Cranson Cars, Inc

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In the Matrer or CRANSON CARS, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE TRUTH IN LENDING AND THE FEDERAL TRADE COMMISSION ACTS Docket C-2281. Complaint, June 7, 1972—Decision, June 7, 1972 Consent order requiring a Pompano Beach, Florida, retail seller and distributor of used cars to cease violating the Truth in Lending Act by failing to disclose to customers the annual percentage rate, the total number of paryments, the deferred payment price, the amount financed, and other disclosures required by Regulation Z of the said Act. ComMPLAINT Pursuant to the provisions of the Truth in Lending Act and the implementing regulation promulgated thereunder, and the Federal Trade Commission Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Cranson Cars, Inc., a corporation, and Michael J. Cranson, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and implementing 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:

ParacrapuH 1. Respondent Cranson Cars, Inc., is a corporation organized, existing and doing business under and by virtue of the Jaws of the State of Florida, with its principal office and place of business located at 1030 South Federal Highway, Pompano Beach, Florida.

Respondent Michael J. Cranson is an officer of the corporate respondent. He formulates, directs and controls the policy, acts and CRANSON CARS, INC., ET AL. 937 936 Complaint practices of the corporation, 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 and retail sale and distribution of used cars to the public. Par. 3. In the ordinary course of their business as aforesaid, respondents regularly extend 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 Board.

Par. 4. Subsequent to July 1, 1969, respondents, in the ordinary course of business as aforesaid, and in connection with credit sales, as “credit sale” is defined in Regulation Z, have caused and are causing customers to execute a binding Purchase Agreement, hereinafter referred to as the “Agreement.”

Respondents have caused and are causing certain customers to also sign blank Retail Installment Contracts, hereinafter referred to as “installment contract,” thereby failing to furnish these customers with any additional consumer credit cost disclosures. Respondents do not provide any customers with any other consumer credit cost clisclosures.

By and through the use of the agreement, respondents: 1. Fail to use the term “cash price” to describe the price at which respondents offer, in the regular course of business, to sell for cash the property which is the subject of the credit sale, as required by Section 226.8(c) (1) of Regulation Z.

2, Fail 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. 3. Fail 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, Fail to disclose the sum of the “cash downpayment” and the “trade-in,” and to describe that sum as the “total downpayment,” as required by Section 226.8(c) (2) of Regulation Z. 5. 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. 6. Fail to use the term “amount financed” to describe the amount of credit extended, as required by Section 226.8(c)(7) of Regulation Z.

Decision and Order &@ EVT.C.

7. Fail to disclose 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, 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 “annual percentage rate” determined in accordance with Section 226.5 of Regulation Z, as required by Section 226.8 (b) (2) of Regulation Z.

9. Fail 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. 10. Retain a security interest in property in connection with the credit sale and fail to describe the type of that security interest, as required by Section 226.8(b) (5) of Regulation Z. Par. 5. In the ordinary course of their business as aforesaid, respondents cause to be published advertisements of their goods and services, as “advertisement” is defined in Regulation Z. These advertisements aid, promote or assist directly or indirectly extensions of consumer credit in connection with the sale of these goods and services. By and through the use of the advertisements, respondents state the amount of the downpayment required and the amount of monthly installment payments which can be arranged in connection with a consumer credit transaction, without also stating all of the following items, in terminology prescribed under Section 226.8 of Regulation Z as required by Section 226.10(d) (2) thereof: 1. The cash price;

2. The amount of the downpayment required or that no downpayment is required, as applicable;

3. The number, amount and due dates or period of payments scheduled to repay the indebtedness if the credit is extended: 4. The amount of the finance charge expressed as an annual percentage rate; and 5. The deferred payment price.

Par. 6. Pursuant to Section 103(q) of the Truth in Lending Act, respondents’ aforesaid failures to comply with the provisions of Regulation Z constitute violations of that Act and, pursuant to Section 108 thereof, respondents have 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 respondents named in the caption hereof, and the respondents having been furnished thereafter with CRANSON CARS, INC., ET AL. §39 936 Decision and Order a copy of a draft of complaint which the Atlanta Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Truth in Lending Act and the implementing regulation promulgated thereunder, and the Federal Trade Commission Act; 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 aforesaid draft of complaint, 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 thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Acts, 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 (30) days, now in further conformity with the procedure prescribed in Section 2.84(b) of the rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: 1. Respondent Cranson Cars, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Florida, with its office and principal place of business located at 1030 South Federal Highway, Pompano Beach, Florida. Respondent Michael J. Cranson is an individual and is a corporate officer of Cranson Cars, Inc. He directs, formulates, and controls the acts and practices of the respondent corporation including the acts and practices under investigation. 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 Cranson Cars, Inc., a corporation, and its officers, and Michael J. Cranson, 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 § 226) of the Truth in Lending Act Decision and Order 80 F.T.C.

(Pub.L. 90-321, 15 U.S.C. 1601 et seqg.), do forthwith cease and desist from :

1. Failing to use the term “cash price” to describe the price at which respondents offer in the regular course of business to sell for cash the property which is the subject of the credit sale, as required by Section 226.8(c) (1) of Regulation Z. 2. Failing to use the term “cash downpayment” to describe the amount of any downpayment in money made in connection with any credit sale, as required by Section 226.8(c)(2) of Regulation Z.

3. Failing to use the term “trade-in” to describe the amount of any downpayment in property in connection with anv credit sale, as required by Section 226.8(c) (2) of Regulation Z. 4, Failing to disclose the sum of the “cash downpayment” and the “trade-in,” and to describe that sum as the “total downpayment,” as required by Section 226.8(c) (2) of Regulation Z. 5. Failing 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)(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 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, and to describe that sum as the “deferred payment price,” as required by Section 226.8(c) (8) (ii) of Regulation Z. 8. Failing to disclose the “annual percentage rate” determined in accordance with Section 226.5 of Regulation Z, as required by Section 226.8 (b) (2) of Regulation Z.

9. 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) (8) of Regulation Z. 10. Failing to describe the type of any security interest in property held, or to be retained in connection with any extension of credit, as required by Section 226.8(b)(5) of Regulation Z.

11. Stating, in any advertisement, the amount of the downpayment required and the amount of monthly installment payments which can be arranged in connection with a consumer credit transaction, without also stating all of the following CRANSON CARS, INC., ET AL. 941 936 Decision and Order items, in terminology prescribed under Section 226.8 of Regulation Z, as required by Section 226.10(d) (2) thereof: (i) The cash price;

(ii) The amount of the downpayment required or that no downpayment is required, as applicable; (iii) The number, amount, and due dates, or period of payments scheduled to repay the indebtedness if the credit is extended ;

(iv) The amount of the finance charge expressed as an annual percentage rate; and (v) The deferred payment price.

12. Failing in any consumer credit transaction or advertising to make all disclosures determined in accordance with Sections 226.4 and 226.5 of Regulation Z at the time and in the manner, form and amount required by Sections 226.6, 226.8, and 226.10 of Regulation Z.

It is furthered ordered, That respondents 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 respondents 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 (80) 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 subsidiaries; or any other change in the corporation which may affect compliance obligations arising out of the order. It is further ordered, That the 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 this order. In toe MatTtTer or