Valley Premium Plan

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

IN THE MATTER OF V ALLEY PREMIUM PLAN, ET AI..

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Doeket C-2629. Complaint, Jan. , 1975 - Decision, Jan. , 1975 Consent order requiring a Pawtucket, R.I., moneylender in connection with financing insurance premiums, among other things to cea..;e violating the Trth in Lending Act by failing to disclose to consumers, in connection with the extension of consumer 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 Truth in Lending Act and the implementing regulation promulgated thereunder, and the Federal Trade Commission Act, and by virue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Valley Premium Plan, a parnership, and Wiliam Fellner, George 1. Parker, Edward L. Foster, Willam Hunt, R. Spencer Kyle, Abraham Snyder, George Stevens, John T. Wilmot and Alred E. Hutchinson individually and as parners in said partnership, hereinafter referred t9 as respondents, have violated the provisions of said Acts and implementing regulation, and it appearing to the Commssion 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 Valley Premium Plan is a parnership organized, existing, and doing business under and by virtue of the laws of the State of Rhode Island and Providence Plantations having its principal offce and place of business located at 100 Ea. t Ave. Pawtucket, R. 1.

Respondents Willam Fellner, George 1. Parker, Edward L. Foster Wiliam Hunt, R. Spencer Kyle, Abraham Snyder, George Stevens John T. Wilmot and Alfred E. Hutchinson, are individuals and are partners in the partnership respondent. They formulate, direct and control the policies, acts and practices of the parnership respondent Complaint 85 F.T.C.

including the acts and practices hereinafter set forth. Their address is the same as that of partnership 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 as aforesaid, respondents regularly extend and for some time last past have regularly extended 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 their business as aforesaid, have caused and are causing to be extended consumer credit as "consumer credit" is defined in Regulation , and have caused and are causing customers to execute a binding combination promissory note and disclosure statement, hereinafter ref cited 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 in some instances to disclose the annual percentage rate accurately to the nearest quarter of one percent, in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b)(2) of Regulation Z.

2. Failed in some instances to use the tcnn "unpaid balance of cash price" to describe the difference between the cash price and the total downpayment as required by Section 226.8(c)(3) of Regulation Z. 3. 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, describing that sum as the "deferred payment price," as required by Section 226.8(c)(8)(ii) of Regolation Z. 4. Failed to make consumer credit cost disclosures when any existing extension of credit is refinanced, or two or more existing extensions of credit are consolidated, or an existing obligation is increased, as prescribed by Section 226.8(j) of Regulation Z. 5. Failed to fursh the consumer 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 Regolation Z.

6. Provided additional information which misleads or confuses the customer or observer or detracts attention from the information required to be disclosed by Regolation Z, in violation of Section 226.6(c) of Regulation Z.

7. Failed to make the 'disclosures required by Section 226.8 of VALLEY PREMIUM PLAN, ET AL. 145 14:J Decision and Order Regolation Z clearly, conspicuously and in a meaningful sequence, as required by Section 226.6(a) of Regolation Z. PAR. 5. Pursuant to Section 103(q) of the Trth in Lending Act respondents' aforesaid failures to comply with Regolation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have thereby violated the Federal Trade Commission Act. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furished thereafter with a copy of a draft of complaint which the Boston Regional Offce proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Troth in Lending Act and the implementing regolation promulgated thereunder and violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the 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 rea.son 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 prescribed in Section 2. J4(b) of its roles, the Commission hereby issues its complaint, makes the following jursdictional findings, and enters the following order:

1. Respondent Valley Premium Plan is a partnership organized of the laws of the existing, and doing business under and by virue State of Rhode Island and Providence Plantations with its principal office and place of business located at 100 East Ave., Pawtucket, R1. Respondents Wiliam Fellner, George 1. Parker ;dward L. Foster Willam Hunt, R. Spencer Kyle, Abraham Snyder, George Stevens John T. Wilmot and Alfred E. Hutchinson are individuals and are partners in said parnership. They formulate, direct and control the policies, acts and practices of said parnership and their principal office and place of business is located at the above stated address. ), Decision and Order 85 F. 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 Il is ordered That respondents Valley Premium Plan, a partnership, and Wiliam Fellner, George 1. Parker, Edward L. Foster, Wiliam Hunt, R. Spencer Kyle, Abraham Snyder, George Stevens, John T. Wilmot and Alfred E. Hutchinson, individually and as copartners trading and doing business as Valley Premium Plan, or under any other name or names, their successors and assigns, 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 CFR Truth in Lending Act (Pub. L. 90-321, 15 U. C. 91601 9226)et seq.of the forthwith cease and desist from:

1. Failing to disclose the annual percentage rate accurately to the nearest quarter of one percent, in accordance with Section 226.5 of Regulation Z as required by Section 226.8 (b)(2) of Regulation Z. 2. Failng to use the term "unpaid balance of cash price" to describe the difference between the cash price and the total downpayment as required by Section 226.8(c)(3) of Regulation Z. 3. Failing to disclose the sum of the cash price, all charges which 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. 4. Failng to make consumer credit cost disclosures when any existing extension of credit is refinanced, or two or more existing extensions of credit are consolidated, or an existing oblig-ation is increased, as prescribed by Section 226.8U) of Regulation Z. 5. Failing to furish 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. Stating, utilizing or placing any additional information in conjunction with the disclosures required by Regulation Z to be made which information misleads or detracts attention from the information required by Regulation Z to be disclosed.

7. Failing to make all disclosures required by Regulation Z clearly, conspicuously, and in meaningful sequence, as required by Section 226.6(a) of Regulation Z.

tit'.. LI..J:\I Ur. LUrU'i "--,V. , J:J. n.... 147 Decision and Order 8. Failng, in any consumer credit transaction or advertisement, to make an disclosures, determined in accordance with Section 226.4 and Section 226.5 of Regulation Z, at the time and in the manner, form and amount required by Sections 226. , 226. , and 226.10 of Regulation Z. It is further ordered That respondents deliver a copy of this order to cease and desist to an present and future personnel of respondents engaged in the consummation of any extension of consumer credit, or in any aspect of the 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 parnership respondent, such as dissolution, assignent, or sale, resulting in the emergence of a successor parnership, or any other change in the parnership which may affect compliance oblig-ations arsing out of the order.

It is further ordered That the individual respondents named herein promptly notify the Commission of the discontinuance of their present business or employment and of their affiliation with a new business or employment. Such notice shall include respondents' curent business address and a statement as to the nature of the business or employment in which they are engaged as wen as a description of their duties and responsibilities.

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 maner and form in which they have complied with this order.