000 in5 1 6 7 1 9 1647 1087 80 32 0.000000 ‘real5 1 6 7 1 10 1745 1092 174 39 89.550674 property:5 1 6 7 1 11 1928 1085 162 37 84.161957 which:is3 1 6 8 0 0 935 1131 1155 58 -1 4 1 6 8 1 0 935 1131 1155 58 -1 5 1 6 8 1 1 935 1131 92 33 96.149498 used5 1 6 8 1 2 1036 1142 40 22 96.545158 or5 1 6 8 1 3 1094 1132 30 45 96.545158 is5 1 6 8 1 4 1142 1134 168 43 96.319321 expected5 1 6 8 1 5 1321 1138 37 29 96.283569 to5 1 6 8 1 6 1376 1135 42 32 96.663986 be5 1 6 8 1 7 1436 1136 84 32 96.742661 used5 1 6 8 1 8 1537 1145 40 24 96.901917 as5 1 6 8 1 9 1594 1137 58 42 96.968925 thes 1 6 8 1 10 1671 1137 172 52 96.748756 principals 1 6 8 1 11 1862 1135 180 37 95.144249 residences 1 6 8 1 12 2049 1140 41 33 53.340767 of3 1 6 9 0 0 920 1171 1169 71 -1 4 1 6 9 1 0 920 1171 1169 71 -1 5 1 6 9 1 1 920 1181 86 43 60.480900 the’5 1 6 9 1 2 1015 1171 176 63 96.431007 customer,5 1 6 9 1 3 1205 1187 56 55 95.999245 to5 1 6 9 1 4 1268 1181 149 53 95.713837 provides 1 6 9 1 5 1438 1186 87 40 96.161446 each5 1 6 9 1 6 1543 1183 168 53 96.928978 customers 1 6 9 1 7 1732 1188 85 45 96.715775 with5 1 6 9 1 8 1839 1189 113 41 96.756355 notices 1 6 9 1 9 1969 1190 47 41 96.756355 of5 1 6 9 1 10 2029 1183 60 47 96.983154 the2 1 7 0 0 0 877 1224 1208 60 -1 3 1 7 1 0 0 845 1224 1240 60 -1 4 1 7 1 1 0 877 1224 1208 60 -1 5 1 7 1 1 1 845 1225 76 47 0.000000 ——5 1 7 1 1 2 935 1233 96 45 96.332069 rights 1 7 1 1 3 1044 1234 38 43 96.565392 to5 1 7 1 1 4 1091 1224 147 56 96.080688 rescind,5 1 7 1 1 5 1252 1235 37 32 96.837021 in5 1 7 1 1 6 1303 1231 66 37 96.837021 thes 1 7 1 1 7 1369 1236 99 42 96.424789 forms 1 7 1 1 8 1481 1231 78 44 96.915092 ands 1 7 1 1 9 1563 1234 143 48 96.632294 manners 1 7 1 1 10 1718 1230 158 50 96.482742 specified5 1 7 1 1 11 1890 1240 49 41 96.714462 by5 1 7 1 1 12 1951 1229 134 55 96.804123 Section2 1 8 0 0 0 870 1260 1257 338 -1 3 1 8 1 0 0 870 1260 1217 116 -1 4 1 8 1 1 0 919 1260 1168 104 -1 5 1 8 1 1 1 919 1275 171 51 0.000000 -296.9(b)5 1 8 1 1 2 1123 1285 39 32 96.228584 of5 1 8 1 1 3 1181 1260 228 68 80.913322 Regulation.5 1 8 1 1 4 1423 1288 35 41 65.544144 Z,5 1 8 1 1 5 1485 1284 98 80 94.071480 prior5 1 8 1 1 6 1601 1285 44 35 96.649284 to5 1 8 1 1 7 1654 1290 283 72 55.218426 “consummation5 1 8 1 1 8 1955 1291 48 32 84.403465 ‘of5 1 8 1 1 9 2027 1292 60 39 96.877747 thea 1 8 1 2 0 870 1335 1145 65 -1 5 1 8 1 2 1 870 1355 39 19 31.607300 a5 1 8 1 2 2 934 1335 220 65 94.907967 transaction.5 1 8 1 2 3 2012 1364 3 1 75.138824 :3 1 8 2 0 0 871 1357 1256 180 -1 4 1 8 2 1 0 956 1357 1171 89 -1 5 1 8 2 1 1 956 1380 48 38 33.797081 8.5 1 8 2 1 2 1027 1380 145 63 96.894135 Making5 1 8 2 1 3 1190 1374 74 62 96.631241 any5 1 8 2 1 4 1269 1362 169 75 90.589798 physical5 1 8 2 1 5 1451 1357 142 80 95.609764 changes5 1 8 2 1 6 1608 1389 17 57 72.346542 i5 1 8 2 1 7 1618 1385 42 54 85.169197 in:5 1 8 2 1 8 1672 1401 20 21 94.832497 a5 1 8 2 1 9 1704 1359 182 78 83.674614 customer’5 1 8 2 1 10 1888 1403 16 21 57.397045 85 1 8 2 1 11 1921 1359 164 81 95.019135 property5 1 8 2 1 12 2103 1386 24 20 0.000000 -4 1 8 2 2 0 920 1425 1167 64 -1 5 1 8 2 2 1 873 1446 115 36 40.324787 Or,5 1 8 2 2 2 998 1425 192 60 85.339867 performing5 1 8 2 2 3 1215 1449 15 30 73.093323 .5 1 8 2 2 4 1237 1449 69 34 95.845070 any5 1 8 2 2 5 1333 1432 95 50 95.845070 works 1 8 2 2 6 1443 1450 47 34 71.666351 or5 1 8 2 2 7 1505 1435 154 50 64.746712 services5 1 8 2 2 8 1684 1432 70 57 71.055054 for.5 1 8 2 2 9 1766 1442 58 31 95.821297 thes 1 8 2 2 10 1849 1446 168 42 93.096886 customers 1 8 2 2 11 2032 1455 55 36 90.268929 .on4 1 8 2 3 0 871 1478 1215 70 -1 5 1 8 2 3 1 871 1480 41 53 34.490196 45 1 8 2 3 2 934 1479 83 48 96.714714 such5 1 8 2 3 3 1023 1478 180 70 0.000000 Property:5 1 8 2 3 4 1210 1480 127 51 89.641586 before.5 1 8 2 3 5 1343 1478 200 65 94.869087 expiration,5 1 8 2 3 6 1553 1486 50 54 81.225647 of,5 1 8 2 3 7 1605 1482 60 50 97.005455 thes 1 8 2 3 8 1682 1487 176 52 96.188255 rescission5 1 8 2 3 9 1864 1485 136 57 66.751266 period,5 1 8 2 3 10 2006 1488 80 54 85.268417 pro-3 1 8 3 0 0 918 1528 1166 70 -1 4 1 8 3 1 0 918 1528 1166 70 -1 5 1 8 3 1 1 918 1531 126 49 68.411247 vided.5 1 8 3 1 2 1053 1533 82 50 80.677132 for5 1 8 3 1 3 1126 1549 42 31 64.309532 in:5 1 8 3 1 4 1180 1528 141 59 91.509911 Sections 1 8 3 1 5 1332 1542 72 38 90.296051 226.5 1 8 3 1 6 1408 1537 38 53 72.022186 9¢5 1 8 3 1 7 1452 1541 50 46 55.576283 a)5 1 8 3 1 8 1510 1537 40 44 55.576283 of5 1 8 3 1 9 1559 1533 194 65 96.854202 Regulations 1 8 3 1 10 1774 1554 15 27 55.158672 |5 1 8 3 1 11 1786 1543 37 40 90.822723 Z,5 1 8 3 1 12 1833 1539 50 36 0.000000 in.5 1 8 3 1 13 1890 1554 69 33 0.000000 any.5 1 8 3 1 14 1975 1547 109 29 92.929878 trans-2 1 9 0 0 0 820 1568 1267 65 -1 3 1 9 1 0 0 820 1568 1267 65 -1 4 1 9 1 1 0 820 1568 1267 65 -1 5 1 9 1 1 1 820 1579 29 10 0.000000 .5 1 9 1 1 2 869 1581 233 53 30.678093 ..action.in5 1 9 1 1 3 1123 1581 111 53 59.918461 which5 1 9 1 1 4 1248 1601 26 31 59.918461 a5 1 9 1 1 5 1285 1584 162 49 96.272308 security5 1 9 1 1 6 1460 1591 151 41 45.943108 interest,5 1 9 1 1 7 1618 1592 31 38 45.943108 is5 1 9 1 1 8 1666 1604 44 22 77.973961 or5 1 9 1 1 9 1724 1590 71 36 77.973961 will5 1 9 1 1 10 1814 1568 45 58 89.538170 be5 1 9 1 1 11 1874 1590 152 42 96.539177 retained5 1 9 1 1 12 2044 1605 43 23 96.993156 or2 1 10 0 0 0 838 1632 1247 948 -1 3 1 10 1 0 0 898 1632 1187 53 -1 4 1 10 1 1 0 898 1632 1187 53 -1 5 1 10 1 1 1 898 1629 220 51 46.256428 acquired5 1 10 1 1 2 1111 1651 35 20 96.760941 in5 1 10 1 1 3 1165 1631 70 41 96.437576 real5 1 10 1 1 4 1254 1635 165 52 96.887703 property5 1 10 1 1 5 1438 1642 137 32 96.763115 which5 1 10 1 1 6 1567 1653 28 30 96.565880 is5 1 10 1 1 7 1612 1644 87 33 91.751106 used5 1 10 1 1 8 1712 1655 39 20 91.751106 or5 1 10 1 1 9 1769 1643 28 32 96.848724 is5 1 10 1 1 10 1814 1644 161 41 96.396255 expected5 1 10 1 1 11 1991 1649 36 28 96.861397 to5 1 10 1 1 12 2044 1645 41 32 96.861397 be3 1 10 2 0 0 931 1689 1152 48 -1 4 1 10 2 1 0 931 1689 1152 48 -1 5 1 10 2 1 1 931 1689 82 39 86.918701 used5 1 10 2 1 2 1031 1701 37 21 86.918701 as5 1 10 2 1 3 1085 1690 58 32 96.782204 thes 1 10 2 1 4 1160 1683 171 50 96.576393 principals 1 10 2 1 5 1351 1692 170 33 96.499565 residences 1 10 2 1 6 1538 1693 39 32 96.538651 of5 1 10 2 1 7 1594 1693 58 32 96.520149 thes 1 10 2 1 8 1668 1698 177 36 96.922379 customer,5 1 10 2 1 9 1863 1705 35 21 96.967018 as5 1 10 2 1 10 1916 1695 167 42 96.751968 provided3 1 10 3 0 0 901 1740 695 45 -1 4 1 10 3 1 0 901 1740 695 45 -1 5 1 10 3 1 1 901 1740 66 38 59.279800 In5 1 10 3 1 2 978 1740 138 38 93.194450 Sections 1 10 3 1 3 1126 1742 151 41 92.158394 226.9(c)5 1 10 3 1 4 1294 1742 39 32 96.619186 of5 1 10 3 1 5 1343 1743 209 42 93.177704 Regulations 1 10 3 1 6 1561 1744 35 32 91.838547 Z.3 1 10 4 0 0 929 1767 1153 120 -1 4 1 10 4 1 0 971 1767 1111 67 -1 5 1 10 4 1 1 971 1793 29 30 87.569572 4,5 1 10 4 1 2 1024 1791 149 42 94.764481 Failing,5 1 10 4 1 3 1197 1791 36 39 94.764481 in5 1 10 4 1 4 1255 1803 67 31 96.200813 any5 1 10 4 1 5 1344 1791 177 35 96.388382 consumers 1 10 4 1 6 1542 1794 121 33 82.885147 credits 1 10 4 1 7 1672 1785 210 50 87.650314 transactions 1 10 4 1 8 1903 1807 39 20 88.036880 or5 1 10 4 1 9 1931 1781 3 1 5.793831 »5 1 10 4 1 10 1966 1767 116 60 85.033363 adver-4 1 10 4 2 0 929 1841 1154 46 -1 5 1 10 4 2 1 929 1841 168 41 91.698921 tisement,5 1 10 4 2 2 1115 1845 45 29 0.000000 to.5 1 10 4 2 3 1168 1844 99 31 0.000000 makes 1 10 4 2 4 1285 1844 47 31 95.978371 all5 1 10 4 2 5 1351 1844 202 33 95.978371 disclosures5 1 10 4 2 6 1571 1845 156 42 96.895981 required5 1 10 4 2 7 1745 1845 44 42 96.708031 by5 1 10 4 2 8 1808 1845 154 34 96.517776 Sections5 1 10 4 2 9 1979 1848 104 39 96.671516 226.6,3 1 10 5 0 0 895 1892 1188 63 -1 4 1 10 5 1 0 895 1892 1188 63 -1 5 1 10 5 1 1 895 1906 3 6 0.000000 \5 1 10 5 1 2 929 1884 102 48 95.829842 226.8,5 1 10 5 1 3 1047 1895 93 30 95.999168 226.95 1 10 5 1 4 1156 1893 69 32 96.309326 ands 1 10 5 1 5 1241 1896 114 31 96.769348 226.105 1 10 5 1 6 1370 1895 39 35 96.936043 of5 1 10 5 1 7 1425 1892 206 63 96.891754 Regulations 1 10 5 1 8 1644 1896 62 40 91.132744 Z,5 1 10 5 1 9 1699 1908 35 19 96.605492 in5 1 10 5 1 10 1747 1896 60 35 96.501564 thes 1 10 5 1 11 1822 1908 152 42 96.579170 manner,5 1 10 5 1 12 1988 1897 95 32 96.020187 form3 1 10 6 0 0 929 1943 621 43 -1 4 1 10 6 1 0 929 1943 621 43 -1 5 1 10 6 1 1 929 1943 68 34 96.596352 ands 1 10 6 1 2 1009 1948 139 28 96.665550 amounts 1 10 6 1 3 1159 1945 195 41 96.291718 prescribed5 1 10 6 1 4 1365 1946 152 32 42.106785 therein.5 1 10 6 1 5 1549 1944 1 3 46.334015 -3 1 10 7 0 0 842 1977 1239 263 -1 4 1 10 7 1 0 853 1977 1228 61 -1 5 1 10 7 1 1 853 1977 69 47 70.055222 It5 1 10 7 1 2 937 1993 32 42 77.640717 as5 1 10 7 1 3 988 1993 139 41 96.500641 furthers 1 10 7 1 4 1146 1993 152 43 96.062309 ordered,5 1 10 7 1 5 1318 1996 92 32 75.365601 That5 1 10 7 1 6 1430 2007 20 21 75.365601 a5 1 10 7 1 7 1468 2007 87 31 94.397942 copy5 1 10 7 1 8 1575 1997 38 32 96.264488 of5 1 10 7 1 9 1633 1978 70 51 96.609268 this5 1 10 7 1 10 1722 1998 101 31 96.862770 orders 1 10 7 1 11 1843 2001 36 29 96.948830 to5 1 10 7 1 12 1893 2009 98 23 95.464523 ceases 1 10 7 1 13 2011 1999 70 32 96.257324 anda 1 10 7 2 0 842 2017 1237 74 -1 5 1 10 7 2 1 842 2032 105 43 73.940315 desist,5 1 10 7 2 2 960 2043 41 35 96.608955 be5 1 10 7 2 3 1015 2036 170 48 96.608955 delivered5 1 10 7 2 4 1199 2049 35 28 96.965614 to5 1 10 7 2 5 1249 2017 49 74 92.273415 all5 1 10 7 2 6 1310 2051 165 36 96.524162 presents 1 10 7 2 7 1471 2048 57 32 95.394791 ands 1 10 7 2 8 1543 2047 117 33 95.394791 futures 1 10 7 2 9 1675 2049 177 40 96.348305 personnel5 1 10 7 2 10 1866 2049 38 32 93.065704 of5 1 10 7 2 11 1918 2050 161 40 91.007248 respond-4 1 10 7 3 0 842 2096 1239 44 -1 5 1 10 7 3 1 842 2097 74 39 96.093163 ents5 1 10 7 3 2 938 2096 153 43 96.093163 engaged5 1 10 7 3 3 1113 2096 34 32 96.429443 in5 1 10 7 3 4 1168 2097 58 46 96.568245 thes 1 10 7 3 5 1248 2097 270 37 96.769653 consummation5 1 10 7 3 6 1539 2099 40 32 96.801758 of5 1 10 7 3 7 1600 2110 66 30 96.447311 any5 1 10 7 3 8 1687 2100 108 31 96.832466 credits 1 10 7 3 9 1815 2100 80 40 95.925552 sale,5 1 10 7 3 10 1915 2100 69 32 96.301285 ands 1 10 7 3 11 1994 2100 87 36 96.468506 that4 1 10 7 4 0 843 2134 1238 67 -1 5 1 10 7 4 1 843 2134 222 52 84.439438 respondents5 1 10 7 4 2 1090 2141 115 39 96.829903 secures 1 10 7 4 3 1229 2148 93 32 96.014870 from5 1 10 7 4 4 1346 2140 82 41 96.014870 each5 1 10 7 4 5 1453 2150 81 31 96.339020 such5 1 10 7 4 6 1561 2160 122 31 96.339020 persons 1 10 7 4 7 1708 2161 21 21 95.714386 a5 1 10 7 4 8 1753 2141 122 50 95.543236 signed.5 1 10 7 4 9 1897 2141 184 60 96.038284 statement4 1 10 7 5 0 842 2196 717 44 -1 5 1 10 7 5 1 842 2196 282 48 96.678757 acknowledging5 1 10 7 5 2 1146 2199 127 48 91.327377 receipts 1 10 7 5 3 1294 2199 41 41 96.717125 of5 1 10 7 5 4 1351 2199 76 40 75.343849 said5 1 10 7 5 5 1439 2200 120 34 75.343849 order.3 1 10 8 0 0 838 2223 1245 325 -1 4 1 10 8 1 0 882 2223 1199 79 -1 5 1 10 8 1 1 882 2241 36 37 79.942245 Tt5 1 10 8 1 2 934 2248 28 32 85.583107 és5 1 10 8 1 3 977 2224 144 65 96.714668 furthers 1 10 8 1 4 1132 2244 153 47 96.587837 ordered,5 1 10 8 1 5 1302 2250 91 33 95.652573 That5 1 10 8 1 6 1410 2249 221 53 96.484627 respondents5 1 10 8 1 7 1648 2252 115 42 96.736488 notify5 1 10 8 1 8 1778 2252 58 32 96.956863 thes 1 10 8 1 9 1853 2223 228 71 90.713562 Commission4 1 10 8 2 0 841 2287 1242 57 -1 5 1 10 8 2 1 841 2303 36 28 95.056770 at5 1 10 8 2 2 899 2298 84 33 95.056770 least5 1 10 8 2 3 1006 2299 110 42 95.801720 thirty5 1 10 8 2 4 1144 2301 73 41 85.544380 (30)5 1 10 8 2 5 1247 2287 84 56 96.998329 days5 1 10 8 2 6 1355 2302 96 42 95.752434 prior5 1 10 8 2 7 1472 2306 35 28 96.654106 to5 1 10 8 2 8 1530 2313 67 31 96.260712 any5 1 10 8 2 9 1620 2297 169 50 96.068077 proposed5 1 10 8 2 10 1811 2303 129 42 96.068077 changes 1 10 8 2 11 1964 2304 35 31 96.898232 in5 1 10 8 2 12 2020 2292 63 44 96.980362 thea 1 10 8 3 0 841 2352 1237 43 -1 5 1 10 8 3 1 841 2354 178 37 96.774818 corporate5 1 10 8 3 2 1044 2352 216 41 96.431992 respondent,5 1 10 8 3 3 1284 2352 92 43 7.403488 such.5 1 10 8 3 4 1391 2364 36 21 7.403488 as5 1 10 8 3 5 1453 2353 212 41 95.681786 dissolution,5 1 10 8 3 6 1691 2354 218 41 96.490997 assignment,5 1 10 8 3 7 1934 2366 40 20 96.490997 or5 1 10 8 3 8 1997 2355 81 39 96.850929 sale,4 1 10 8 4 0 840 2401 1238 45 -1 5 1 10 8 4 1 840 2401 167 33 96.430489 resultant5 1 10 8 4 2 1025 2401 35 32 96.149368 in5 1 10 8 4 3 1080 2402 57 32 96.640594 thes 1 10 8 4 4 1155 2413 194 31 95.886971 emergence5 1 10 8 4 5 1384 2403 39 33 96.751823 of5 1 10 8 4 6 1442 2415 19 21 95.923225 a5 1 10 8 4 7 1479 2415 168 22 95.923225 successors 1 10 8 4 8 1665 2405 228 41 96.790565 corporation,5 1 10 8 4 9 1912 2406 57 31 93.273834 thes 1 10 8 4 10 1987 2417 91 21 92.942390 crea-4 1 10 8 5 0 839 2447 1239 56 -1 5 1 10 8 5 1 839 2451 86 40 90.647430 tion,5 1 10 8 5 2 946 2463 38 20 96.175735 or5 1 10 8 5 3 1006 2447 264 39 96.175735 dissolution5 1 10 8 5 4 1229 2443 44 52 96.809647 of5 1 10 8 5 5 1291 2454 230 48 96.857292 subsidiaries,5 1 10 8 5 6 1542 2465 44 23 96.549713 or5 1 10 8 5 7 1603 2452 67 45 96.653008 any5 1 10 8 5 8 1692 2456 97 32 96.475319 others 1 10 8 5 9 1811 2450 130 53 96.774261 changes 1 10 8 5 10 1963 2457 35 47 96.381317 in5 1 10 8 5 11 2020 2457 58 32 96.454605 thea 1 10 8 6 0 838 2495 1238 85 -1 5 1 10 8 6 1 838 2502 217 48 96.307541 corporations 1 10 8 6 2 1074 2504 112 47 96.499908 which5 1 10 8 6 3 1204 2511 79 36 96.367996 may5 1 10 8 6 4 1301 2495 101 56 92.786308 affects 1 10 8 6 5 1408 2500 219 78 76.163673 compliance5 1 10 8 6 6 1639 2500 214 80 96.252670 obligations5 1 10 8 6 7 1871 2502 131 47 95.241730 arising5 1 10 8 6 8 1993 2566 3 3 57.880268 55 1 10 8 6 9 2023 2512 53 28 85.789017 out2 1 11 0 0 0 751 2553 1325 187 -1 3 1 11 1 0 0 751 2553 1325 187 -1 4 1 11 1 1 0 818 2553 269 34 -1 5 1 11 1 1 1 818 2547 58 37 46.413708 of5 1 11 1 1 2 891 2548 64 37 93.985580 thes 1 11 1 1 3 977 2554 110 33 96.925545 order.4 1 11 1 2 0 795 2578 1281 69 -1 5 1 11 1 2 1 795 2604 81 32 23.629715 Itis5 1 11 1 2 2 889 2605 139 40 96.678429 furthers 1 11 1 2 3 1041 2606 153 41 93.909004 ordered,5 1 11 1 2 4 1208 2602 93 36 94.391754 That5 1 11 1 2 5 1314 2608 59 32 96.596039 thes 1 11 1 2 6 1387 2578 113 62 96.546272 initials 1 11 1 2 7 1514 2602 150 39 96.726089 decisions 1 11 1 2 8 1675 2603 42 37 96.381195 of5 1 11 1 2 9 1730 2608 58 32 96.050079 thes 1 11 1 2 10 1801 2602 275 39 96.645767 administrative4 1 11 1 3 0 751 2647 1321 84 -1 5 1 11 1 3 1 751 2648 65 38 96.838516 laws 1 11 1 3 2 830 2654 117 42 96.188919 judge,5 1 11 1 3 3 963 2666 36 21 96.931870 as5 1 11 1 3 4 1015 2656 159 33 96.861763 modified5 1 11 1 3 5 1189 2647 129 67 96.887962 herein,5 1 11 1 3 6 1333 2658 62 54 96.160721 be,5 1 11 1 3 7 1400 2659 68 32 96.371521 ands 1 11 1 3 8 1480 2659 43 32 60.017544 it5 1 11 1 3 9 1527 2653 118 78 88.267487 hereby5 1 11 1 3 10 1671 2659 5 6 68.954124 15 1 11 1 3 11 1668 2653 40 63 96.824211 is,5 1 11 1 3 12 1724 2653 143 72 92.104263 adopted5 1 11 1 3 13 1886 2667 21 54 92.104263 a5 1 11 1 3 14 1890 2669 42 45 95.543762 as5 1 11 1 3 15 1919 2717 3 6 13.108231 35 1 11 1 3 16 1948 2654 52 72 88.307587 thes 1 11 1 3 17 2017 2660 55 32 92.161697 de-4 1 11 1 4 0 753 2706 1244 34 -1 5 1 11 1 4 1 753 2704 106 33 96.509102 cisions 1 11 1 4 2 871 2706 38 31 96.509102 of5 1 11 1 4 3 921 2706 58 31 96.452232 thes 1 11 1 4 4 991 2701 250 39 79.691956 Commission.5 1 11 1 4 5 1995 2731 2 3 41.336727 : - CAL-ROOF.- WHOLESALE, INC., ET AL. 703 678 - Complaint It is further ordered, That respondents herein shall, within sixty (60): days after service upon them of this order, file with the Commission a report, in writing, signed by such respondents, setting forth in detail the manner and form of their ir compliance with. the order to cease and desist.

Chairman Kirkpatrick concurring in the disposition ‘of this proceeding. .

Iw: THE Marrer OF.

CAL- ROOF WHOLESALE, INC, ET AL.

CONSENT ORDER, ETC,, IN REGARD TO THE ALLEGED VIOLATION OF THE a _ FEDERAL TRADB.COMMISSION ACT Docket 0-280, Comblaint Oct. 30, 1972—Decision, Oct. 380, 1972: Consent order, requiring: a ‘Portland, “Oregon, “wholesaler. and ‘distributor, of building ‘materials, ‘including residential siding products, among other things ito cease ‘misrepresenting any ‘aspect ‘of contests or other promotional schétimes ‘or ‘dévices + ‘misrepresenting’ the quality or: properties ' ofits ‘siding: or ‘other “building products; :and. representing: .that _its. products .aré guaranteed . unless. pertinent., information: -with, respect.‘ thereto. is. clearly and conspicuously disclosed.

Complaint Pursuant to the: provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Cal-Roof Wholesale, Inc., a corporation, and Morris Greenstein, individually and as an officer of said corporation, hereinafter referred to'as respondents, have violated the provisions of said Act, 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 1 in that respect as follows: :

Paracrapy 1. Respondent Cal- Roof. Wholesale, Inc., is a corporation. organized, existing and doing business under and by virtue of the laws of the State of Oregon, with its principal office and place of business located at 110 S.E. Taylor, Portland, Oregon. . Respondent Morris Greenstein is an officer of the corporate respondent. He formulates, directs and controls the acts and practices herein described. His business address is the same as that of the corporate respondent.

Complaint 81 FTC.

. Par. 2. Respondents are now and: for some time:‘last past have been, engaged in the wholesale sale, offering for sale, and distribution of pbuilding materials, including residential siding products.) . \ © -Par:'3. In the course and conduct of their business. as aforesaid, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their ‘place of business in the State of Oregon to purchasers thereof located in various other States of the United States, and have operated branches outside of the State of Oregon, and maintain;.and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, as “commerce” is defined inthe Federal Trade Commission Act.

Pak. 4. To promote the sale of their building materials, respondents have distributed and have caused to be ‘distributed in commerce to potential home siding purchasers, a substantial. number of mailers announcing a “17 Second Contest.” Two such mailers were so distributed. One advertised aluminum siding and the other advertised vinyl siding..Each had a number printed on it and solicited the entry of the recipient in a “contest.” The offered grand prize was.a ~ free siding job, second prize was a color television set, and the third prize was a clock or a mystery gift. The foregoing is hereinafter referred to as the “promotion.” Respondents have sent out or have caused to have sent out 137,200 of the aluminum siding mailer and approximately 135,000 of the vinyl siding mailer. After the mailers are received, the recipients may, and many do, return the attached cards to the respondents, or their agents. The | returned cards are then sent to siding contractors which have purchased the promotion service from respondents and contractor salesmen are sent to call on prospects who have returned the card to attempt to sell them siding installation jobs and to deliver the appropriate prizes. © :

In the said. promotion mailers the following statements appear in connection with the advertised siding :

; So new and different, it makes all other sidings obsolete 7 * * ‘* : * * * - Imagine, you never have to paint your house again * * * * * * * .: «wv, Save by. eliminating house-painting and repairs over the next. ten, twenty, or thirty years. Loe: ;

i # * # * (LR , Mail this card within 5 days .

* * * * * * : * ~CAL-ROOF -WHOLESALE, “INC.;° ET AL. 705;

(03 vs Complaint.

Par. 5, By and through use of the said promotion, and through the use of the aforementioned. statements-and assertions, respondents, have represented directly or by implication that: 20 _ 1. A true contest was being conducted in which the determination: of whether each recipient of a. promotion mailer was entitled ‘to re-. ceive the third prize was based upon chance. _ 2, Promotion entrants could: not. quality. to participate. unless the, entry, was.mailed. within five days of receipt. _ - 3. The promotion would be limited to a relatively short period. of, time.

AA grand prize of a regidential siding installation job: and three. second prizes of new color television. sets would be awarded in each. of the two promotions, oo 5. Individuals entered. or participating in the promotions 1 were afforded a reasonable. opportunity to ‘win the represented first and second prizes.

6. ‘The advertised siding makes all other sidings obsolete. 7. The advertised sidingis “new” and “different.” 8. The advertised siding will eliminate the need for house painting _ and siding repairs for as lonig-as 30 years. Par. 6. In truth and in fact: mo, 1. The determination of whether mailer recipients would receive the third prize was not based on chance. Each and every promotion mailer entitled the recipient to receive the third prize under the criteria established in the mailer.

2. The mailing of promotion entry cards more than five days after receipt of the mailer would not disqualify the entrant. 3. The promotion has not been limited to a relatively short period of time, mailers having been sent into various areas intermittently from June 1970 through July 1971, in the case of the aluminum siding mailer, and since August 1970 in the case of the vinyl siding mailer. 4. No residential siding installation jobs or color television sets were won or awarded in either of the two promotions. 5. Individuals entered or participating i in the promotions were not afforded a reasonable opportunity to win the represented first and second prizes. In the aluminum siding promotion, 137,200 mailers were sent, out of which one was a first prize winner and three were second prize winners. In the vinyl siding promotion, approximately 135,000 © mailers were sent out, of which one was a first prize winner and three were second prize winners.

6. The advertised siding did not obsolete all other sidings. 7. The advertised siding was not “new” and “different.” e 706 FEDERAL’ TRADE | COMMISSION “DECISIONS Complaint’ . . SL RTC.

8. “The advertised: siding’ will not’ eliminate: the néed for house painting and siding repairs for as long as 30 years. * Par. 7. To promote the sale of their building materials, réspbadente have distributed and have caused ‘to be distributed in commerce to poteritial home siding purchasers, a substantial number of: mailers advertising steel house siding. The mailer invited the recipient to return’ a postage-paid card in. order to obtain the free gift of a junior: ‘grandfather clock at the time of a sales presentation. The returned coupons’ were ‘forwarded to’siding coritractors who had’ purchased ‘the’ mailer service. The coupons were utilized by the siding contractors for obtaining leads for siding installation work. In the mailer, the: following _ statements and representations, among others, were made: ” This offer is limited to ten days only: - -. For your ‘security, vinylized ‘siding comes witha: transferable guarantee that you can depend on: Wow say good-bye to house painting. ;

Immediate financing available.

* e * * ee ee * Easy terms to fit your budget * * * * * . * * Act now, absolutely free * * * no obligation, nothing to buy * * * * * % * This offer is limited to ten days only * * * * * * * Par. 8. By and through use of the aforementioned statements and , representations, respondents have represented directly or by implication:

1. That the offer to receive a junior grandfather clock by returning the coupon is only available for 10 days from the date of receipt of the mailer.

2. That the advertised steel house siding is guaranteed i in all respects without conditions or limitations.

3. That houses to which the advertised steel house siding has been applied will never need painting.

4. That immediate financing would be provided to all recipients of. CAL-ROOF > WHOLESALE, “INC. ET AL. 707 703. Complaint the mailer by the respondents or by some person or firm connected with respondents.

5. That lower downpayments, longer periods of repayment, lower interest charges, or lower monthly payments than those regularly offered would be available to each mailer recipient. 6. That recipients of the mailer which returned the card would be under no obligations with respect thereto.

- Par. 9. In truth and in fact: | 1. The offer in the mailer was not limited toten days. ~ 2. The. siding guarantee is not unconditional, but is pro-rated and contains other conditions to the obligations of the guarantor, ~— 38. ‘Application of the advertised steel house siding will not eliminate the need for house painting forever.

' 4, Financing of the house siding installation work is only available tothose who can qualify for credit extensions. 5. The downpayments are not lower, the interest charges are not less, the periods of repayment are not longer, and the monthly payments are not less than those that would be regularly and ordinarily available to individuals obtaining financing for siding installation work. . 6. The mailer recipient who returns the coupon obligates himself to listen to a siding sales presentation.

Par. 10. In the course and conduct of their aforesaid business, and at all times mentioned herein, respondents have been, and now are, in substantial competition, in commerce, with corporations, firms and individuals in the sale of siding materials and other products of the same general kind and nature as that sold by respondents. Par. 11. The use by the respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents’ products by reason of said erroneous and mistaken belief.

Par. 12. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public and of respondents’ competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

708 . FEDERAL TRADE. COMMISSION DECISIONS . t Decision, and. Order 81 F.T.C;

Decision AND ORDER... bap ieieps _ 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 Seattle Regional Office..pro- _posed to present to the Commission for its consideration, and which, if: issued by the Commission, would charge respondents with violations of Section 5 of the Federal Trade Commission Act;and The respondents and counsel for the Commission having thereafter exectitédan agreément 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 i 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 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 Cal-Roof Wholesale, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Oregon, with its office and principal place of business located at 110 S.E. Taylor, Portland, Oregon.

Respondent Morris Greenstein j is an officer of said corporation. He formulates, directs and controls the policies, acts and practices of ' said corporation, and his principal office and place of business is located at the above stated address.

2. The Federal Trade Commission has jurisdiction of the subject _Inatter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It ts ordered, That respondents Cal-Roof Wholesale, Inc., a corporation, and its officers, and Morris Greenstein, individually and as an GAL“ROOF WHOLESALE, ING., ET AL. 709 {sa Decisions 1 1 1 2 3 1329 528 63 35 73.990067 aiid5 1 1 1 2 4 1408 527 92 35 11.493263 Order2 1 2 0 0 0 663 588 1353 1987 -1 3 1 2 1 0 0 663 588 1338 421 -1 4 1 2 1 1 0 665 588 1329 70 -1 5 1 2 1 1 1 665 605 122 43 28.655540 ‘officers 1 2 1 1 2 797 614 47 33 88.176933 of5 1 2 1 1 3 856 610 87 42 85.861946 said5 1 2 1 1 4 952 603 229 55 96.770638 corporation,5 1 2 1 1 5 1201 610 83 34 87.601700 and:5 1 2 1 1 6 1283 588 98 66 96.663918 theirs 1 2 1 1 7 1399 599 185 42 68.833694 successors5 1 2 1 1 8 1604 607 72 32 96.667435 ands 1 2 1 1 9 1693 602 143 48 96.181152 assigns,5 1 2 1 1 10 1856 605 88 39 91.860298 ands 1 2 1 1 11 1946 606 48 30 48.413376 re-4 1 2 1 2 0 663 647 1334 65 -1 5 1 2 1 2 1 663 666 209 42 72.157761 -spondents’5 1 2 1 2 2 875 665 147 40 82.297577 officers,5 1 2 1 2 3 1037 665 136 41 96.739799 agents,5 1 2 1 2 4 1183 648 293 60 96.330292 representatives,5 1 2 1 2 5 1493 659 69 32 92.985107 ands 1 2 1 2 6 1577 657 205 46 96.487915 employees,5 1 2 1 2 7 1795 647 166 65 62.369057 directly’5 1 2 1 2 8 1958 651 39 36 96.624176 or4 1 2 1 3 0 672 707 1322 51 -1 5 1 2 1 3 1 672 716 152 42 96.753395 through5 1 2 1 3 2 838 727 69 30 96.671684 any5 1 2 1 3 3 921 714 230 42 96.671684 corporation,5 1 2 1 3 4 1165 712 206 44 96.946899 subsidiary,5 1 2 1 3 5 1386 710 160 39 96.986465 division,5 1 2 1 3 6 1556 720 42 21 96.986465 or5 1 2 1 3 7 1611 710 98 30 96.916962 others 1 2 1 3 8 1725 707 150 45 96.477837 device,5 1 2 1 3 9 1867 717 46 22 82.529022 in5 1 2 1 3 10 1919 707 75 31 82.529022 con-4 1 2 1 4 0 673 752 1326 61 -1 5 1 2 1 4 1 671 765 139 45 89.532936 nection5 1 2 1 4 2 820 767 86 31 97.016769 with5 1 2 1 4 3 916 766 60 31 96.953590 thes 1 2 1 4 4 985 764 234 43 96.637383 preparation,5 1 2 1 4 5 1231 761 231 42 96.790443 advertising,5 1 2 1 4 6 1466 758 205 44 96.859261 promotion,5 1 2 1 4 7 1682 758 81 55 96.982933 sale,5 1 2 1 4 8 1776 752 223 48 96.253082 distribution4 1 2 1 5 0 666 807 1334 51 -1 5 1 2 1 5 1 666 828 51 21 82.029823 ‘or5 1 2 1 5 2 728 827 59 22 93.065956 uses 1 2 1 5 3 800 818 39 31 95.972466 of5 1 2 1 5 4 853 823 67 35 95.972466 any5 1 2 1 5 5 936 817 140 39 80.707275 contest,5 1 2 1 5 6 1082 820 110 50 96.855293 games 1 2 1 5 7 1203 824 38 22 96.983612 or5 1 2 1 5 8 1257 813 97 32 96.391716 others 1 2 1 5 9 1369 810 229 45 96.464653 promotional5 1 2 1 5 10 1613 807 126 45 54.775730 device,5 1 2 1 5 11 1746 808 45 32 54.775730 in5 1 2 1 5 12 1806 812 194 36 90.862434 commerce,4 1 2 1 6 0 676 834 1324 69 -1 5 1 2 1 6 1 676 878 38 22 96.848190 as5 1 2 1 6 2 732 864 223 48 96.243820 “commerce”5 1 2 1 6 3 975 866 29 46 96.142509 is5 1 2 1 6 4 1024 864 142 33 66.929245 defined5 1 2 1 6 5 1178 865 36 31 84.076607 in5 1 2 1 6 6 1234 864 67 31 96.313545 thes 1 2 1 6 7 1311 854 156 41 65.993408 Federal:5 1 2 1 6 8 1476 858 114 36 74.226257 Trades 1 2 1 6 9 1607 834 230 69 91.719322 Commissions 1 2 1 6 10 1857 859 80 41 96.540977 Act,5 1 2 1 6 11 1957 858 43 32 96.742638 do4 1 2 1 7 0 665 901 1336 82 -1 5 1 2 1 7 1 665 909 197 41 82.033989 ‘forthwith5 1 2 1 7 2 876 920 94 29 29.214294 ceases 1 2 1 7 3 986 906 69 42 96.724792 ands 1 2 1 7 4 1065 907 121 50 86.936081 desist,5 1 2 1 7 5 1202 905 165 52 90.939041 orally-or5 1 2 1 7 6 1383 913 37 32 96.968246 in5 1 2 1 7 7 1430 912 73 71 96.933777 any5 1 2 1 7 8 1519 901 100 70 96.905983 others 1 2 1 7 9 1632 907 152 62 95.668724 manner,5 1 2 1 7 10 1801 910 145 70 96.257385 directly5 1 2 1 7 11 1963 920 38 20 96.689880 or4 1 2 1 8 0 677 957 315 60 -1 5 1 2 1 8 1 677 957 193 60 92.816658 indirectly,5 1 2 1 8 2 883 968 109 31 94.845551 from:3 1 2 2 0 0 801 980 1202 94 -1 4 1 2 2 1 0 801 980 1202 94 -1 5 1 2 2 1 1 801 1021 32 42 63.691803 1.5 1 2 2 1 2 850 1010 250 64 96.683647 Representing5 1 2 2 1 3 1110 1017 81 31 96.089096 that5 1 2 2 1 4 1207 1027 20 20 96.089096 a5 1 2 2 1 5 1243 1017 130 30 96.305717 contests 1 2 2 1 6 1387 1025 40 21 96.305717 or5 1 2 2 1 7 1441 1014 100 31 96.674416 others 1 2 2 1 8 1554 980 132 64 92.679222 similar5 1 2 2 1 9 1702 986 231 68 96.770607 promotional5 1 2 2 1 10 1949 1013 54 31 90.610390 de-3 1 2 3 0 0 727 1062 1278 48 -1 4 1 2 3 1 0 727 1062 1278 48 -1 5 1 2 3 1 1 727 1074 12 18 59.882832 -5 1 2 3 1 2 762 1070 73 31 88.868462 vices 1 2 3 1 3 856 1068 40 33 96.295082 is5 1 2 3 1 4 905 1068 103 42 96.481903 beings 1 2 3 1 5 1027 1066 219 34 65.241646 conducted5 1 2 3 1 6 1238 1077 37 21 95.857201 in5 1 2 3 1 7 1295 1056 112 41 96.847748 which5 1 2 3 1 8 1427 1064 59 33 96.808769 thes 1 2 3 1 9 1504 1062 271 45 96.200371 determinations 1 2 3 1 10 1794 1064 38 31 96.765572 of5 1 2 3 1 11 1854 1062 151 33 94.593872 whether3 1 2 4 0 0 733 1113 1273 148 -1 4 1 2 4 1 0 733 1113 1271 51 -1 5 1 2 4 1 1 733 1124 61 27 21.346848 a5 1 2 4 1 2 801 1118 215 46 21.346848 participants 1 2 4 1 3 1032 1118 31 44 96.736145 is5 1 2 4 1 4 1079 1122 21 27 73.635376 a5 1 2 4 1 5 1116 1117 131 44 96.842850 winners 1 2 4 1 6 1260 1119 44 36 96.907372 or5 1 2 4 1 7 1313 1109 121 39 45.952053 loser5 1 2 4 1 8 1426 1126 28 22 45.952053 ‘is5 1 2 4 1 9 1471 1115 104 32 96.752319 based5 1 2 4 1 10 1591 1114 48 32 79.461594 on5 1 2 4 1 11 1645 1113 144 41 79.461594 chance,5 1 2 4 1 12 1807 1113 98 33 96.074211 when5 1 2 4 1 13 1924 1114 80 31 96.074211 such4 1 2 4 2 0 765 1163 1241 53 -1 5 1 2 4 2 1 765 1169 41 32 89.304947 is5 1 2 4 2 2 811 1169 146 32 72.021599 not'thes 1 2 4 2 3 962 1169 96 40 80.726761 facts 1 2 4 2 4 1050 1153 11 62 90.700432 ;5 1 2 4 2 5 1072 1157 359 51 82.922447 or-misrepresenting5 1 2 4 2 6 1447 1165 37 32 96.159706 in5 1 2 4 2 7 1503 1175 68 35 96.646675 any5 1 2 4 2 8 1588 1175 141 21 95.617241 manners 1 2 4 2 9 1747 1163 69 53 94.181450 any5 1 2 4 2 10 1834 1166 115 40 20.168671 aspects 1 2 4 2 11 1968 1164 38 31 96.636536 of4 1 2 4 3 0 765 1194 960 69 -1 5 1 2 4 3 1 765 1230 67 31 96.607567 any5 1 2 4 3 2 847 1223 130 28 96.339897 contests 1 2 4 3 3 992 1229 39 22 96.176559 or5 1 2 4 3 4 1045 1194 98 69 96.706619 others 1 2 4 3 5 1147 1217 241 46 33.077545 promotional5 1 2 4 3 6 1402 1216 133 32 96.901558 schemes 1 2 4 3 7 1548 1220 38 27 96.748711 or5 1 2 4 3 8 1601 1214 124 33 96.976982 device.3 1 2 5 0 0 779 1261 1228 65 -1 4 1 2 5 1 0 779 1261 1228 65 -1 5 1 2 5 1 1 779 1287 2 2 16.775826 -5 1 2 5 1 2 810 1272 29 30 80.636726 9,5 1 2 5 1 3 849 1260 257 51 80.930786 Represeriting5 1 2 5 1 4 1119 1259 80 41 65.997482 that5 1 2 5 1 5 1217 1267 147 32 55.204079 an.offers 1 2 5 1 6 1382 1270 72 28 74.630722 toa5 1 2 5 1 7 1471 1261 169 65 96.548378 potential5 1 2 5 1 8 1657 1257 200 51 93.138161 individuals 1 2 5 1 9 1863 1264 144 43 89.796783 ‘partici-3 1 2 6 0 0 701 1305 1307 73 -1 4 1 2 6 1 0 701 1305 1307 73 -1 5 1 2 6 1 1 701 1326 32 36 0.414368 oo5 1 2 6 1 2 766 1319 86 48 96.181396 pants 1 2 6 1 3 866 1320 45 32 96.653053 of5 1 2 6 1 4 917 1322 48 43 90.293922 an5 1 2 6 1 5 978 1315 228 63 96.660484 opportunity5 1 2 6 1 6 1221 1322 37 28 96.397835 to5 1 2 6 1 7 1274 1315 215 51 64.476212 participate.5 1 2 6 1 8 1495 1316 37 32 95.082420 in5 1 2 6 1 9 1549 1327 66 31 96.319656 any5 1 2 6 1 10 1632 1305 230 52 93.477859 promotional5 1 2 6 1 11 1877 1316 131 42 96.159973 scheme3 1 2 7 0 0 712 1366 1297 137 -1 4 1 2 7 1 0 728 1366 1279 47 -1 5 1 2 7 1 1 728 1376 79 37 52.947865 _-or5 1 2 7 1 2 819 1370 129 32 95.902267 receives 1 2 7 1 3 961 1381 20 21 96.062302 a5 1 2 7 1 4 994 1370 75 32 96.062302 free5 1 2 7 1 5 1078 1369 93 43 96.976402 gifts 1 2 7 1 6 1164 1380 29 21 93.178345 is5 1 2 7 1 7 1207 1361 140 40 93.178345 limited5 1 2 7 1 8 1353 1364 36 52 96.811684 to5 1 2 7 1 9 1403 1377 20 22 95.778450 a5 1 2 7 1 10 1436 1367 130 32 96.842789 certain5 1 2 7 1 11 1579 1366 139 43 95.135750 specifics 1 2 7 1 12 1727 1366 121 43 95.135750 periods 1 2 7 1 13 1862 1367 40 31 96.991051 of5 1 2 7 1 14 1916 1367 91 40 96.911354 time,4 1 2 7 2 0 748 1395 1261 98 -1 5 1 2 7 2 1 712 1416 25 17 0.000000 “:5 1 2 7 2 2 761 1421 199 41 17.403862 excepting5 1 2 7 2 3 964 1420 83 32 95.349373 such5 1 2 7 2 4 1059 1395 215 56 87.976456 disclosures.5 1 2 7 2 5 1280 1423 36 28 92.779556 as5 1 2 7 2 6 1330 1411 69 39 83.600563 are-5 1 2 7 2 7 1401 1409 154 84 87.819016 required5 1 2 7 2 8 1576 1417 9 16 20.507446 j5 1 2 7 2 9 1577 1428 36 31 96.278282 in5 1 2 7 2 10 1630 1416 195 57 96.830437 Paragraphs 1 2 7 2 11 1865 1484 3 1 96.138458 35 1 2 7 2 12 1850 1419 19 30 94.536743 35 1 2 7 2 13 1885 1418 40 60 96.956261 of5 1 2 7 2 14 1940 1417 69 32 96.265976 this4 1 2 7 3 0 745 1471 399 32 -1 5 1 2 7 3 1 745 1473 2 3 0.000000 '5 1 2 7 3 2 766 1471 129 32 96.719780 sections 1 2 7 3 3 905 1472 39 31 96.760536 of5 1 2 7 3 4 954 1471 70 32 96.781860 this5 1 2 7 3 5 1034 1471 110 31 96.078156 order.3 1 2 8 0 0 763 1487 1246 176 -1 4 1 2 8 1 0 811 1487 1198 79 -1 5 1 2 8 1 1 811 1515 28 39 92.290802 3.5 1 2 8 1 2 854 1513 143 50 96.937859 Failing5 1 2 8 1 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96.344421 anda 1 2 9 2 0 767 1722 321 43 -1 5 1 2 9 2 1 767 1727 83 38 96.720955 types 1 2 9 2 2 862 1722 226 42 96.809555 represented.3 1 2 10 0 0 770 1770 1241 196 -1 4 1 2 10 1 0 813 1770 1198 45 -1 5 1 2 10 1 1 813 1777 27 29 92.970665 5.5 1 2 10 1 2 860 1773 189 42 96.342262 Engaging5 1 2 10 1 3 1068 1772 36 31 96.290527 in5 1 2 10 1 4 1123 1772 57 31 96.290527 thes 1 2 10 1 5 1200 1771 233 42 96.237267 preparation,5 1 2 10 1 6 1454 1770 204 42 56.428085 promotion,5 1 2 10 1 7 1678 1770 79 41 96.602272 sale,5 1 2 10 1 8 1779 1770 232 42 96.309952 distribution,4 1 2 10 2 0 770 1821 1241 44 -1 5 1 2 10 2 1 770 1835 40 20 96.748489 or5 1 2 10 2 2 822 1834 58 22 96.899277 uses 1 2 10 2 3 892 1824 39 31 96.956848 of5 1 2 10 2 4 943 1834 67 31 96.648918 any5 1 2 10 2 5 1022 1826 139 37 96.181099 contest,5 1 2 10 2 6 1174 1833 109 31 96.430801 game,5 1 2 10 2 7 1295 1833 39 21 96.430801 or5 1 2 10 2 8 1347 1822 97 31 96.703461 others 1 2 10 2 9 1456 1821 231 42 96.562012 promotional5 1 2 10 2 10 1700 1821 116 31 96.661888 devices 1 2 10 2 11 1829 1821 112 33 96.603180 unless5 1 2 10 2 12 1955 1821 56 32 96.239021 thea 1 2 10 3 0 772 1871 1239 45 -1 5 1 2 10 3 1 772 1874 181 42 96.707573 following5 1 2 10 3 2 968 1884 57 22 96.974068 ares 1 2 10 3 3 1042 1873 166 32 95.819542 disclosed5 1 2 10 3 4 1224 1872 127 42 95.819542 clearly5 1 2 10 3 5 1368 1872 69 32 95.890152 ands 1 2 10 3 6 1453 1872 258 41 95.890152 conspicuously5 1 2 10 3 7 1728 1871 38 32 96.852829 in5 1 2 10 3 8 1782 1872 48 31 62.336609 all5 1 2 10 3 9 1847 1871 164 33 90.922089 advertis-4 1 2 10 4 0 770 1921 1009 45 -1 5 1 2 10 4 1 770 1925 61 41 96.410622 ings 1 2 10 4 2 841 1925 69 32 96.752716 ands 1 2 10 4 3 922 1923 230 43 96.496353 promotional5 1 2 10 4 4 1162 1923 157 32 96.648903 materials 1 2 10 4 5 1330 1923 205 41 96.413666 concerning5 1 2 10 4 6 1546 1921 74 33 96.784698 said5 1 2 10 4 7 1630 1922 132 32 92.723923 devices5 1 2 10 4 8 1773 1934 6 20 92.723923 :3 1 2 11 0 0 903 1972 844 45 -1 4 1 2 11 1 0 903 1972 844 45 -1 5 1 2 11 1 1 903 1975 53 42 94.941452 (a)5 1 2 11 1 2 973 1975 74 32 94.941452 Thes 1 2 11 1 3 1057 1975 87 31 96.972191 totals 1 2 11 1 4 1153 1974 143 32 96.645805 numbers 1 2 11 1 5 1306 1974 39 31 97.000755 of5 1 2 11 1 6 1355 1972 111 44 96.923767 prizes5 1 2 11 1 7 1475 1977 37 28 96.846184 to5 1 2 11 1 8 1521 1974 41 41 96.611183 be5 1 2 11 1 9 1572 1973 175 41 92.701073 awarded5 1 2 11 1 10 1733 1968 19 53 92.701073 ;3 1 2 12 0 0 855 1998 1158 171 -1 4 1 2 12 1 0 905 1998 1107 70 -1 5 1 2 12 1 1 905 2026 54 42 92.403511 (b)5 1 2 12 1 2 980 2026 75 32 96.693237 Thes 1 2 12 1 3 1070 2028 96 29 96.351624 exact5 1 2 12 1 4 1180 2028 124 28 96.912941 nature5 1 2 12 1 5 1319 2025 39 32 96.873985 of5 1 2 12 1 6 1374 2025 58 31 97.004745 thes 1 2 12 1 7 1447 2023 121 42 96.994080 prizes,5 1 2 12 1 8 1584 2024 57 31 97.015305 thes 1 2 12 1 9 1657 1998 239 67 96.059807 approximates 1 2 12 1 10 1913 2025 99 31 91.940231 retail4 1 2 12 2 0 856 2073 1157 44 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96.728096 ands 1 2 15 1 8 1573 2328 90 31 96.728096 theirs 1 2 15 1 9 1678 2338 185 23 96.676750 successors5 1 2 15 1 10 1879 2328 70 32 91.843117 ands 1 2 15 1 11 1964 2339 49 22 91.843117 as-4 1 2 15 2 0 689 2379 1326 46 -1 5 1 2 15 2 1 689 2381 105 42 96.410149 signs,5 1 2 15 2 2 807 2380 68 33 96.410149 ands 1 2 15 2 3 889 2380 233 45 95.588364 respondents’5 1 2 15 2 4 1135 2380 136 41 96.013199 officers,5 1 2 15 2 5 1285 2383 129 39 96.355934 agents,5 1 2 15 2 6 1426 2379 292 41 96.116371 representatives,5 1 2 15 2 7 1732 2379 70 32 96.091827 ands 1 2 15 2 8 1816 2379 199 42 96.547836 employees,4 1 2 15 3 0 690 2430 1325 47 -1 5 1 2 15 3 1 690 2432 145 41 96.766541 directly5 1 2 15 3 2 861 2442 39 21 96.296654 or5 1 2 15 3 3 925 2431 152 42 96.612823 through5 1 2 15 3 4 1103 2442 66 35 96.671761 any5 1 2 15 3 5 1195 2430 229 43 96.566521 corporation,5 1 2 15 3 6 1449 2430 204 43 96.438965 subsidiary,5 1 2 15 3 7 1679 2430 150 32 96.819229 divisions 1 2 15 3 8 1854 2441 38 21 95.991791 or5 1 2 15 3 9 1918 2431 97 31 95.991791 other4 1 2 15 4 0 691 2480 1325 46 -1 5 1 2 15 4 1 691 2482 124 40 96.887260 device,5 1 2 15 4 2 836 2482 37 32 96.986603 in5 1 2 15 4 3 893 2481 200 33 96.521347 connections 1 2 15 4 4 1113 2481 85 33 96.831360 with5 1 2 15 4 5 1218 2481 59 33 96.793472 thes 1 2 15 4 6 1296 2481 148 45 96.699524 offerings 1 2 15 4 7 1465 2481 57 32 96.956894 for5 1 2 15 4 8 1543 2481 79 43 96.964050 sale,5 1 2 15 4 9 1642 2481 70 32 96.594383 sales 1 2 15 4 10 1732 2491 40 21 96.965866 or5 1 2 15 4 11 1794 2480 222 33 96.563477 distribution4 1 2 15 5 0 690 2531 1326 44 -1 5 1 2 15 5 1 690 2531 40 34 96.126427 of5 1 2 15 5 2 754 2533 166 42 75.600677 building:5 1 2 15 5 3 938 2540 39 24 96.795334 or5 1 2 15 5 4 1002 2533 116 42 96.544868 siding5 1 2 15 5 5 1142 2533 186 41 96.477058 materials,5 1 2 15 5 6 1352 2543 39 21 96.768730 or5 1 2 15 5 7 1417 2543 67 32 96.635948 any5 1 2 15 5 8 1511 2533 96 31 96.739670 others 1 2 15 5 9 1633 2532 132 31 95.732063 similar5 1 2 15 5 10 1791 2532 164 40 96.177559 products5 1 2 15 5 11 1979 2533 37 31 96.603035 in 710 FEDERAL TRADE COMMISSION. DECISIONS Decision and Order; 81 F.T.C.

commerce, as “commerce” is defined in the Federal Trade Commission Act,:do forthwith cease and desist, orally or in any other manner, directly or indirectly, from:

1. Representing that any siding or other building product, renders all other similar products obsolete; or otherwise mnistepresenting siding or other building products. 2. Representing that any siding or other building product j is different when such product is not different and representing that any such product is new more than six months after initial introduction to the public, exclusive of any test marketing periods. 3. Representing that any siding or other building product will eliminate.the need for house painting and siding repairs for as long as 30 years or forever.

4. Representing, directly or by implication, that any of re- -spondents’ products are guaranteed unless the nature and extent. _of the- guarantee, the identity of the guarantor, and the manner in which the guarantor. will perform thereunder are clearly and conspicuously disclosed.

5. Representing that financing is available without disclosing that credit is only available on approval of credit and without disclosing the source of such financing.

6. Representing that lenient credit terms are available, including, but not limited to use of the term “easy terms.” 7. Representing generally that a mailer recipient or participant ‘in any promotional device may receive a free gift or participate in a promotion without obligation or condition in connection with a promotion where a salesman may contact the recipient or participant.

It is further ordered, That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. 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 offering for sale or sale of any product 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 respondents notify the Commission at least thirty (80) days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the e SUGAR INFORMATION, INC., ET AL. 711 TW: . Complaint 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. | ae It 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.