Ford Motor Company

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

IN Tile MATIER OF FORD MOTOR COMPANY, ET AL.

MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 9073. Decision, March 1979-Modifyng Order, Feb. 1980 This order reopens and modifies a consent order issued on March 29; 1979, 44 FR 25630, 93 F. C. 402, so that Paragraph II (C) (7) of the order provides for a waiver of customers' surplus rights in the event that a dealership retains a repossessed vehicle for its own use, rather than for resale. This brings the order into conformity with one aspect of an order issued against Francis Ford, Inc. on September 21, 1979 under the same docket number, 44 FR 6241, 94 F. C. 564. ORDER REOPENING AND MODIFYING CONSENT ORDER By petition of November 26 1979, respondents Ford Motor Company and Ford Motor Credit Company (hereafter "Ford respondents") have asked the Commission to modify Paragraph 1I (7) of the consent order entered by the Commission against these respondents on Mareh , 1979, in order to conform with a Jess restrictive provision of the litigated order in this docket entered against respondent Francis Ford Inc. on September 21, 1979. An "Order to Show Cause" as to why the requested change should not be made, dated January 15, 1980, has elicited no objection.

Paragraph VII B. of the consent order provides that if a final order is issued in Dkts. 9073, 9074, or 9075 that imposes Jess restrictive standards in certain enumerated respects than does the consent order the Commission shall reopen the consent order within 120 days of a petition to do so and modify the consent order to conform with the less restrictive provisions contained in the other order. Although the less restrictive order upon which Ford respondents rely for their request has not yet become final, due to the pendency of an appeal, no purpose would be served by delaying modification of the Consent Order until such time as the appeal is resolved, inasmuch as the appeal by Francis Ford is hardly likely to result in imposition of a more restrictive standard than the Commission has imposed. Modification now will expedite achievement of uniform treatment of automobile dealers which is a primary purpose of Paragraph VlI B. Therefore It is ordered That the consent order in this docket be reopened for the limited purpose of effecting the following changes. It is further ordered That Paragraph 1I of the consent order be modified to eliminate the following language: EDERAL TRADE COMMISSION DECISIONS Modifying Order 95 F.

C. The accounting system shall provide that: 7. Dealers are not to obtain waivers of surplus or-redemption rights from repurchas financing customers.

It is further orde-rd That Paragraph II of the consent order be modified to add the following language:

The accounting system shall provide that:

7. Dealers are not to take any action to obtain or to attempt to obtain or bring about a waiver of a customer s right to redeem, except in the precise manner and circumstances contemplated by the applicable state law version of Section 9-5 of the Uniform Commercial Coe. Under Section 9-505 a waiver of a customer s right to a surplus may not be sought unless the dealer intends to retain the collateral for its own use for the immediate future rather than to resell the collateral in the ordinary cour of business. If a waiver is sought, the dealer shall not represent that by proposing the waiver, it proposes to forego its right to a deficiency judgment, unless it intends to sek such a judgment should the waiver not be given. No customer s waiver of rights or failure to object to any secured party s propo'al to retain the repossssed vehicle, unless procured in exact conformity with this subparagraph, shall limit the provisions of the accounting system relating to accounting for and paying any surplus. n.fD MOdifying.. Order