Center Motors, Inc

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

In Tee Marrer or CENTER MOTORS, INC., ET AL.

CONSENT ORDER IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE TRUTH IN LENDING ACTS Docket C-2448. Complaint, Sept. 11, 1973—Decision, Sept. 11, 1978. Consent order requiring a Marlow Heights, Maryland, retailer and distributor of used cars, among other things to cease violating the Truth in Lending Act by failing to disclose to consumers, in connection with the extension of consumer credit, such information as required by Regulation Z of the said act. Appearances For the Commission: Bernard Rowitz.

For the respondents: Jacob C. Lish, Washington, D.C. 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 Center Motors, Inc., a corporation, and Bernard L. Gordon, individually and as an officer of said corporation, hereinafter sometimes referred to as respondents, have violated the provisions of said Acts and implementing regulation, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

Paracrarn 1. Respondent Center Motors, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Maryland, with its principal office and place of business located at 3610 Branch Avenue, Marlow Heights, Maryland. Complaint 83 F.T.C.

Respondent Bernard L. Gordon is an officer of the corporate respondent. He formulates, directs and controls the policies, acts and practices of the corporation, including the acts and practices hereinafter set forth. His address is the same as that of the corporation respondent.

Par. 2. Respondents are now, and for some time last past have been engaged in the offering for sale and retail sale and distribution of used cars to the public.

Par. 3. In the ordinary course and conduct of their business as aforesaid, respondents regularly extend consumer credit, as “consumer credit” is defined in Regulation Z, the implementing regulation of the Truth in Lending Act, duly promulgated by the Board of Governors of the Federal Reserve System.

Par. 4. Subsequent to July 1, 1969, respondents, in the ordinary course of business as aforesaid, and in connection with their credit sales, as “credit sale” is defined in Regulation Z, have caused and are causing customers to execute a binding Used Car Order Contract, hereinafter referred to as the “Order Contract.” Respondents do not provide these customers with any other consumer credit cost disclosure.

By and through the use of the order contract, respondents: 1. Fail, in some instances, to disclose the sum of the cash price, all charges which are included in the amount financed but which are not part of the finance charge, and the finance charge, describing that sum as the “deferred payment price,” as required by Section 226.8 (c) (8) (ii) of Regulation Z.

2. Fail, in some instances, to include in the finance charge the amounts of charges or premiums for credit life or credit accident and health insurance written in connection with a credit transaction, in instances where respondents fail to obtain from the customer desiring such insurance coverage, a specific dated and separately signed affirmative _written indication of such desire, in violation of Section 226.4(a) (5) of Regulation Z. Thereby, respondents fail, in these instances, to disclose the finance charge accurately in accordance with Section 226.4 of Regulation Z as required by Section 226.8 (c) (8) (i) of Regulation Z. Thereby, respondents further fail to accurately disclose the amount financed as required by Section 226.8(c) (7) of Regulation Z, by including the aforementioned charges in the amount financed. Thereby, respondents further fail to accurately disclose the annual percentage rate computed in accordance with Section 226.5(b) of Regulation Z, _as required by Section 226.8 (b) (2) of Regulation Z. 407 Decision and Order Par 5. Pursuant to Section 103(q) of the Truth in Lending. Act, respondents’ aforesaid failures to comply with the provisions of Regulation Z consitute violations of that Act and, pursuant to Section 108 thereof, respondents have thereby violated the Federal Trade Commission Act.

Decision AND Orper 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 a copy of a draft of complaint which the Washington, D.C. Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Truth in Lending Act and the implementing regulation promulgated thereunder, and of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Center Motors, Inc., is a corporation organized, existings 1 3 5 1 2 646 1929 67 31 95.827103 ands 1 3 5 1 3 728 1929 106 41 96.653374 doing5 1 3 5 1 4 845 1929 153 32 96.390289 business5 1 3 5 1 5 1012 1930 108 31 96.581352 under5 1 3 5 1 6 1135 1930 66 32 96.505966 ands 1 3 5 1 7 1215 1931 44 40 96.458992 by5 1 3 5 1 8 1273 1931 113 32 96.121605 virtues 1 3 5 1 9 1399 1932 39 30 96.994949 of5 1 3 5 1 10 1450 1932 58 31 96.914261 thes 1 3 5 1 11 1520 1932 82 31 96.953842 laws5 1 3 5 1 12 1616 1932 40 31 96.672203 of5 1 3 5 1 13 1666 1932 59 31 97.002838 thes 1 3 5 1 14 1738 1931 98 33 96.738914 States 1 3 5 1 15 1848 1932 39 31 96.819931 of4 1 3 5 2 0 570 1978 1319 45 -1 5 1 3 5 2 1 570 1978 194 42 96.331039 Maryland,5 1 3 5 2 2 787 1980 83 31 96.542999 with5 1 3 5 2 3 892 1980 45 32 96.849594 its5 1 3 5 2 4 958 1980 171 42 96.364006 principals 1 3 5 2 5 1152 1980 88 32 96.440132 offices 1 3 5 2 6 1263 1982 66 31 96.012253 ands 1 3 5 2 7 1351 1982 95 41 96.430672 places 1 3 5 2 8 1468 1981 40 32 96.456688 of5 1 3 5 2 9 1526 1981 154 33 96.841499 business5 1 3 5 2 10 1699 1981 132 33 96.413864 located5 1 3 5 2 11 1852 1985 37 28 96.531654 at4 1 3 5 3 0 571 2031 929 43 -1 5 1 3 5 3 1 571 2031 81 31 96.372330 36105 1 3 5 3 2 664 2031 139 31 96.466522 Branch5 1 3 5 3 3 815 2032 150 39 96.399956 Avenue,5 1 3 5 3 4 976 2032 145 31 96.049057 Marlow5 1 3 5 3 5 1135 2031 160 43 94.911667 Heights,5 1 3 5 3 6 1306 2032 194 42 96.311256 Maryland.3 1 3 6 0 0 569 2080 1320 194 -1 4 1 3 6 1 0 612 2080 1276 44 -1 5 1 3 6 1 1 612 2080 220 42 94.764328 Respondents 1 3 6 1 2 847 2082 156 31 91.544403 Bernard5 1 3 6 1 3 1018 2082 37 31 91.544403 L.5 1 3 6 1 4 1071 2081 140 34 95.948265 Gordon5 1 3 6 1 5 1226 2082 29 31 95.948265 is5 1 3 6 1 6 1270 2094 42 19 96.650421 an5 1 3 6 1 7 1327 2083 109 32 96.950226 officers 1 3 6 1 8 1447 2083 40 32 96.741920 of5 1 3 6 1 9 1499 2083 76 32 96.613258 said5 1 3 6 1 10 1591 2083 226 41 96.287552 corporation.5 1 3 6 1 11 1832 2083 56 32 96.741005 He4 1 3 6 2 0 571 2130 1316 46 -1 5 1 3 6 2 1 571 2130 212 41 96.103516 formulates,5 1 3 6 2 2 799 2131 123 32 96.568214 directs5 1 3 6 2 3 937 2133 67 31 96.692970 ands 1 3 6 2 4 1020 2133 147 31 96.961281 controls5 1 3 6 2 5 1181 2133 57 31 96.967415 thes 1 3 6 2 6 1254 2133 148 41 96.304459 policies,5 1 3 6 2 7 1417 2137 70 28 96.304459 acts5 1 3 6 2 8 1501 2136 68 31 96.827202 ands 1 3 6 2 9 1583 2133 165 43 96.760071 practices5 1 3 6 2 10 1761 2133 40 32 96.913200 of5 1 3 6 2 11 1813 2133 74 32 96.783836 said4 1 3 6 3 0 569 2181 1320 45 -1 5 1 3 6 3 1 569 2181 226 41 95.550873 corporation.5 1 3 6 3 2 829 2182 67 31 95.348343 His5 1 3 6 3 3 931 2182 139 32 95.348343 address5 1 3 6 3 4 1102 2183 29 32 96.714226 is5 1 3 6 3 5 1163 2182 57 32 96.412003 thes 1 3 6 3 6 1252 2193 91 22 96.832123 same5 1 3 6 3 7 1375 2194 38 21 96.832123 as5 1 3 6 3 8 1443 2184 77 31 96.473671 that5 1 3 6 3 9 1552 2184 39 31 96.549591 of5 1 3 6 3 10 1621 2184 59 31 96.642006 thes 1 3 6 3 11 1711 2188 178 38 96.642006 corporate4 1 3 6 4 0 570 2234 214 40 -1 5 1 3 6 4 1 570 2234 214 40 96.503601 respondent. Decision and Order 83 F.T.C.

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

ORDER It is ordered, That respondents Center Motors, Inc., a corporation, or under any other name or names, its successors and assigns, and its officers, and Bernard L. Gordon, individually and as an officer of said corporation, and respondents’ agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with any extension of consumer credit or advertisement to aid, promote or assist, directly or indirectly, any extension of consumer credit, as “consumer credit” and “advertisement” are defined in Regulation Z (12 C.F.R. § 226) of the Truth in Lending Act (Pub. L. 90-821, 15 U.S.C. 1601 e¢ seg.), do forthwith cease and desist from:

1. Failing to disclose the sum of the cash price, all charges which are included in the amount financed but which are not part of the finance charge, and the finance charge, describing the sum of these as the “deferred payment price,” as required by Section 226.8 (c) (8) (11) of Regulation Z.

2. Failing to include in the finance charge the amount of charges or premiums for credit life or credit accident and health insurance written in connection with a credit transaction unless: (a) such insurance coverage is not required by the respondents and this fact is clearly and conspicuously disclosed in writing to the customer; and (b) any customer desiring such insurance coverage gives specific dated and separately signed affirmative written indication of such desire after written disclosure of the cost of such coverage, as required by Section 226.4(a) (5) of Regulation Z; and in those instances, failing to accurately. disclose the amount financed or required by Section 226.8(c) (7) of Regulation Z, by including the aforementioned charges in the amount financed.

3. Failing to compute and disclose accurately the finance charge, accurately in accordance with Section 226.4 of Regulation Z, as required by Section 226.8(c) (8) (i) of Regulation Z. 4. Failing to compute and disclose accurately the annual percentage rate, computed in accordance with Section 226.5(b) of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z. ee ee tel ILL 407 Decision and Order 5. Failing in any consumer credit transaction or advertisement to make all, disclosures, determined in accordance with Sections 926.4 and 296.5 of Regulation Z, at the time and in the manner, form and amount required by Sections 226.6, 226.8 and 226.10 of Regulation Z.

6. Failing to promptly notify the Commission of the discontinuance of respondents’ present business or employment and of their affiliation with a new business or employment; and to include in such notice, the respondents’ current business address and a statement as to the nature of the business or employment in which they are engaged, as well as a description of their duties and responsibilities.

It is further ordered, That the respondents deliver a copy of this order to cease and desist to all present and future personnel of the respondents engaged in the computation, preparation or execution of consumer credit documents 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 (30) days prior to any proposed change in the corporate respondent, such as dissolution, assignment or sale, resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of the order. 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 with which they have complied with this order.