Howard Mcmaster Arnold

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In Tue MATTER OF HOWARD McMASTER ARNOLD, porne Business 4s TED ARNOLD USED CARS CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE TRUTH IN LENDING ACTS Docket C-2141. Complaint, Feb. 4, 1972—Decision, Feb. 4, 1972 Consent order requiring an Oakland, Calif., individual seller of used automobiles to cease violating the Truth in Lending Act by failing to use in his installment contracts the terms “cash price,” “trade-in,” “cash downpayment,” TED ARNOLD USED CARS: 133 132 Complaint “unpaid balance of cash price,” “amount financed,” “deferred payment price,” and other terms required by Regulation Z of said Act. Complaint Pursuant to the provisions of the Federal Trade Commission Act, and of the Truth in Lending Act and the regulations promulgated thereunder, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Howard McMaster Arnold,-an individual trading as Ted Arnold Used Cars, hereinafter referred to as respondent, has violated the provisions of said Acts, and of the regulations 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: Paracrapy 1. Respondent Howard McMaster Arnold is an individual, trading as Ted Arnold Used Cars with his office and principal place of business located at 1424 East 14th Street, Oakland, California.

Par. 2. Respondent is now, and for some time last past has been engaged in the offering for sale and sale of used cars to the public at retail. .

Par. 8. In the ordinary course and conduct of his business as aforesaid, respondent regularly extends, and for some time last past has 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, respondent, in the ordinary course and conduct of his business and in connection with credit sales as “credit sale” is defined in Regulation Z, has caused, and is causing, certain of his customers to execute Motor Vehicle Purchase Orders, hereinafter referred to as the “Order” on which the respondent provides certain consumer credit cost information. By and through the use of the order respondent : 1. Fails to render the consumer credit cost disclosures required by Section 226.8 of Regulation Z before consummation of the credit transactions as required by Section 226.8(a) of Regulation Z. 2, Fails to exclude the State of California Department of Motor Vehicles license, registration, and certificate of title transfer fees in computing the “cash price” as required by Section 226.2(1) of Regulation Z.

Decision and Order 80 F.T.C.

3. Fails, m some instances, to use the term “trade-in” to describe the downpayment in property made in connection with the credit sale, as required by Section 226.8(c) (2) of Regulation Z. 4, Fails to use the term “cash downpayment” to describe the downpayment in money made in connection with the credit sale, as required by Section 226.8(c) (2) of Regulation Z. 5. Fails 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. 6. Fails, in some instances, to use the term “amount financed” to describe the amount of credit extended, as required by Section 226.8 (c) (7) of Regulation Z.

7. Fails, in some instances, to disclose the “deferred payment price,” which is the sum of the cash price, all charges which are included in the amount financed but which are not part of the finance charge, and the finance charge, as required by Section 226.8 (c) (8) (11) of Regulation Z.

8. Fails, in some instances. to disclose the “annual percentage rate” in credit transactions where finance charges are imposed, as required by Sections 226.5, 226.6(a) and 226.8(b)(2) of Regulation Z.

9. Fails, in some instances, to disclose the “total of payments,” as required by Section 226.8(b) (3) of Regulation Z. Par. 5. Pursuant to Section 103(q) of the Truth in Lending Act, respondent’s aforesaid failures to comply with the provisions of Regulation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondent thereby violated the Federal Trade Commission Act.

Decision AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the San Francisco Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act, the Truth in Lending Act, and the regulations promulgated under the T ruth in Lending Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the afore- TED ARNOLD USED CARS 135 132 Decision and Order said draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent 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 thereafter considered the matter and having determined that it had reason to believe that. the respondent has 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 thirty (80) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Howard McMaster Arnold. is an individual trading as Ted Arnold Used Cars with his office and principal place of business located at 1424 East 14th Street, Oakland, California. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER It is ordered, That. respondent Howard McMaster Arnold, an individual trading as Ted Arnold Used Cars, or under any other name or names, and respondent’s representatives, agents and employees, directly or through any corporate or other device, in connection with any consumer credit extension as “consumer credit” is defined in Regulation Z (12 CFR $226) of the Truth in Lending Act (Pub.L. 90-321, 15 U.S.C. 1601 e¢ seg.), do forthwith cease and desist from: 1. Failing to render the consumer credit cost disclosures required by Section 226.8 of Regulation Z before consummation of the credit transactions, as required by Section 226.8(a) of Regulation Z.

2, Failing to exclude the State of California Department of Motor Vehicles license, registration, and certificate of title transfer fees in computing the “cash price” as required by Section 226.2(1) of Regulation Z.

3. Failing to use the term “trade-in” to describe the downpayment in property made in connection with the credit sale, as required by Section 226.8(c) (2) of Regulation Z. 4. Failing to use the term “cash downpayment” to describe the downpayment in money made in connection with the credit sale, as required by Section 226.8(c) (2) of Regulation Z. va 7-883—T5 Decision and Order 80 F.T.C.

5. Failing to use the term “unpaid balance of cash price” to describe the difference between the cash price and total downpayment as required by Section 226.8(c) (8) of Regulation Z. 6. Failing to use the term “amount financed” to describe the amount of credit extended as required by Section 226.8(c) (7) of Regulation Z.

7. Failing to disclose the “deferred payment price,” which is the sum of the cash price, all charges which are included 1m the amount financed but which are not part of the finance charge, and the finance charge, as required by Section 226.8 (c) (8) (ii) of Regulation Z.

8. Failing to disclose the “annual percentage rate” in credit transactions where finance charges are imposed, as required by Sections 226.5, 226.6(a), and 226.8(b) (2) of Regulation Z. 9. Failing to disclose the “total of payments,” 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 Sections 226.4 and 226.5 of Regulation Z, in the manner, form and amount required by Sections 226.6, 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 respondent, and other persons 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 the respondent herein shall, within sixty (60) days after service upon him of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which he has complied with this order.