Bedding Manufacturing And Wholesale Distributing Industry
16 CFR Part 195 · Trade practice rules · in the Code of Federal Regulations 1959-1978 (13 annual editions)
Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.
Latest edition: Library of Congress, 1978 CFR · Earliest edition: 1959 CFR
Text (1978 edition, OCR)
Appendix rebate, credit, credit balance, gift, dividend, participation in or share in profits or other- wise, would be prohibited under the decree. Sincerely yours, H. G. Morison, Assistant Attorney General By Wuuis L. HorcHxiss, Chief, Midwest Office Antitrust Division. (Text OF DEPARTMENT'S SEPTEMBER 24, 1951, LETTER PERTAINING TO INVESTMENT BY Doc- TORS IN CORPORATIONS ENGAGED IN D1s- PENSING) s s s s s Your second inquiry concerns the applica- bility of the Judgments to the investment by doctors in corporations engaged in dis- pensing. The situation which you describe may be summarized as foliows: Four doctors and a layman form a corpo- ration which is to engage in optical dispens- ing. Each of these persons pays $2,000 for 20% of the stock. The doctors direct their patients to the company without disclosing their ownership interest therein. Each doctor and the layman receives dividends proportionate to the amount of stock held by each, without regard to the number of referrals. The doctor-stock-helders ‘“‘have no connection whatsoever with the prices It is not our general practice to give our construction of a consent judgment except with respect to the facts of specific and identlfied cases involving parties to the judgment. However, it is our view that the “stock investment” plan cutlined in the pre- ceding paragraph would be in violation of the Optical Rebating Judgments. Sincerely yours, H. G. Morison, Assistunt Attorney General (Text OF DEPARTMENT'S SEPTEMBER 10, 1951, LETTER ON CHARGE AND SEND PLANS) Since receiving your letter requesting an opinion on the question whether the final judgment in this case applies to the type of “charge and send” plan you describe, we have had a number of inquiries relating to variations of the same plan asking whether such plans are permissible under the final judgments entered in the optical rebating cases. These inquiries have provided us with considerable information on the operation and effect of the various plans. The basic “charge and send” plan consists of the following procedure: (a) the doctor makes a refracticn for which he charges the patient a professional fee, writes a prescription, and sends the pa- tent to a designated optical bouse to have it illed; (b) the optical house makes the necessary measurements, displays the frames and 72 Title 16—Commercial Practices mountings from which the patient makes his seiection, quotes the patient the con- sumer price for the finished glasses, grinds the lenses to the prescription and mounts them; (c) the patient later returns to the optical house to have the glasses fitted and adjust- ed, and the optical house then sends the glasses to the doctor rather than turning them over to the patient; (d) the patient returns to the doctor who turns the glasses over to the patient and coi- lects the consumer price for them, remits to the optical house the wholesale price plus the fitting fee, and retains for himself the difference between that amount and the consumer price. You have described a variant whereby the doctor would keep a case of sample frames in his professional office from which tbe pa- tient would make his selection, with the doctor then quoting to the patient tbe con- sumer price. It is our opinion that the basic “charge and send” plan is prohibited under the opti- cal rebating judgments. The same is true as to the variations which you describe, and those variations similar thereto, such as the “C.O.D. charge and send.” Each of these procedures constitutes a plan, arrangement, or scheme whereby the doctor obtains a fi- nancial return arising out of or connected with dispensing to his patient, with the doctor performing no real function in the dispensing procedure other than coliecting the consumer price. The procedures accom- plish by indirection, and by a complex and artificial procedure, what was done directly and simply under the oid rebate system. The procedures therefore come under the prohibition cf the final judgments in this and the related optical rebating cases. Sineerely yours, H. G. Morison, Assistant Attorney General By Wuuis L. Horcux1ss, Chief, Midwest Office Antitrust Division. PART 195—BEDDING MANUFACTUR- ING AND WHOLESALE DISTRIBUT- ING INDUSTRY Sec. 195.0 Definition; bedding preducts. Group I 195.1 Decepticn as to used materials and Parts. 195.2 Other deception through misrepre- sentation or cencealment. 195.3 Misuse of the terms “feit,” “felting,” and “felted.” 195.4 Misuse of the terms “latex,” “foam rubber,” “latex foam rubber,”’ etc. Chopter !—Foderal Trade Commission Sec. 195.5 Misuse of terms “Rx,” “posture,” “posturized,” “posturite,” “custom built,” “orthopedic,” “germproof,” and “waterproof.” . 195.6 Deceptive pricing. 195.7 Guarantees, warranties, etc. 195.8 Deception through failure to differ- entiate between wholesale and retail transactions. 195.9 Misuse of the word “free.” 195.10 False invoicing. 195.11 Commercial bribery. 195.12 Defamation of competitors or dis- paragement of their products. 195.13 Use of iottery schemes. 195.14 Misrepresentation as to character of business. 195.15 Prohibited discrimination. 195.16 Discriminatory returns. 195.17 Combination or coereion to fix prices, suppress competition, or restrain trade. 195.18 Imitation or simulation of trade- marks, trade names, etc. 195.19 Aiding or abetting use of unfair trade practices. 195.20 Push money. Grovp II 195.101 Products to be manufactured, re- paired, renovated, and sold under sani- tary conditions. COMMITTEE ON TRADE PRACTICES 195.201 Industry committee. AuvrTuoriry: Secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45, unless otherwise noted. Source: 15 FR 7705, Nov. 14, 1950, unless otherwise noted. § 195.0 Definition; beddiug products. As used in this part the term “bed- ding products” shall embrace mat- tresses of all kinds (including baby crib mattresses), bed pads, bedsprings, box springs, metal beds, metal cots, studio couches, sofa beds, and similar sleeping equipment. Group I § 195.1 Deception as to used materials and parts. (a) It is an unfair trade practice to manufacture for sale, sell, offer for sale, advertise, or otherwise represent, directly or indirectly, any bedding product as being new when such prod- uct is not in fact new and is not com- posed wholly of unused materials and parts. § 195.2 (b) In the marketing of bedding products containing, in whole or in part, second-hand materials or parts, it is an unfair trade practice to fail or refuse to make fuli and nondeceptive disclosure, by tag or label attached to the products and in all advertising and trade promotional literature, of the fact that such products are not new but consist, in whole or in part, of second-hand materials or parts, such failure or refusal to disclose having the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consum- ing public. (c) Nothing in this section shail be construed as permitting the sale or distribution of bedding products which contain any unsanitary material. $195.2 Other deception through misrepre- sentation or concealment. (a) It is an unfair trade practice for any industry member to sell, offer for sale, or distribute any mattress or other bedding product, or to promote the sale or distribution thereof, by any method, or under any circumstance, or condition, which has the capacity and tendency or effect of misleading or de- ceiving purchasers, prospective pur- chasers, or the cousuming public as to the material content, composition, construction, manufacture, design, utility, durability, resilience, sag resis- tance, or health or therapeutic proper- ties, of any mattress or other bedding product, or which is false, misleading, or deceptive in any other material re- spect. (b) The provisions of this section shail apply to advertising representa- tions, labeling, or sehing promotions which are misleading or deceptive te the purchasing or consuming publlc by reason of the concealment or nondis- closure of a material fact, as well as to representations, advertisements, or sales promotional methods which are false, misleading, or deceptive for any other reason. (c) The inhibitions of this section shail apply specifically to the decep- tive concealment or nondisclosure of the kind or kinds of materials used in the filling and cover of mattresses or other bedding products. 73 § 195.3 (d) Nothing in this section shall be construed as relieving any member of the industry of the necessity of com- plying with other applicable provisions of laws or regulations relating to mat- tresses or other bedding products, in- cluding fiber content disclosure or identification. §195.3 Misuse of the terms “felt,” “felt- ing,” and “felted.” It is an unfair trade practice to use the term “felt,” “felting,” or “felted” as descriptive of the filling of a mat- tress or other bedding product unless such filling is a compact layer of fibers which have been specially processed and interlaced to form a mat of sub- stantially uniform thickness suitable for use as a filling for a mattress or other bedding product: Provided, That when the filling is of other than cotton or wool fibers, the term shall be immediately accompanied by the fiber identification (as, for example, “felted kapok,” “sisal felting,” etc.). § 195.4 Misuse of the terms “latex,” “foam rubber,” “latex foam rubber,” ete. (a) It is an unfair trade practice to use the term “latex,” “foam rubber,” - “latex foam rubber,” or any term of similar import, as descriptive of a bed- ding product or of any filling thereof, under any circumstance or condition having the capacity and tendency or effect of misleading or deceiving pur- chasers, prospective purchasers, or the consuming public. (b) Under paragraph (a) of this sec- tion, the terms “latex,” “foam rubber,” “latex foam rubber,” or other terms of similar import, shall not be used to describe a bedding product unless the filling material thereof is of latex which has been foamed and molded into one homogeneous pad: Provided, however, That when the fill- ing of any bedding product is in part a homogencous layer of latex which is of substantial thickness, such terms may be used as descriptive thereof if in conjunction therewith nondeceptive disclosure is made of the fact that only a part of such filling consists of latex: And provided further, That when the filling is composed, in whole or in part, of latex which has been shredded, flaked, or ground, full and Titie 16—Commerciai Practices nondeceptive disclosure is made of such fact, irrespective of whether the pieces or shreds are in loose form or are held together by glue or other ad- hesive agent. §195.5 Misuse of terms “Rx,” “posture,” “posturized,” “ ite,” “custom built,” “orthopedic,” “germproof,” and “waterproof.” In the sale, offering for sale, or dis- tribution of bedding products, it is an unfair trade practice: (a) To use the term “Rx,” or any term of similar import, as descriptive of any bedding product which has not been specially designed and construct- ed to meet the requirements of a pre- scription by a member of the medical profession for the use of a particular individual; (b) To use the term “posture,” “pos- turized,” or “‘posturite,”’ or any term of similar import, as descriptive of any bedding product which has not been specially designed and constructed to afford correct posture during sleep, or which, although so designed and con- structed for such purpose, is not in fact capable of affording correct pos- ture during sleep, or which is not capa- ble of preventing or correcting, or of contributing materially to the preven- tion or correction of, posture defects; (c) To use the term “custom built,” or any term of similar import, as de- scriptive of any bedding product which has not in fact been made in accor- dance with specifications furnished prior to manufacture by the individual purchaser and user of such product; (d) To use the term “orthopedic,” or any term of similar import, as descrip- tive of any bedding product unless such product has been specially de- signed and constructed so as to pre- vent, correct, or afford substantial relief with respect to a specific body deformity or deformities and accords with recommendations of orthopedic authorities respecting design and con- struction for such deformity or defor- mities: Provided, That the term shall in all cases be accompanied by specifi- cation of the kind or kinds of body de- formities for which the product has been so designed and constructed; (e) To use the term “germproof,” or any term of similar import, as descrip- 74 Chapter I—Federal Trade Commissien tive of any bedding product, unless such product is, and will remain throughout its expected life, entirely free of germs: Provided, That nothing in this section shall be construed as prohibiting a representation that a bedding product is sterile if the prod- uct at the time of consumer purchase is completely free of living germs and is packaged in such manner as to assure maintenance of its sterile condi- tion untli after delivery of the product to the ultimate consumer-purchaser: And provided further, That the repre- sentation is not supplemented or made in any manner which implies that the sterile condition will continue after re- moval of the product from its packag- ing and regardiess of its use and expo- sure; (f) To use the term “waterproof,” or any term of similar import, as descrip- tive of any bedding product the outer covering of which is not such as to be impervious to the entry of water or moisture throughout the life of such bedding product; or (g) To cause any bedding product to be represented, directly or by implica- tion, as being a product which is used in any hospital or clinic or is recom- mended by members of the medical profession or by a medical organiza- tion when such is not the fact, or as having been designed or made so as to afford special health, orthopedic, or therapeutic values, when such is not the fact. §195.6 Deceptive pricing. (a) It is an unfair trade practice for any member of the industry to repre- sent, in advertising or otherwise, that the price of any industry product has been reduced from what is in fact a fictitious price, or that such price is a reduced or a special price when it is in fact the regular sehing price of such product, or that the regular price thereof is higher when such is not the fact, or otherwise to falsely or decep- tively represent the past or current price of an industry product. (bo) It is an unfair trade practice for any member of the industry, directiy or indirectly, to use or to supply to dealers, or to ald or assist in the use of, price tags, labeis, or similar devices which are false or fictitious, or which 15 § 195.9 such member has reason to believe are intended to be used or will be used by dealers or salesmen for the purpose of misleading or deceiving the purchas- ing or consuming public in regard to price, or in any other material respect. (c) It is an unfair trade practice for any member of the industry to falsely represent that the price of any bed- ding product is a “wholesale price’’ or a “factory price.” § 195.7 Guarantees, warranties, etc. (a) It is an unfair trade practice to use, or cause to be used, any guarantee or warranty which is false, misleading, deceptive, or unfair to the purchasing or consuming public, whether in re- spect to the quallty, construction, ser- viceability, wearing quallty, method of manufacture, or in any other respect. (b) The inhibitions in paragraph (a) of this section are to be considered as applicable with respect to any guaran- tee or warranty in which the terms and conditions relating to the obliga- tion of the guarantor or warrantor are deceptively minimized or stated, or in which the obligations of the guarantor or warrantor are impractical of fulfill- ment; and as also applicable to the use of any guarantee or warranty in re- spect of which the guarantor or war- rantor fails or refuses to scrupulously observe his obligations thereunder. (c) It is also an unfair trade practice to represent any bedding product as being “guaranteed” unless the nature and extent of the undertaking, and the identity of the guarantor are con- jJunctively disclosed. § 195.8 Deception throngh failure to dif- ferentiate between wholesale and retail transactions. Where bedding products are sold at wholesale and at retail in the same es- tablishment of a member of the indus- try, the commingling of the two types of business in such a manner as to have the capacity and tendency or effect of misleading or deceiving pur- chasers or prospective purchasers is an unfair trade practice. § 195.9 Misuse of word “free.” Use of the word “free,” or words of similar import, when employed to de- seribe any product which is not in § 195.10 truth and in fact a gift or gratuity, or which is not given to the recipient thereof without requiring the pur- chase of other merchandise, or requir- ing the performance of some service inuring, directly or indirectly, to the benefit of the industry member using such term, is an unfair trade practice. § 195.10 False invoicing. Withholding from or inserting in in- voices or sales tickets any statements or information by reason of which omission or insertion a false record is made, wholly or in part, of the trans- actions represented on the face of such invoices or sales tickets, with the effect of thereby misleading or deceiv- ing purchasers or prospective purchas- ers, is an unfair trade practice. § 195.11 Commercial bribery. It is an unfair trade practice for a member of the industry, directly or in- directly, to give, or offer to give, or permit or cause to be given, money, or anything of value to agents, employ- ees, or representatives of customers or prospective customers, or to agents, employees, or representatives of com- petitors’ customers or prospective cus- tomers, without the knowledge of their employers or principals, as an in- ducement to influence their employers or principals to purchase or contract to purchase bedding products manu- factured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors. § 195.12 Defamation of competitors or dis- paragement of their products. The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform con- tracts, questionabie credit standing, or by other false representations, or the false disparagement of the products of competitors in any respect, or of their business methods, sehing prices, values, credit terms, pollcies, or ser- vices, is an unfair trade practice. Title 16—Commerclal Practices § 195.13 Use of lottery schemes. The offering or giving of prizes, pre- miums, or gifts in connection with the sale of industry products, or as an in- ducement thereto, by any scheme which invoives iottery or game of chance, is an unfair trade practice. § 195.14 Misrepresentation as to character of business. It is an unfair trade practice for any member of the industry, in the course of or in connection with the distribu- tion or sale of bedding products, to misrepresent the character, extent, or type of his business. § 195.15 Prohibited discrimination ' (a) Prohibited discriminatory prices, rebates, refunds, discounts, credits, etc., which effect unlawful price dis- crimination. It is an unfair trade prac- tice for any member of the industry engaged in commerce, in the course of such commerce, to grant or allow, se- cretly or openly, directly or indirectly, any rebate, refund, discount, credit, or other form of price differential, where such rebate, refund, discount, credit, or other form of price differential, ef- fects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the effect thereof may be substantially to lessen competition or tond to create a mo- nopoly in any line of commeree, or to injure, destroy, or prevent competition with any person who either grants or knowingly recoives the benefit of such discrimination, or with customers of either of them: Provided, however: (1) That the goods involved in any such transaction are sold for use, con- sumption, or resale within any place under the jurisdiction of the United States; (2) That nothing contained in this paragraph shall prevent differentials which make only due allowance for differences in the cost of manufacture, 1As used in this section, the word ‘‘com- merce” means trade or commerce among the several] States and Territories, including the District of Columbia, in accordance with the full scope of ‘the definition of such term found in section 1 of the Clayton Act (38 Stat. 739; 15 USCA, sec. 12). 76 Chapter I—Federal Trade Commissian sale, or delivery resulting from the dif- fering methods or quantities in which such commodities are to such purchas- ers sold or delivered; (3) That nothing contained in this paragraph shall prevent persons en- gaged in selling goods, wares, or mer- chandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade; (4) That nothing contained in this paragraph shall prevent price changes from time to time where made in re- sponse to changing conditions affect- ing the market for or the marketabil- ity of the goods concerned, such as but not limited to obsoiescence of seasonal goods, distress sales under court pro- cess, or sales in good falth in discon- tinuance of business in the goods con- cerned. (b) Prohibited brokerage and com- missions. It is an unfair trade practico for any member of the industry en- gaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as @ commission, brokerage, or other compensation, or any allowance or dis- count in lieu thereof, except for ser- vices rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect con- trol, of any party to such transaction other than the person by whom such compensation is so granted or pald. (c) Prohibited advertising or promo- tional allowances, etc. It is an unfair trade practice for any member of the industry engaged in commerce to pay or contract for the payment of adver- tlsing or promotional allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connec- tion with the processing, handling, sale, or offering for sale of any prod- ucts or commodities manufactured, sold, or offered for sale by such member, uniess such payment or con- § 195.16 sideration is available on proportional- iy equal terms to all other customers competing in the distribution of such products or commodities. (ad) Prohibited discriminatory ser- vices or facilities. It is an unfair trade practice for any member of the indus- try engaged in commerce to discrimi- nate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contribut- ing to the furnislling of, any services or facilities connected with the pro- cessing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all com- peting purchasers on proportionally equal terms. (e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the provi- sions of paragraphs (a) to (e) of this section. (f) Exemptions. The inhibitions of this section shall not apply to pur- chases of their supplies for their own use by sehools, coileges, universities, public libraries, churches, hospitals, and charitable institutions not operat- ed for profit. (g) Purchases by U. S. Government; applicability af Robinson-Patman Antidiscrimination Act to same. In an opinion submitted to the Secretary of War under date of December 28, 1936, the U. S. Attorney General advised that the Robinson-Patman Antidis- crimination Act “is not appilcable to Government contracts for supplies.” (38 Opinions Attorney General 539.) $195.16 Discriminatory returns. It is an unfair trade practice for any member of the industry engaged in commerce ' to discriminate in favor of one customer-purchaser against an- other customer-purchaser of bedding products, bought from such member of the industry for resale, by contract- ing to furnish, or furnishing in connec- tion therewith, upon terms not accord- ed to all competing customer-purchas- ers on proprotionately equal terms, See footnote to § 195.15. 717 § 195.17 the service or facility whereby such fa- vored purchaser is accorded the privi- lege of returning bedding products so purchased and receiving therefor credit or refund of purchase price: Provided, however, that nothing in this part shall be construed as prohib- iting the return of merchandise by purchaser, for credit or refund of pur- chase price, when and because such merchandise has not been properly tagged, labeled, or marked by the seller in accordance with the require- ments of this part, or has been other- wise falsely or deceptively tagged, la- beled, or represented, or when and be- cause such merchandise is defective in material, workmanship, or in any other respect is contrary to guarantee, warranty, or purchase contract. $195.17 Combination or coercion to fix prices, suppress competition, or re- strain trade. It is an unfair trade practice for a member of the industry: (a) To use, directly or indirectly, any form of threat, intimidation, or coer- cion against any member of the indus- try or other person to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade; or (b) To enter into or take part in, di- rectly or indirectly, any agreement, understanding, combination, conspir- acy, or concerted action with one or more members of the industry, or with one or more persons, to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade. §195.18 Imitation or simulation of trade- marks, trade names, etc. The imitation or simulation of the trade-marks, trade names, brands, or iabeis of competitors, with the capac- ity and tendency or effect of mislead- ing or deceiving purchasers, prospec- tlve purchasers, or the consuming public, is an unfair trade practice. § 195.19 Aiding or abetting use of unfair trade practices. . It is an unfair trade practice for any person, firm, or corporation to aid, abet, coerce, or induce another, direct- ly or indirectly, to use or promote the Title 16—Commercial Practices use of any unfair trade practice speci- fied in §§ 195.1 to 195.18 of this part. $195.20 Push money. It is an unfair trade practice for any industry member to pay or contract to pay anything of value to a salesperson employed by a customer of the indus- try member, as compensation for, or as an inducement to obtain, special or greater effort or service on the part of the salesperson in promoting the resale of products supplled by the in- dustry member to the-customer: (a) When the agreement or under- standing under which the payment or Payments are made or are to be made is without the knowledge and consent of the salesperson’s employer; or (b) When the terms and conditions of the agreement or understanding are such that any benefit to the salesper- son or customer is dependent on lot- tery or chance; or (c) When any provislon of the agree- ment or understanding requires or contemplates practices or a course of conduct unduly and intentionally hampering sales of products of com- petitors of an industry member; or (d) When, because of the terms and conditions of the understanding or agreement, including its duratlon, or the attendant circumstances, the effect may be to substantlally lessen competition or tend to create a mo- nopoly; or (e) When similar payments are not accorded to salespersons of competing customers on proportionally equal terms in compliance with sectlon 2 (d) and (e) of the Clayton Act, as amend- ed. Nore: Payments made by an industry member to a salesperson of a customer under any agreement or understanding that all or any part of such payments is to be transferred by the salesperson to the cus- tomer, or is to result in a corresponding de- crease in the salesperson’s salary, are not to be considered within the purview of this sec- tion 20, but are to be considered as subject to the requirements and provisions of sec- tion 2(a) of the Clayton Act, as amended. (20 FR 332, Jan. 14, 1955] 78 Chapter |—Federal Trade Commissien Grovrp II § 195.101 Products to be manufactured, re- paired, renovated, and sold under sani- tary conditions. The industry condemns the practice of manufacturing, repairing, renovat- ing, or selling bedding products under unsanitary conditions. COMMITTEE ON TRADE PRACTICES § 195.201 Industry committee. The provisions of §16.1: of this chapter shall be applicable to an in- dustry committee established under this part. (21 FR 1174, Feb. 21, 1956] PART 197—RELATING TO THE SALE AND FINANCING OF MOTOR VEHI- CLES Grovr I Sec. 197.1 Misrepresentation as to insurance coverage or rates, financing costs, etc. 197.2 Furnishing the purchaser with itcm- ization of his costs in the installment sale of motor vehicles. 197.3 Installment sales contract containing blank spaces to be filled in aftcr its ex- ecution. 197.4 False, misleading, or deceptive use of rate charts in connection with the in- stallment sale and financing of motor vehicles. 197.5 Requiring the placing of insurance by the seller or financing institution as a condition to the sale or financing of a motor vehicle. AvutTnorriry: Secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45, unless otherwise noted. Source: 16 FR 1059, Feb. 6, 1951, unless otherwise noted. Group I § 197.1 Misrepresentation as to msurance coverage or rates, financing costs, etc. It is an unfair trade practice for any selier or financing institution, acting individuaily or in agreement, combina- tion, conspiracy, or coliusion with one another, to make any false, mislead- ing, or deceptive statements or repre- sentations concerning insurance cover- 116CFR 16.1 was deleted at 36 FR 3116, Feb. 18, 1971. § 197.2 age or rates, plans respecting methods of financing, or financing costs or rates, in connection with the sale at retail of motor vehicles on installment or deferred payment contracts. §197.2 Furnishing the purchaser with itemization of his costs In the install- ment sale of motor vehicles. (a) In the installment sale of motor vehicles it is an unfair trade practice for the seller to fail, before the con- summation of the sale, to furnish the buyer an itemization in writing signed by the seller separately disclosing to the purchaser the finance charge, in- surance costs, and other charges which are pald or to be paid by the purchaser, such failure to separately disclose such items having the capac- ity and tendency or effect of deceiving the purchaser as to the nature of his costs in the transaction or rendering competition with respect to the cost of good will, and every effort should be made by the disputants to compose their differences. (b) The seiler shall be deemed to have fully complled with the require- ments of this section when he has fur- nished the purchaser, before consum- mation of the saie, an itemization in writing which clearly discloses: (1) The delivered price of the motor vehicle, including accessories or extras, if any; and (2) The amounts to be credited as down payment and trade-in, if any; and (3) The time baiance owed by the buyer to seller, the amount of each in- stallment payment to be made by the buyer, and the number of such instail- ment payments, and the due dates thereof; and (4) The cost of insurance, the cover- age provided, and the party or parties to whom the insurance is payable; and (5) The finance charge; and (6) Other charges making up the total consideration paid or to be pald by the purchaser, included in the time balance, the amounts and nature of each to be separately stated; or when all sald required information is clearly set forth in the installment sales contract, chattel mortgage, or other instrument evidencing the pur- 79