C.D. Paige Company. Inc

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IN THE MATTER OF D. PAIGE COMPANY, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUT IN LENDING ACTS Docket C-2672. Complaint, June 1975-Decision June, 1975 Consent order requiring an East Providence, R.I., seller of immr.mce at retail, among other things to cease 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. Appeamn.es For the Commission: Raymond J. McNulty. For the respondents: Richf1rd T. Linn, Gunning, LaF'azia, Gnys & Selya, Inc. Providence, R.

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 virue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that C. D. Paige Company, Inc., a corpration, trading .and doing business as Premium Budget Plan, and Kenneth E. Norrs, individually and as an offcer of said corpration, hereinafter referred to as respondents, have violated thc provisions of said Acts and the implementing regulation, and it appearing to the Commssion that a proceeding by it in respect C. D. PAIGE COMPANY, INc. 1049 1048 Complaint thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent C. D. Paige Company, Inc., trading and doing business as Premium Budget Plan, 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 680 Warren Ave., East Providence, R. Respondent Kenneth E. Norrs 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 tbe same as that of the corporate respondent.

P AI!. 2. Respondents are and have been, engaged in the offering for sale and sale of insurance to the public at retail. PAR 8. In the ordinary course and conduct of their business as aforesaid, respondents offer to extend consumer credit and 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 ordinar course of business as aforesaid, and in connection with their financing of insurance premiums which are credit es as credit sale" is defined in Regulation Z, have caused, and are causing, their customers to enter into contracts for the purchase of insurance, by executing a binding combination promissory note and disclosure statement, hereafter referred to as the "statement." Respondents provide these customers with no consumer credit cost disclosures other than on tbe statement. By and through the use of the statement, respondents: 1. Failed in some instances to identify the amount or method of computing the amount of any default, delinquency, or similar charge payable in the event of late payments, as required by Section 226.8(b)(4) of Reguation Z.

2. Failed in some instances 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 Reguation Z.

8. 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 par of the finance charge, and the finance charge, and to describe tbe sum as the "deferred payment price " as required by Section 226.8(c)(8)(ii) of Reguation Z.

4. Failed in some instances to disclose the method of computing any 5B9- 799 0 - 76 - 61 1050 EDERAL TRADE COMMISSION ImCISIONS Decision and Order 85 F.T, unearned portion of the finance charge in the event of prepayment of the obligation as required by Section 226.8(b)(7) of Regulation Z. '5. Provide additional information which misleads or confuses the customer or obscures or detracts 'attention from the information required to be disclosed by Reguation Z, in violation of 226.6(c) of Regulation Z.

6. Failed to preserve evidence of compliance with Regulation Z for a period of not less than two years after the date each disclosure required to be made as required by Section 226.6(i) of Hegulation Z. PAR. 5. Pursuant to Section 1O 1(q) of the Truth in Lending Act respondents' aforesaid failures to comply with the provisions of Hegulation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have thereby violated the Fedi'ral 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 furnshed 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 respgndents with violation of the Federal Trade Commission Act and the implementing reguation promulgated thereunder and violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission baving 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 signng of said agreement is for settement purposes only and does not constitute an admission by respondents that the law bas been violated as alleged in such complaint and waivers and other provisions as reqwred 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 conformity with the procedure prescribed in Section 2.84 (b) of its rules, the Commission hereby issues its complaint, makes the following jursdictional findings, and enters the following order:

I. Respondent C. D. Paige Company, Inc., trading and doing 1018 Decision and Order business as Premium Budget Plan, is a corporation organzed, existing and doing business under and by virtue of the laws of the State of Rhode Island and Providence Plantations. with its offce and principal place of business located at fJiO Warren Ave., East Providence, R. L Respondent Kenneth E. Norrs is an officer of said corporation. He forrulates;,directs and controls the policies, acts and practices of said corporation, and his principal offce and place of business is located at the above stated address.

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 C. D. Paige Company, Inc., a corporation, trading and doing business as Premium Budget Plan or under any other name or names, its successors and assigns, and its offcers, and Kenneth E. Norrs, 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 CFR 226) of the Trth in Lending Act (Pub. L. 90-821, 15 D. C. 9 1601 et seq. do forthwith cease and desist from:

1. Failing to identify the amount or method of computing the amount, of any default, delinquency, or similar charge payable in the event of late payments, as required by Section 226.8(b)(4) of Reguation 2- 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 Reguation Z.

8. 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.

4. Failing to identify the method of computing any unearned portion of the finance charge in the event of prepayment of the obligations as required by Section 226.8 (b)(7) of Reguation Z. 5. Stating, utilizing or placing any additional information in conjunction with the disclosures required to be made by Regulation Z which information misleads, confuses, contraicts, obscures or detracts /.

Decision and Order H5 F.T. attention from disclosure of information requicd to be disclosed Regulation Z, in violation of Section 226.6(c) of Regulation Z. 6. Failing in any consumer credit transaction to preserve evidence of compliance for a period of not less that two year as required by Section 226.6(i) of Regulation Z.

It is further ordered Thatrespondents 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 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 Commssion at least thirty (aD) days prior to any proposed change in the corporate respondent, such as dissolution, assignent, or sale, resulting in the emergence of a successor corpration, the creation or g.issolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of this 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 affiiation with a new business or employment. Such notice shall include respondent's curent 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 orred That the respondents herein shall within sixty (60) days after servce upon them of this order, fie with the Commission a report, in wrting, setting forth in detail the manner and form in which they have complied with this order.