Suncrest Household Furnishings, Inc

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In Toe Marter or SUNCREST HOUSEHOLD FURNISHINGS, INC., ET AL. CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE TRUTH IN LENDING ACTS Docket C—1994. Complaint, Aug. 2, 1971—Decision, Aug. 2, 1971 Consent order requiring a Rochester, N.Y., retail distributor of household furniture and other merchandise to cease violating the Truth in Lending Act by failing to use on its installment contracts the terms “cash downpayment,” “total downpayment,” “unpaid balance of cash price,” “amount financed,” “finance charge,” “anritial percentage rate,” “total of payments,” and other terms required by Regulation Z of said Act. Complaint _ Pursuant to the provisions of the Truth in Lending Act ‘and the implementing regtilation promulgated thereunder, and the Federal 154 Complaint Trade Commission Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Suncrest Household Furnishings, Inc., a corporation, and Gary Harriman, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and regulation, 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:

ParacrarH 1. Respondent Suncrest Household Furnishings, Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business located at 1168 Clinton Avenue, North, Rochester, New York.

Gary Harriman is the president of the corporate respondent. He formulates, directs and controls its policies, acts and practices, including the acts and practices hereinafter set forth. Par. 2. Respondents are now, and for some time last past have been, engaged in the offering for sale, sale and distribution of household furnishings and other merchandise to the public through their retail store located at 1168 Clinton Avenue, North, Rochester, New York. Par. 3. In the ordinary course and conduct of their business as aforesaid, respondents regularly extend, and for some time last past have regularly extended, 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 ordinary course of their business as aforesaid, and in connection with their credit sales, as “credit sale” is defined in the Regulation Z, have caused and are causing customers to execute retail conditional sales contracts, hereinafter referred to as “the contract.” Respondents make no other credit cost disclosures to their customers. By and through the use of the contract, respondents: 1. Fail to use the term “cash downpayment” to describe any downpayment in money, as required by Section 226.8 (c) (2) of Regulation Z.

2. Fail to use the term “total downpayment” to describe the sum of the cash downpayment and the trade-in, as required by Section 226.8 (c) (2).

156 FEDERAL TRADE. COMMISSION DECISIONS Complaint 79 F.T.C.

3. Fail to use the term “unpaid balance of cash price” to describe the difference between the “cash price” and the “total downpayment,” as required by Section 226.8(c) (3) of Regulation Z. 4. Fail to use the term “amount financed” to describe the amount financed, as required by Section 226.8(c) (7) of Regulation Z. 5. Fail to use the term “finance charge” to describe the finance charge, as required by Section 226.8(c) (8) (i) of Regulation Z, in print more prominant than the other prescribed terminology, as required by Section 226.6 (a) of Regulation Z. 6. Fail to disclose the rate of “the finance charge and to state it as an “annual percentage rate,” as required in Section 226.8(b) (2) of Regulation Z, in print more prominent than the other prescribed _terminology, as required by Section 226.6(a) of Regulation Z. 7. Fail to disclose the sum of the cash price, all other charges which are included in the amount financed but which are not part 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.

8. Fail to disclose the “total of payments,” using that term, as required by Section 226.8(b) (3) of Regulation Z. 9. Fail to disclose, prior to consummation of the credit sale, the due dates or periods of payments scheduled to repay the indebtedness, as required by Sections 226.8(a) and 226.8(b) (3) of Regulation Z. Par. 5. Pursuant to Section 103(q) of the Truth in Lending Act, respondents’ aforesaid failures to comply with Regulation Z constitute a violation of that Act and, pursuant to Section 108 thereof, respondents thereby violated the Federal Trade Commission Act. Decision AND ORDER The Commission having heretofore determined to issue its complaint charging respondents named in the caption hereof with violation of the Federal Trade Commission Act, the Truth in Lending Act and the implementing regulation promulgated thereunder, and 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 Respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by 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 154 Decision and Order 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 thirty (30) days, now in further conformity with the procedure prescribed in Section 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 Suncrest Household Furnishings, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business located at 1168 Clinton Avenue, North, Rochester, New York.

Respondent Gary Harriman is an officer of said corporation. He formulates, directs and controls the policies, acts and practices 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 inter est.

ORDER It is ordered, That respondents Suncrest Household Furnishings, Inc., a corporation, and its officers, and Gary Harriman, 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 any extension of consumer credit or any 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 Part 226) of the Truth in Lending Act (Public ‘Law 90-321, 15 USC 1601 et seq. ), do forthwith cease and desist from :

1. Failing to use the term “cash downpayment” to describe any downpayment in money, as required by Section 296. 8(c) (2) of » Regulation Z.

9.. Failing to use the term “total downpayment” to describe the sum of the “cash downpayment”, and the “trade-in,” in any trans- - action in which a'trade-in is accepted as part of the: downpayment, - as required by Section 226.8(c) (2) of Regulation Z. . 8. Failing to use the term “unpaid balance. of cash price” describe the difference between the “cash price” and the “total FEDERAL TRADE. COMMISSION DECISIONS Decision and Order 79 F.T-C.

downpayment,” as required by Section 226.8(c) (3) of Regulation Z.

4, Failing to use the term “amount financed” to describe the amount financed, as required by Section 226.8(c) (7). of Regulation Z.

5. Failing to use the term “finance charge” to describe the finance charge as required by Section 226.8(c) (8) (i) of Regulation Z, in print more prominent than the other prescribed terminology, as required by Section 226.6(a) of Regulation Z. 6. Failing to disclose the rate of the finance charge and to state it as an “annual percentage rate,” as required in Section 226.8(b) (2) of Regulation Z, in print more prominent than the other prescribed terminology, as required by Section 226.6(a) of Regulation Z.

7. Failing to disclose the sum of the cash price, all other charges which are included in the amount financed but which are not part of the finance charge, and the finance charge, using the term “deferred payment price,” as required by Section 226.8 (c) (8) (ii) of Regulation Z.

8. Failing to use the term “total of payments” to describe the sum of the payments scheduled to repay the indebtedness, as required by Section 226.8 (b) (3) of Regulation Z. 9. Failing to disclose the due date of the first payment, or otherwise failing to disclose the number, amount, and due dates or periods of payments scheduled to repay the indebtedness, prior to the consummation of the transaction, as required by Section 226.8 (b) (3) of Regulation Z.

10. Failing, in any consumer credit transaction or advertisement, to make all disclosures determined in accordance with Section 226.4 and Section 226.5 of Regulation Z, in the manner, form and amount required by Sections 226.6, 226.7, 226.8, 226.9, and 226.10 of Regulation Z.

It is further ordered, That respondent 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 respondent secure a signed statement acknowledging receipt of said order from each such person.

It is further ordered, That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of 159 Complaint subsidiaries, or any other, change i in the corporation which may. affect compliance obligations arising out of this order. It is further ordered, That respondents 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 the order to. cease and. desist contained. herein.