Insurance Finance Plan Co

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IN THE MATTER Of' INSURANCE FINANCE PLAN CO., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Docket C-2622. Complaint, Jan. , 197.S - Decision, Jan. , 1975 Consent order requiring a Central Falls, R.I., moneylender in connection with the financing of insurance premiums, among other things to cease violating the Truth in Lending Act by failing to disclose to consumers, in connection with the extension of commmer credit, such infonnation as required by Regulation Z of the said Act.

Appearances For the Commission: Lois M. Woocher. For the respondents: Pro se.

COMPLAINT Pursuant to the provisions of the Trth 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 Insurance Finance Plan Co., a corporation, and Maurice R. Loiselle individually and as an officer of said corporation, hereinafter refelTed 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:

PARAGRAPH 1. Respondent Insurance Finance Plan Co. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Rhode Island and Providence Plantation with its principal office and place of business located at 887 Dexter St. Central Falls R.I.

Respondent Maurce R. Loiselle is an offcer 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 corporate respondent.

PAR. 2. Respondents are now, and for some time last past have been engaged in the business of lending money to the public in connection with the financing of insurance premiums.

PAR. 3. In the ordinary course and conduct of their business Complaint 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 I , 1969, respondents, in the ordinary course and conduct of their business as aforesaid, have caused and are causing to be extended consumer credit, as I'consumer credit" is defined in Regulation Z, and have caused and are causing customers to execute a binding combination promissory note and disclosure statement hereinafter referred to as the "statement." Respondents do not provide these customers with any other consumer credit cost disclosures. By and through the use of the statement, respondents: 1. Failed to use the term "cash price" as defined in Section 226.2(i) of Regulation Z, to describe the purchase price of the item, as required by Section 226.8(c)(I) of Regulation Z.

2. Failed to use the term "cash downpayment" to describe the downpayment in money made in connection with the credit sale, as required by Section 226.8(c)(2) of Regulation Z. 3. Failed to use the term "unpaid balance of cash price" to describe the differencc between the cash price and the total downpayment, as required by Section 226.8(c)(3) of Regulation Z. 4. Failed to disclose the sum of the cash price, all charges which are included in the amount financed but which are not part of the finance charge, and the finance charge, and to describe that sum as the deferred payment price," as required by Section 226.8(c)(8)(ii) of Regulation Z.

5. Failed in some instances to furish consumers with a duplicate of the instrument containing the required disclosures or a statement by which the required disclosures are made, as required by Section 226.8(a) of Regulation Z.

PAR. 5. Subsequent to July I, 1969, respondents have caused to be published advertisements as "advertisement" is defined in Section 226.2(b) of Regulation Z for the purpose of aiding, promoting or assisting, directly or indirectly, the extension of consumer credit in connection with the financing of insurance premiums. By and through the use of these advertisements, the respondents have stated the period of repayment without also stating all of the following items in terminology prescribed under Section 226.8 of Regulation Z, as required by Sectipn 226.IO(d)(2) of Regulation Z: 1. The cash price;

2. The amount of the downpayment required or that no downpayment is required, as applicable;

Decision and Order 85 F. 3. The number, amount, and due dates or periods of payments scheduled to repay the indebtedness if the credit is extended; 4. The amount of the finance charge expressed as an annual percentage rate; and 5. The deferred payment price.

PAR. 6. Pursuant to Section 103(q) of the Trth in Lending Act respondents' aforesaid failures to comply with the provisions of Regulation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have thereby violated the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commision 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 Boston 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 violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settement 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 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 sixty (60) days, now in furher conformty with the procedure prescrihed 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 Insurance Finance Plan Company is a corporation organized, existing and doing business under and by viue of the laws of the State of Rhode Island and Providence Plantations, with its principal offce and place of business located at 887 Dexter St., Central Falls Respondent Maurce R. Loiselle is an officer of said corpmtion. He , ... LJrU- rln.nll\.-,"- '-.n '-.L Decision and Order formulates, directs and controls the policies, acts and practices of the said corporation, and his principal offce and place of business is located at the above-stated address.

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

ORDER It is ordered That respondents Insurance Finance Plan Co., a corporation, its successors or assigns, and its officers, and Maurice R. Loiselle, 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 uconsumer credit" and "advertisement" are defined in Regulation Z (12 C. R. !\226) of the Trth in Lending Act (Pub. L. 90- 321 15 D. C. 1601 et seq) do forthwith cease and desist from: I. Failing to use the term "cash price " as defined in Section 226.2(i) of Regulation Z, to describe the purchase price of the item, as required by Section 226.8(c)(1) of Regulation Z. 2. Failng to use the term "cash downpayment" to describe the downpayment in money made in connection with the credit sale, as required by Section 226.8(c)(2) of Regulation Z. 3. Failng to use the term "unpaid balance of cash price" to describe the difference between thc cash price and the total downpayment as required hy Section 226.8(c)(3) of Regulation Z. 4. Failing to disclose the sum of the cash price, all charges which are included in the amount financed but which are not par of the finance charge, and the finance charge, and to describe that sum .as the deferred payment price," as required by Section 226.8(c)(8)(ii) of Regulation Z.

5. Failing to furnish the consumer with duplicate of the instrument containing the required disclosures or a statement by which the required disclosures are made, as required by Section 226.8(a) of Regulation Z.

6. Failing in any consumer credit transaction or advertising to make all disclosures determined in accordance with Sections 226.4 and 226. of Regulation Z, at the time and in the manner, fonn and amount required hy Sections 226. , 226.8 and 226.10 of Regulation Z. 7. Stating in any advertisement the period of repayment which can be arranged in connection with a consumer credit transaction, without also stating all of the following itcms in termnology prescribed under Decision and Order 85 F. Section 226.8 of Regulation Z, as reqilred hy Section 226.IO(d)(2) of Regulation Z.

(i) The cash price;

(ii) The amount of the downpayment required or that 110 down payment is required, as applicable;

(iii) The number, amount, and due dates or periods of payments scheduled to repay the indebtedness if the credit is extended; (iv) The amount of the finance charge expressed as an annual percentage rate; and (v) The deferred payment price.

It is further ordered That respondents deliver a copy of this order to cease and desist to all present and future personnel of respondents now or hereafter engaged in the consummation of any extension of consumer credit or in any aspect of preparation, creation or placing of advertising; and that respondents secure a signed statement acknowledging receipt of said order from each such person. It is further ordered That 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 individual respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiliation with a new business or employment. Such notice shall include respondent' s current business address and a statement as to the nature of the business or employment in which he is engaged as well as a description of his duties and responsibilties.

It is further ordered That the respondents herein shall within sixty (60) days after service upon them of this order, fie with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. INSURANCE BUDGETING, INC., ET AL.

Complaint