Royal Motors, Inc.

Volume 73 · 73 F.T.C. 1029

Citation: 73 F.T.C. 1029
Docket: C-1347
Complaint: 1968-06-14
Decision: 1968-06-14
Document type: consent order
Case type: consumer protection
Statutes: FTC Act (section 5)
Industry: automobile retail sales
Outcome: consent order entered
Relief: cease_and_desist; affirmative_disclosure; compliance_reporting
Source: Original volume PDF
Original PDF: This decision as a PDF

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Royal Motors, Inc., 73 F.T.C. 1029 (1968). Consumer Law Library, https://consumerlawlibrary.org/decisions/v073-0072

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Order status: unknown. Sunset may be extended by the latest qualifying federal-court complaint alleging an order violation; complaints, dismissal/appeal outcomes, and respondent-specific extensions are not fully tracked.

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ROYAL MOTORS, INC., ET AL. 1029

Complaint

IN THE MATTER OF

ROYAL MOTORS, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT

Docket C-1847. Complaint, June 14, 1968—Decision, June 14, 1968

Consent order requiring a Washington, D.C., car dealer to cease misrepresenting that its used cars are new and making deceptive financing claims in advertising its automobiles.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Royal Motors, Inc., a corporation, and Raymond J. Anselmo, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said 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 Royal Motors, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Maryland, with its principal office and place of business located at 4100 Georgia Avenue, NW., in the city of Washington, District of Columbia.

Respondent Raymond J. Anselmo is an individual and is an officer of the 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, sale and distribution of new and used automobiles to the public.

PAR. 3. In the course and conduct of their business as aforesaid, respondents now cause, and for some time last past have caused, their said automobiles to be sold to purchasers thereof located in the District of Columbia, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said automobiles in com-

Complaint 73 F.T.C.

merce, as "commerce" is defined in the Federal Trade Commission Act. PAR. 4. In the course and conduct of their aforesaid business, and for the purpose of inducing the purchase of their automobiles, the respondents have made, and are now making, numerous statements and representations in advertisements inserted in newspapers of interstate circulation, typical and illustrative but not all inclusive of which are the following:

Complaint

Washington Post Thursday, Jan. 5, 1967.

Washington Daily News Wednesday, Dec. 28, 1966.

ROYAL RIDES OF 1967 WITH A CARRY-OVER DISPOSAL SALE

OF LEFTOVER '66 PLYMOUTHS CHRYSLERS AT USED CAR PRICES

PLYMOUTH VALIANT V-100 $1560 2-Door Sedan • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • 6 Cylinder Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH BARRACUDA $1960 2-Door Hardtop • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH BELVEDERE I V-8 $1860 2-Door Sedan • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH BELVEDERE II V-8 $1960 2-Door Hardtop • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH BELVEDERE Satellite $1960 2-Door Hardtop • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH BELVEDERE Satellite $1960 4-Door Sedan • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH FURY I $1860 2-Door Sedan • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH FURY II $2260 2-Door Hardtop • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

PLYMOUTH FURY III $2260 4-Door Sedan • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

CHRYSLER NEWPORT $2560 2-Door Hardtop • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

CHRYSLER NEWPORT $2660 4-Door Sedan • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

CHRYSLER $3560 2-Door Hardtop • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

CHRYSLER $4260 4-Door Hardtop • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

CHRYSLER $4260 4-Door Sedan • Radio • Heater • Back-up Lites • Padded Dash • Windshield Washers • Outside Mirror • Special Wheel Covers • Undercoating • Torqueflite Automatic Transmission • V-8 Engine • White Sidewall Tires • Full Vinyl Interior.

WE TRADE! WE HAVE MORE THAN 300 NEW CARS IN STOCK '66 DOWN ROYAL Come Early, Come as You Are.

Take Over Payments.

No Waiting.

No Red Tape.

ROYAL DODGE • PLYMOUTH • CHRYSLER SALES • SERVICE • PARTS ROYAL MOTORS 7900 RICHMOND HWY., ALEXANDRIA, VA.

ROYAL RIDES OF 1967 WITH A CLEARANCE FINAL OFFER!

OF LEFTOVER '66 PLYMOUTHS CHRYSLERS HURRY! HURRY!

'66 DOWN ROYAL Come Early, Come as You Are.

Take Over Payments.

No Waiting.

No Red Tape.

ROYAL DODGE • PLYMOUTH • CHRYSLER SALES • SERVICE • PARTS ROYAL MOTORS 7900 RICHMOND HWY., ALEXANDRIA, VA.

1032 | ROYAL MOTORS, INC., ET AL. | 78 F.T.C. Complaint

Washington Post Thurs. Jan. 5, 1967.

Royal's Annual Inventory Removal Sale!

Imperial CLEARANCE

1966 IMPERIAL CROWN COUPE 2-DOOR FACTORY AIR CONDITIONED. All leather interior, full power, including windows and seat, vinyl roof, radio, whitewall tires. Choice of three: Dark Red, Black or Ivory $4260

40% OFF

1966 IMPERIAL CROWN 4-DR. HARDTOP FACTORY AIR CONDITIONED. All leather interior, full power including windows and seat, radio, whitewall tires and many other extras. Some with vinyl roofs. Choice of six: black, White, Dark Blue and Dark Green. $4260

A completely Factory-New $495 DOWN At the sign of the Chrysler

1966 IMPERIAL LE BARON FACTORY AIR CONDITIONED, plus all imaginable extras. Formal Black with Medium Blue full hide leather interior. $4980

ROYAL AMBLER * PENNA.

DeSoto AUTHORIZED DEALER CHRYSLER MOTORS CORPORATION PLYMOUTH • CHRYSLER IMPERIAL • SIMCA SUNBEAM

1100 OLD YORK AVENUE, ABT. 611 • TU 6-4800

ROYAL MOTORS, INC., ET AL. 1033

1029 Complaint

PAR. 5. By and through the use of the above statements and representations, and others of similar import and meaning but not expressly set out herein, respondents have represented, directly or by implication that:

1. The advertised automobiles are new automobiles left over from the previous model year.

2. The advertised automobiles will be financed on offer of the down payment stated.

PAR. 6. In truth and in fact:

1. Most of the automobiles referred to in the advertisements set out in Paragraph Four hereof, and other advertisements similar thereto but not specifically set forth herein, are not new automobiles left over from the previous model year. They are used automobiles which have been driven a substantial number of miles by reason of their previous sale or lease, by reason of their use as company official cars or as demonstrators, or by reason of their use as driver education automobiles at high schools in the metropolitan Washington, D.C., area. 2. The advertised automobiles were not financed on offer of the down payment stated. Frequently the amount of down payment advertised was insufficient and the customer was required to make up the deficiency or balance between the amount advertised and the amount actually required as down payment.

Therefore, the statements and representations as set forth in Paragraphs Four and Five hereof were and are false, misleading and deceptive.

PAR. 7. In the course and conduct of their aforesaid business, and at all times mentioned herein, respondents have been, and now are, in substantial competition, in commerce, with corporations, firms and individuals in the sale of new and used automobiles of the same general kind and nature as those sold by respondents. PAR. 8. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents' automobiles by reason of said erroneous and mistaken belief.

PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

418-345-72——66

Decision and Order 73 F.T.C.

DECISION AND ORDER

The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; 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 complaint to issue herein, 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's Rules; and

The Commission having considered the agreement and having accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of 30 days, now in further conformity with the procedure prescribed in § 2.34(b) of its Rules, the Commission hereby issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. Respondent Royal Motors, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Maryland, with its office and principal place of business located at 4100 Georgia Avenue, NW., in the city of Washington, District of Columbia.

Respondent Raymond J. Anselmo is an officer of said corporation and his address is the same as that of said corporation.

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 Royal Motors, Inc., a corporation, and its officers, and Raymond J. Anselmo, individually and as an officer of said corporation, and respondents' agents, representatives and employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of auto-

ROYAL MOTORS, INC., ET AL. 1035

1029 Decision and Order

mobiles, or any other products, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing, directly or by implication, that any vehicle is new when it has been used in any manner other than the limited use necessary in moving a new vehicle prior to delivery of such vehicle to the customer. 2. Advertising any used vehicle of the current or the previous model year without clearly and conspicuously disclosing in any and all advertising thereof that the vehicle is used. 3. Offering for sale or selling any vehicle of the current or the previous model year which has been used, without clearly and conspicuously disclosing by decal or sticker attached thereto that the vehicle has been used. 4. Advertising, offering for sale or selling any vehicle of the current or the previous model year which has been used for driver education, as a leased vehicle, as a company official car or as a demonstrator, without clearly and conspicuously disclosing such use in any and all advertising thereof and by decal or sticker conspicuously attached thereto: Provided, however, That in those instances in which vehicles are obtained by respondents and the use to which the vehicles have been put is not known, it shall be a defense in any enforcement proceeding instituted hereunder for respondents to establish that in all such instances they have clearly disclosed the source from which the vehicle was obtained. 5. Misrepresenting, in any manner, the nature or extent of previous use of any vehicle offered for sale. 6. Representing, directly or by implication, a specified down payment amount, unless such amount is equal to or in excess of the minimum amount usually and customarily accepted as the full down payment. 7. Misrepresenting, in any manner, the amount which will be accepted as a down payment. It is further ordered, That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered, That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.

Complaint 73 F.T.C.

IN THE MATTER OF

PUNCH CARD MACHINE TRAINING SERVICE, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT

Docket C-1348. Complaint, June 14, 1968—Decision, June 14, 1968

Consent order requiring two affiliated business machine schools located in Missouri and Tennessee to cease using deceptive offers of employment, exaggerating the demand for its graduates, misrepresenting that enrollments are limited, that lack of a high school diploma is no handicap, and that refunds will be made.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Punch Card Machine Training Service, Inc., a corporation, Punch Card Training of Memphis, Inc., a corporation, and Walter G. Ottman, Bette K. Ottman, Mary A. Vonck and Leona Thelen, individually and as officers of said corporations, hereinafter referred to as respondents, have violated the provisions of said 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 Punch Card Machine Training Service, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Missouri, with its principal place of business located at 318 East 10th Street, Kansas City, Missouri.

Punch Card Training of Memphis, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Tennessee, with its principal place of business located at 627 Adams Street, Memphis, Tennessee.

Respondents Walter G. Ottman, Bette K. Ottman, Mary A. Vonck and Leona Thelen are officers of the corporate respondents. They formulate, direct and control the acts, policies and practices of the corporate respondents, including the acts and practices hereinafter set forth. They each have an address at each of the corporate respondents' principal place of business.

The aforesaid respondents cooperate and act together in carrying out the acts and practices hereinafter set forth.

PAR. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of

← 73 F.T.C. 1026 · 73 F.T.C. 1036 →