Uni-Service Credit Corp

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

IN THE MATTER OF UNI-SERVICE CREDIT CORP., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FED RAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Docket C-2647. Complaint, Mar. , 1975 - Decisiun, Mar. , 1975 Consent order requiring a New Hartford, N. , moneylender in connection with financing of insurance premiums, among other things to cease violating the Truth in Lending Act by failng 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: Marc A. Comras.

For the respondents: John P. Sullivan New Hartford, N. 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 Uni-Service Credit Corp., a corporation, Insurance Pay Plan, Inc., a corporation, and John J. O'Brien, individually and as an officer of said corporations, hereinafter refers€d 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 Un i-Service Credit Corp. is a corporation 5:12 FEDERAL TRADE COMMISSION DECISIONS Complaint R5 F.

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 180 Genesee St., New Hartford, N. Respondent Insurance Pay Plan, Inc., is a corporation organized existing and doing business under and by virtue of the laws of the State of Rhode Island and Providence Plantations, with its principal office and place of business located at 569 Warwick Ave., Warwick, R. Respondent Insurance Pay Plan, Inc. is a wholly-owned corporate subsidiary of respondent Uni-Service Credit Corp. The aforesaid respondents cooperate and act together in carrying out the acts and practices hereinafter set forth.

Respondent John J. O'Brien is an officer of each of the corporate respondents. He formulates, directs and controls the policies, acts and practices of the corporations, including the acts and practices hereinafter set forth. His address is the same as that of Uni-Service Credit Corp.

PAR. 2. Respondents are now, and for some time last past have been engaged in the business of offering to lend and 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 offer to extend consumer credit and for some time last past have regularly extended consumer credit as consumer credit" is defined in Hegulation 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, and in connection with their financing of insurance premiums, which are credit sales as "credit sale is defined in Regulation Z, have caused and are causing customers to execute a binding premium finance agreement, hereinafter referred to as the "agreement." Respondents do not provide these customers with any other consumer credit cost disclosures. By and through the use of the agreement, respondents, 1. Failed to use the term "unpaid balance of cash price" to describe the difference between the cash price and the total down payment as required by Section 226.8(c)(3) of Regulation Z. 2. Failed 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, and to describe that sum as the "deferred payment price " as required by Section 226.8(c)(8)(ii) of Regulation Z.

3. Failed in some instances to disclose the annual percentage rate U", ' """"4-. ---- 531 Decision and Order computed in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b)(2) of Regulation Z.

4. 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.

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

PAR. 5. Pursuant to Section 10B(q) of the Truth in Lending Act respondents' aforesaid failures to comply with the provisions of Regulation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have therehy violated the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the 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 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 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 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 further conformity with the procedure prescrihed in Section 2.34(b) of the rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Uni-Service Credit Corp. is a corporation organized 5:H FEDERAL TRADF; COMMISSION DECISIONS Decision anrl Orrler K5 F. 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 180 Genesee St., Ncw Hartford, N.

Respondent Insurance Pay Plan, Inc., is a corporation organized existing and doing business under and by virtue of thc laws of thc State of Rhodc Island and Providence Plantations, with its principal office and place of business located at 569 Warwick Avc., Warwick, R. Respondent Insurance Pay Plan, Inc., is a wholly-owned corporate subsidiary of respondent Uni-Service Credit Corp. The aforesaid respondents cooperate and work together in carrying out the acts and practices hereinafter set forth.

Respondent John .J. O'Brien is an officer of said corporations. He formulates, directs and controls the policies, acts and practices of said corporations, and his principal office and place of business is located at 180 Genesee St., New Hartford, N.

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 Uni-Service Credit Corp., a corporation, its successors and assigns, and its officers, and Insurance Pay Plan, Inc., a corporation, its successors and assigns, and its officers and John.J. O'Brien, individually and as an officer of said corporations 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. R. 9226) of the Truth in Lending Act (Pub.L. 90- 321 15 U. C. 91601 et seq. do forthwith cease and desist from: 1. Failing to use the term "unpaid balance of cash price" to describe the difference between thc cash price and the total downpaymcnt as required by Section 226.8(c)(3) of Regulation Z. 2. 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, and to describe that sum as the deferred paytnent price" as required by Section 226.8(c)(8)(ii) of Regulation Z.

3. Failing to disclose the annual percentage rate, computed in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b )(2) of Regulation Z.

4. Failing to disclose the annual percentage rate accurately to the . .. , . .u--_.

531 Decision and Order 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. 5. Stating, utilzing or placing any additional information in conjunction with the disclosures required by Regulation Z to be made which information misleads or confuses the customer, or contradicts obscures or detracts attention from the information required by Regulation Z to be disclosed, as prohibited by Section 226.6(c) of Regulation Z.

6. Failng, in any consumer credit transaction or advertisement, to make all 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. , 226.8 and 226. 10 of Regulation Z. It is further ordered That respondents deliver a copy of this order to all present and future penmnnel of respondents now or hereafter 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 corporate respondents such as dissolution, assignment or sale resulting in the emergence of a successor corporation or corporations, the creation or dissolution of subsidiaries or any other change in the corporations 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. 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 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 manner and form in which they have complied with this order. 5a6 FEDERAL 'J'ADE COMMISSION DECISIONS Complaint 85 F.