Ridgewood Realty, Inc

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IN THE MATTER OF RIDGEWOOD REALTY, INC., ET AL.

CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Docket C-26.96. Complaint, July, 1.975 - Decision, July, 1.975. Consent order requiring a Golden, Colo., mortgag-e loan broker, among other things to cease violating the Truth in Lending Act by failing 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: Tommie W. Wakefield. For the respondents: Peter A. Robinson Denver, Colo. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and of the Truth in Lending Act and the implementing regulation promulgated thereunder, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Ridgewood Realty, Inc., a corporation, and Mike A. Leprino, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts, and the implementing regulation promulgated under the Truth in Lending Act 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 Ridgewood Realty, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Colorado, with its principal office and place of business located at 14618 W. 6th A ve., Golden, Colo. Respondent Mike A. Leprino is an offcer of corporate respondent. He formulates, directs and controls the acts and practices of the corporate respondent 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 advertising, offering for sale and sale of housing to the general public.

PAR. :3. In the ordinary course and conduct of their business as aforesaid, respondents regularly arrange for the extension of consumer credit or offer to extend or arrange for the extension of such credit, as RIDGEWOOD REALTY, IXC., ET AL. 245 244 Decision and Order arrange for the extension of credit" and "consumer credit" are defined in Section 226.2 of 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 and in connection with credit sales have caused, and are causing, to be published, advertisements, as credit sale" and "advertisement" are defined in Section 226.2 of Regulation Z, which advertisements aid, promote or assist directly or indirectly, the extension of other than open end credit. PAR. 5. Respondents, in certain of the above-mentioned advertisements, have stated and are stating the amount of downpayment (in dollars and as a percentage of the sale price) or that no down payment is required, or the amount of an instalment payment without also stating, as required by Section 226.10(d)(2) of Regulation Z, all the following terms:

(a) the cash price: lthe amount of the loan; (b) the amount of the down payment required or that no downpayment is required, as applicable:

(c) the number, amount and due dates or period of payments scheduled to repay the indebtedness if the credit is extended; and (d) the amount of the finance charge expressed as an annual perce'ltage rate.

PAR. 6. Respondents, in certain of these advertisements, have stated and are stating, the rate of a finance charge, as "finance charge " is defined in Section 226.2 of Regulation Z, and have not expressed said rate as an "annual percentage rate " using the term "annual percentage rate " as "annual percentage rate" is defined in Section 226.2 of Regulation Z, in violation of Section 226.10(d)(l) of Regulation Z. PAR. 7. Respondents, in certain other of these advertisements, have stated and are stating the rate of interest as a simple annual rate in conjunction with the "annual percentage rate " but have printed and are printing the simple annual rate more conspicuously than the annual percentage rate" in violation of Section 226. 10(d)(l)(i) of Regulation Z.

PAR. 8. Pursuant to Section lQ;i(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 t.o Section 108 thereof, respondents have thereby violated the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of 24G FEDERAL TRADE COMMISSION DECISIONS De('ision and Order 86 F. 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 Kansas City 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 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 Act, 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 prescribed in Section 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jUlisdictional findings and enters the following order:

1. Respondent Ridgewood Realty, Inc. is a corporation organized existing and doing business under and by virtue of the laws of the State of Colorado, with its office and principal place of business located at 14618 W. 6th Ave., city of Golden, State of Colorado. Respondent Mike A. Leprino is an officer of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation, and his principal office 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 Ridgewood Realty, Inc., a corporation, its successors and assigns, its officers, and Mike A. Leprino individually and as an officer of said corporation, and respondents agents, representatives, salesmen and employees, directly or through any corporation, subsidiary, division or other device, in connection with any advertisement to aid, promote or assist, directly or indirectly, any ), RIDGF;WQQD HEALTY. INC.. I-T AL. 247 244 Decision and Onlcl' arrangement or extension of consumer credit as "consumer credit" and advertisement" are defined in Regulation Z (12 CFR 9226) of the Truth in Lending Act (Pub. L. 90-321 , 15 U. C. 91601 et seq. forthwith cease and desist from:

1. Representing in any such advertisement, directly or by implication. that no downpayment is required, the amount of the downpayment or the amount of any instalment payment, either in dollars or as a percentage, the dollar amount of any finance charge, the number of instalments or the period of repayment, or that there is no charge for credit, unless all of the following items are clearly and conspicuously stated, in terminology prescribed under Section 226.8 of Regulation Z as required hy Section 226. 10(d)(2) of Regulation Z: (a) the cash price; (the amount of the loan; (b) the amount of the downpayment required or that no downpayment is required, as applicable;

(c) the number, amount and due dates or period of payments scheduled to repay the indebtedness if the credit is extended; and (d) the amount of the finance charge expressed as an annual percentage rate.

2. Stating in any advertisement the rate of a finance charge unless said rate is expressed as an annual percentage rate, using the term annual percentage rate " as "finance charge" and "annual percentage rate " are defined in Section 226.2 and as required by Section 226.l0(d)(1) of Regulation Z.

3. Stating in any advertisement the simple annual rate of interest in conjunction with the "annual percentage rate" unless the "annual percentage rate" is printed as conspicuously as the simple annual rate as required hy Section 226.l0(d)(1)(i) of Regulation Z. 4. Failing, in any advertisement, to make all disclosures as required by Section 226. 10 in the manner prescribed by Sections 226. , 226.8 and 226.10 of Regulation Z.

It is farther ordered That respondents notify the Commission at least thirty (30) days prior to any proposed change in any 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 affilation with a new business or I employment. Such notice shall include respondent s current business address and a statement as to the nature of the business or 217-1840 - 76 - 17 24H FEDERAL TI1ADE COMYlISSION DECISIONS Complaint SG FTC.

employment in which he is engaged as well as a description of his duties and responsibilities.

It ;s jllTther ordered That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. It is jllrther 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.