Dirito Motors

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Ts ‘THE ‘Mian’ OF - DIRITO: motors, ET AL CONSENT ORDER, iETC., IN; REGARD TO, 0 THE ALLEGED. VIOLATION. OF. THE, FEDERAL: TRADE, COMMISSION ;AND THE :- TRUTH. IN LENDING -ACTS,, ..,.: - Pp oy _ Docket O-2abe. ‘Compaint, Tuly 19, i972 Decision, Futy, 19, 1972, ‘ Consent order requiring an, Oakland, California, used. car dealer to cease violating the Truth in Lending Act by failing to disclose to customers the cash price, annual percentage rate, “balloon payment” and any, other disclosures required by Regulation Z of the said Act.

Compnarnr Pursuant to the provisions of the Truth in Lending Act, and the implementing regulation pr omulgated 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 Dirito Motors, a partnership, and Donald D. Dirito and Ronald J. Dirito, individually and as co-partners trading and doing business as Dirito Motors, 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 will be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

Paracravy 1. Respondent Dirito Motors is a partnership comprised of the following named individuals who formulate, direct and control the acts and practices hereinafter set forth. The principal office and place of business of said partnership is located at 5825 East 14th Street in the city of Oakland, State of California. Respondents Donald D. Dirito and Ronald J. Dirito are individuals and co-partners trading and doing business as Dirito Motors with their {42 FEDERAL TRADE COMMISSION DECISIONS Complaint. 81 F.T.C, principal office and place of business located at the above-stated address, in Oakland, California. :

Par. 2. Respondents are now, and for some time. last past have been, engaged i in the offering for sale, and retail sale and distribution of used cars to the public. .

Par. 3. In. the ordinary c course. of their business. as. 5 aforesaid, respondents regularly extend consumer .credit, and. arrange. for.the ex: tension of consumer credit, as “consumer credit”. and “arrange for the. extension of credit” are 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, in the ordinary course of their business as aforesaid, andin connection with their credit sales, as “credit sale” is defined in Regulation Z, respondents have caused and are causing their customers to enter into contracts for the sale of respondents’ goods dnd services. On these contracts, hereinafter referr ed to as “the contract,” > respondents provide. certain consumer credit cost information. Respondents do not provide these customers with any other consumer credit costs disclosures. By and through use of the contract, respondents:

1. Fail to exclude from the “cash price,” charges of the types de- ‘scribed in Section 226.4 of Regulation Z, as required by Section 226.2(i) of Regulation Z, in that respondents fail to exclude the State of California Department of Motor Vehicles registration and transfer fees in computing the “cash price.”

2. 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 said sum as “deferred payment price” as required by Section 226.8 (c) (8) (ii) of Regulation Z. 3. Fail to disclose the “annual percentage rate” accurately to the nearest quarter of one percent, in accordance with Section 226.5 of Regulation Z, as required by Section 226.8(b) (2) of Regulation Z. 4. Fail to identify a payment which is more than twice the amount of an otherwise regularly scheduled equal payment as “balloon payment” as required by Section 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 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.

5 1 1 1 1 2 1045 467 140 30 32.302063 ‘DPIRITO:5 1 1 1 1 3 1204 468 157 37 94.961685 MOTORS,5 1 1 1 1 4 1390 472 49 23 82.083893 BT.5 1 1 1 1 5 1461 471 55 24 93.674309 AL.5 1 1 1 1 6 1604 473 39 13 33.804916 On5 1 1 1 1 7 1880 461 77 41 93.509552 143)4 1 1 1 2 0 626 537 828 39 -1 5 1 1 1 2 1 626 537 138 39 38.266930 W1005 1 1 1 2 2 1111 544 137 31 95.335121 Decisions 1 1 1 2 3 1264 549 63 25 91.226959 ‘ands 1 1 1 2 4 1346 548 108 26 60.601021 Order’4 1 1 1 3 0 1051 613 468 74 -1 5 1 1 1 3 1 1051 613 15 74 2.008301 | Decrston’ AND ‘ORDER? !' The Federal. Trade Commission having initiated a an investigation of certain acts and practices.of the respondents named in the caption hereof, and the respondents. 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 respondents with- violation of the Federal Trade Commission Act and the.Truth in Lending Act and the regulations promulgated thereunder;and _ ‘The respondents and counsel for the. Commission having thereafter -executed an agreement.containing a consent or’ der, 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 th the Commission’s rules; and . The Commission. having thereafter considered the matter and haying determined that it had. reason. to believe that respondents have violated 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 procedures prescribed in Section 2.34(b) of its rules, the commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Dirito Motors is a partnership comprised of the following named individuals who formulate, direct and control the acts and practices hereinafter set forth. The principal office and place of business of said partnership is located at 5825 East 14th Street, Oakland, State of California.

Respondents Donald D. Dirito and Ronald J. Dirito are individuals and co-partners trading and doing business as Dirito Motors with their principal office and place of business located at the above stated address in Oakland, California.

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 Dirito Motors, a partnership, and Donald D. Dirito and Ronald J. Dirito individually and as co-partners Decision and Order - 81 F.T.C..

trading and doing business as the: Dirito Motors, or under any name or names, respondents’ agents, representatives, and employees, in connection with the arrangement or extension of ‘consumer crédit, :as “consumer credit” and “advertisement” are defined in Regulation Z: (12 C.F-R. § 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 exclude from the “cash: price,” charges ofthe types ~~ described in Séction 226:4 of Regiilation’ Zy% as ‘equired by Section. 996.9(i) of Regulation Z| _ 2. Failing to disclose an ainount which i is ‘the sum of the cash price, ‘all charges Which are included i in the amount financed but which | are not att el the finaneé’ ‘charge, and: the finance > charge; : by Section 296. 8c)’ (8): (ii) of Regulation Z:- ath 3, Failing to disclose the “stinual pereentaget tate” ‘accurately t to. ‘the nearest’ quarter’ of one: percent, ‘in accordance with Section. 996.5 of Regulation’ Z, as ‘required ‘by ‘Section: 226. 8(b) @) of Regulation Z.

4) Bailing to’ ‘identity a’ payrient whicli“is‘more: than twice ithe “amount of an otherwise regulirly scheduled ‘equal: payment as. “balloon payment” as required’ by Section 926.8(by (3) ‘of Regulation Z.

5. 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 further ordered, That respondents deliver a copy of this order to cease and desist to each operating division and to all present and future personnel of respondents engaged in the consummation of any extension of consumer credit, 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 respondent partnership, such as dissolution, assignment, or sale, resulting in the emergence of a successor organization, the création or dissolution of subsidiaries, or any other change in the partnership which may affect compliance obligations arising out of the order. It is further ordered, That the individual respondents named herein promptly notify the Commission of the discontinuance of their present business or employment and of their affiliation with a new business or employment. Such notice shall include respondents’ current busi- “- BOB HIAM DODGE, INC., ET AL. ‘145 410° Complaint ness or employment i in ‘which they are engaged as well as a. description of their duties and responsibilities:

It is further ordéred, 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. :