Jonel Pay Plan, Inc

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IN Tile MA'IR JONEL PAY PLAN, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGIW VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUT IN Lending ACTS Docket C-2661. Complaint, May, 1975 - Deci.-;ion, May S, 1975 Consent order requiring a Warick, moneylender in connection with financinginsurance premiums, among other things to cea."c 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 Reguation Z of the said Act.

Appearances For the Commission: James S. Parker. ..Vl'lr..u J:.M1 C.u.M \J.

836 Complaint For the respondents: Bernard C. Gladtone, Gladtone Zarlenga Providenee, R.

COMPLAINT Pursuant to the provisions of the Trth in Lending Act and the implementing reguation 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 Janel Pay Plan, Inc., a corporation, and John R. Young, individually and as an officer of said corporation, hereinafter 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 eomplait stating its charges in that respect as follows: PARAGRAPH 1. Respondent J onel Pay Plan, Ine. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Rhode Island and Providenee Plantations, with its principal office and place of business located at 3308 Post Rd., Warek, Respondent John R. Young is an offieer of the eorprate 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 eorprate respondent. PAR. 2. Respondents are now, and for some time last past have been engaged in the business of lendig money to the public in connection with the finaneing of insuranee premium.

PAR. 3. In the ordinar coure and conduct of their business as aforesaid, respondents reguarly extend and for some time last past have reguarly extended consumer credit, as uconsumer credit" is defined in Reguation Z, the implementing reguation of the Trth in Lendig Act, duly promulgated by the Board of Governors of the Federal Reserve System.

PAR. 4. Subsequent to .Iuly 1, 1969, respondents, in the ordinar coure of their business as aforesaid, have caused and are causing to be extended consumer credit as I'consumer credit" is defined in Regulation , and 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. Faied to use the term "unpaid balance of eash price" to describe the difference between the eash price and the total downpayment as required by Section 226.8(c)(3) of Regulation Z. 8:1 FIWERAL TRADE COMMISSION DECISIONS Decision and Order 85 F. 2. Failed in some instances to disclose the "annual percentage rate accurately to the nearest quarer of one percent, in aeeordance with Seetion 226.5 of Regulation Z, as required by Section 226.8(b)(2) of Regulation Z.

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

4. Failed to make the disclosures required by Section 226.8 of aERegulation Z clearly, eonspieuously and in a meaningful sequence, required by Section 226.6(a) of Regulation Z. PAR. 5. Pursuant to Section 103(q) of the Trth in Lending Act respondents' aforesaid failures to comply with Regulation Z constitute violations of that Act and, puruant to Section 108 thereof, respondents have thereby violated the Federal Trde Commission Act. DECISION AND ORDER The Federal Trdde Commission having initiated an investigation of certain acts and practices of the respondents named in the caption thereafter with ahereof, and the respondents having been furshed copy of draft of complaint which the Boston Regional Offce proposed to present to the Commssion 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 Federa 'frdde Commssion Act; and The respondents and counsel for the Commission having thereafter executed an agreement eontanig a eonsent order, an admission by the respondents of all the jursdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of such agrement is for settement purses only and does not constitute an admission by respondents that the law hae been violated aE alleged in such complaint and waivers and other provisions aE 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 stating its violated the said Acts, and that complaint should issue charges in that respect, and having thereupon aeeepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in furher eonformty with the procedure prescribed in Section 2.34(b) of the rules, the Commission hereby issues its complaint, makes the following jursdictional findings, and enters the following order:

1. Respondent Janel Pay Plan, Ine. is a eorpordtion organd ), JONEL PAY PLAN, INC. 8.39 836 Decision and Order existing and doing business under and by virtue of the laws of the State of Rhode Island and Providenee Plantations, with its principal offce and place of business located at 3308 Post Rd., Warek, R.L Respondent John R. Young is an offcer of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation, including the acts and practices hereinafter set forth. His address is the same as that of said corporation. 2. The Federal Trade Commssion has jursdietion 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 Jonel Pay Plan, Ine., a eorpration, its suecessors and assigns, and its officers, and John R. Young, individually and as an officer of said corporation, and respondents' agents representatives and employees, directly or through any eorpration subsidiar, division or other device, in connection with any extension of consumer credit or advertisement to aid, promote or assist, diectly or indirectly, any extension of consumer credit, as "con..'mmer credit" and advertisement" are defined in Reguation Z (12 C. R. 9226) of the Truth in Lending Act (Pub.L. 90-321, 15 U. C. 91601 et seg. forthwith cease and desist from:

1. Failing to use the term "unpaid balance of cah price" to describe the difference between the eash price and the total downpayment, as required by Section 226.8(e)(3) of Regulation Z. 2. Failing to disclose the annual percentage rate aceurtely to the nearest quarer of one percent, in accordanee with Section 226.5 of Regulation Z, as required by Section 226.8(b)(2) of Reguation Z. 3. Stating, utiliing or placing any additional information in conjunction with the disclosures required to be made by Reguation Z which information misleads, confuses, contradicts, obscures or detracts attention from disclosure of information required to be disclosed by Regulation Z, in violation of Seetion 226.6(e) of Regulation Z. 4. Failing to make all disclosures required by Reguation Z, clearly, eonspieuously and in meaningful sequence, as required by Section 226.6(a) of Reguation Z.

5. Failing, in any consumer credit trasaction or advertisement, to make all disclosures detennned in aecordance with Seetions 226.4 and 226.5 of Regulation Z, at the time and in the manner, form and amount required by Seetions 226. , 226.8 and 226.10 of Regulation Z. It is further ardered That respondents deliver a copy of this order to cease and desist to all present and future personnel of respondents engaged in the consummation of any extension of consumer credit or in Complaint 85 F.

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 orckred That respondents notify the Commssion 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 eomplianee obligations arising out of the order. It is fi"rther onlered That the individual respondent named herein promptly notify the Commssion of the diseontinuanee of his present business or employment and of his affiiation with a new business or employment. Such notice shall inelude respondent's eurent 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 servce 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 eomplied with this order.