Tuftex, Inc
Volume 81 · 81 F.T.C. 771
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Tuftex, Inc, 81 F.T.C. 771 (1972). Consumer Law Library, https://consumerlawlibrary.org/decisions/v081-0090
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IN THE Marra OF -TUFTEX, INC., ET AL.
CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE FLAMMABLE FABRICS ACTS Docket C-2814. Complaint, Nov. 7%, 1972—Decision, Nov. 1, 1978 : Consent order requiring a Dalton, Georgia, manufacturer and retailer of carpets and rugs, among other things to cease manufacturing for sale, selling, importing, or distributing any product, fabric, or related material which fails _ to conform to an applicable standard of flammability or regulation issued _ or amended under the provisions of the Flammable Fabrics Act. Complaint .
Pursuant to the provisions of the Federal Trade Commission. Act and the Flammable Fabrics Act, as amended, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Tuftex, Inc., a corporation, and Gordon C. Leonard, individually and as an. officer: of the said corporation, hereinafter referred to as respondents, have violated the provisions of the said Acts and the rules and regulations promulgated under the Flammable Fabrics Act, as amended, 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:
Paracrara 1. Respondent Tuftex, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Georgia. Respondent Gordon C. Leonard is an officer of the said corporate respondent. He formulates, directs, and controls the acts, practices, and policies of the said corporation. Respondents are engaged in the manufacture and sale of carpets and rugs, with their principal place of business located at 107 Brooker Drive, Dalton, Georgia.
Pan. 2. Respondents are now and for some time last past have been engaged in the manufacturing for sale, sale and offering for sale, in commerce, and have introduced, delivered for introduction, transported and caused to be transported in commerce, and have sold or delivered after sale or shipment in commerce, products, as the terms “commerce” and “product,” are defined in the Flammable Fabrics Act, as amended, which products fail to conform to an applicable standard or regulation continued in effect, issued or amended under the provisions of the Flammable Fabrics Act, as amended. 172 FEDERAL TRADE COMMISSION. DECISIONS Decision and Order: 81 F.T.C.
-Among such products mentioned hereinabove were carpets and rugs ‘in style “Shockpruf, Color Stop Red,” subject to Department of Com- ‘merce Standard for the Surface Flammability of Carpets and Rugs {DOC FF 1-70).
Par. 3. The aforesaid acts'and practices of respondents were and are in violation of the Flammable Fabrics Act,as amended, and the rules and regulations promulgated thereunder, and as such constituted, and now constitute unfair methods of competition and unfair and decep- “tive acts and practices in commerce, within the-intent and | meaning of — _ the Federal Trade Commission Act.
» Decision AND Orper - 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 a ‘copy of a draft of complaint which the Division of Textiles and Furs : proposed to present to the Commission fer its consideration and which, ‘if issued by the Commission; would ‘charge respondents with violation -of the Federal Trade Commission Act, andthe Flammable Fabrics Act, “as amended; 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 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order :
1. Respondent Tuftex, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Georgia.
Respondent Gordon C. Leonard is an officer of the said corporation. He formulates, directs and controls the acts, practices and policies of the said corporation.
‘TUFTEX INC., ET AL. 773° 771 Decision and Order Respondents are engaged in the manufacture and sale of carpets and rugs, with the office and principal place of business of respondents located at 107 Brooker Drive, Dalton, Georgia. 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 [t is ordered, That respondent Tuftex, Inc., a corporation, its successors and assigns, arid its officers, and respondent Gordon C. Leonard, individually and as an officer of said corporation and: respondents’ agents, representatives and employees directly or through any corporation, subsidiary, division, or other device, do forthwith cease and desist from manufacturing for sale, selling, offering for sale, in. commerce, or importing into the United States, or introducing, delivering for introduction, transporting or causing: to be transported in com--merce, or selling or delivering after sale or shipment in commerce, any: » product, fabric, or related material; or manufacturing for sale, sell-. ing, or offering for sale, any product made of fabric or related material which has been shipped or received in commerce, as “commerce,” “product,” “fabric” and “related material” are defined in the Flammable Fabrics Act, as amended, which product, fabric or related material fails to conform to an applicable standard or regulation continued in effect, issued or amended under the provisions of the aforesaid Act. It is further ordered, That respondents notify all of their customers who have purchased or to whom have been delivered the products which gave rise to this complaint, of the flammable nature of said products and effect the recall of said products from such customers. It is further ordered, That the respondents herein either process the products which gave rise to the complaint so as to bring them into conformance with the applicable standard of flammability under the Flammable Fabrics Act, as amended, or destroy said products. [tis further ordered, That respondents herein shall, within ten (10) days after service upon them of this order, file with the Commission a special report in writing setting forth the respondents’ intentions as to compliance with this order. This special report shall also advise the Commission fully and specifically concerning (1) the identity of the products which gave rise to the complaint, (2) the identity of the purchasers of said products, (3) the amount of said products on hand and in the channels of commerce, (4) any action taken and any further actions proposed to be taken to notify customers of the flammability of said products and effect the recall of said products from customers,. and the results thereof, (5) any disposition of said products since Wes FEDERAL TRADE , COMMISSION. DECISIONS Decision and Order. 81 RTC, March. 9, 1972 and (6). any-action taken. or proposed to be. taken to bring: said products. into conformance with the applicable standard of flammability under the Flammable Fabrics Act, as amended, or to. destroy said products, and the results. of ‘such action . Respondents will 5 1 3 2 1 2 767 786 137 49 96.467216 submits 1 3 2 1 3 907 786 91 41 96.614044 with5 1 3 2 1 4 1003 784 92 33 96.797195 theirs 1 3 2 1 5 1108 787 132 45 94.420090 report,5 1 3 2 1 6 1248 794 20 33 80.424492 a,5 1 3 2 1 7 1270 769 177 62 65.354469 completes 1 3 2 1 8 1459 768 211 63 95.999702 descriptions 1 3 2 1 9 1673 774 48 47 78.528549 of5 1 3 2 1 10 1726 778 88 50 96.921371 each5 1 3 2 1 11 1825 773 99 48 96.890350 styles 1 3 2 1 12 1925 772 46 39 96.890350 of5 1 3 2 1 13 1978 776 127 45 67.597366 carpet.4 1 3 2 2 0 766 821 1327 59 -1 5 1 3 2 2 1 766 848 40 22 96.683540 or5 1 3 2 2 2 825 833 65 46 96.203133 rugs 1 3 2 2 3 907 825 201 53 96.672867 currently5 1 3 2 2 4 1099 846 37 21 96.644981 in5 1 3 2 2 5 1154 825 183 51 96.862595 inventory5 1 3 2 2 6 1354 844 40 21 96.772682 or5 1 3 2 2 7 1411 827 215 47 96.881386 production.5 1 3 2 2 8 1645 821 112 55 81.828712 Upon,5 1 3 2 2 9 1760 825 151 55 93.379776 request,5 1 3 2 2 10 1921 825 172 55 49.456944 respond-4 1 3 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6 1352 981 233 42 95.196442 respondents.5 1 3 3 1 7 1592 976 106 66 93.257660 notify5 1 3 3 1 8 1726 1014 3 2 5.860023 .5 1 3 3 1 9 1727 980 63 33 96.105194 thes 1 3 3 1 10 1806 978 230 36 95.625298 Commissions 1 3 3 1 11 2053 983 39 31 96.598961 at4 1 3 3 2 0 762 1026 1337 64 -1 5 1 3 3 2 1 762 1038 95 32 12.483070 least:5 1 3 3 2 2 866 1039 39 31 12.483070 30:5 1 3 3 2 3 922 1037 90 42 53.623753 days5 1 3 3 2 4 1021 1035 99 44 95.945961 prior5 1 3 3 2 5 1135 1038 36 30 96.818329 to5 1 3 3 2 6 1186 1045 70 32 96.941216 any5 1 3 3 2 7 1272 1033 173 44 93.294090 proposed5 1 3 3 2 8 1459 1031 156 43 56.545456 changé5 1 3 3 2 9 1605 1042 38 22 96.312920 in5 1 3 3 2 10 1657 1031 67 37 82.709991 the.5 1 3 3 2 11 1728 1026 193 64 75.532120 corporate:5 1 3 3 2 12 1928 1030 171 41 51.055180 respond-.4 1 3 3 3 0 763 1080 1340 47 -1 5 1 3 3 3 1 763 1092 60 31 62.750572 ents 1 3 3 3 2 832 1088 88 33 62.750572 such5 1 3 3 3 3 935 1098 38 22 96.925682 as5 1 3 3 3 4 988 1085 214 41 93.297897 dissolution,5 1 3 3 3 5 1218 1084 267 43 81.397125 assignment.or5 1 3 3 3 6 1499 1082 72 34 93.214241 sales 1 3 3 3 7 1586 1080 221 44 88.807243 resulting.in5 1 3 3 3 8 1816 1082 64 36 91.560379 thes 1 3 3 3 9 1897 1090 206 32 43.852390 emergence:4 1 3 3 4 0 763 1130 1328 67 -1 5 1 3 3 4 1 763 1139 52 33 95.078804 of5 1 3 3 4 2 820 1151 24 21 72.452011 ‘a5 1 3 3 4 3 853 1149 173 22 96.025169 successors 1 3 3 4 4 1038 1131 240 66 96.702339 corporation,5 1 3 3 4 5 1289 1135 60 33 96.518089 thes 1 3 3 4 6 1365 1133 153 34 96.581734 creations 1 3 3 4 7 1534 1144 51 23 96.544785 or5 1 3 3 4 8 1592 1131 203 39 96.544785 dissolution5 1 3 3 4 9 1813 1131 40 33 96.988258 of5 1 3 3 4 10 1870 1125 221 49 96.912201 subsidiaries3 1 3 4 0 0 737 1168 1385 713 -1 4 1 3 4 1 0 737 1168 1381 87 -1 5 1 3 4 1 1 737 1196 151 36 0.000000 or-any5 1 3 4 1 2 904 1189 99 32 96.334885 others 1 3 4 1 3 1019 1188 113 57 96.646851 changes 1 3 4 1 4 1152 1187 23 33 86.704399 15 1 3 4 1 5 1166 1194 39 24 96.462166 in5 1 3 4 1 6 1221 1186 60 33 96.972641 thes 1 3 4 1 7 1297 1184 222 43 96.543144 corporations 1 3 4 1 8 1528 1183 132 35 20.234741 which.5 1 3 4 1 9 1657 1184 94 71 91.481850 may5 1 3 4 1 10 1762 1178 103 55 91.933182 affect,5 1 3 4 1 11 1874 1168 225 87 90.273911 compliance5 1 3 4 1 12 2113 1200 5 22 63.779045 :4 1 3 4 2 0 765 1236 1352 67 -1 5 1 3 4 2 1 765 1236 215 67 83.566513 obligations5 1 3 4 2 2 982 1238 133 43 91.638290 arising5 1 3 4 2 3 1123 1236 303 38 51.212433 outoftheorder.5 1 3 4 2 4 1496 1262 61 5 20.768280 9.5 1 3 4 2 5 1623 1252 4 9 37.772823 =5 1 3 4 2 6 2114 1254 3 9 0.000000 ,4 1 3 4 3 0 796 1251 1320 82 -1 5 1 3 4 3 1 796 1292 44 31 80.813492 It5 1 3 4 3 2 853 1292 29 41 80.813492 is5 1 3 4 3 3 895 1290 141 43 96.946182 furthers 1 3 4 3 4 1048 1289 154 40 96.799263 ordered,5 1 3 4 3 5 1217 1288 95 32 69.163391 That5 1 3 4 3 6 1324 1286 63 37 95.711014 the.5 1 3 4 3 7 1393 1265 210 68 68.492149 individual,5 1 3 4 3 8 1609 1251 209 74 96.614204 respondents 1 3 4 3 9 1824 1254 138 73 94.227036 named5 1 3 4 3 10 1963 1253 128 65 95.743271 herein5 1 3 4 3 11 2113 1299 3 19 68.828033 :4 1 3 4 4 0 769 1333 1322 51 -1 5 1 3 4 4 1 769 1331 175 53 96.711105 promptly5 1 3 4 4 2 958 1339 117 42 96.709534 notify5 1 3 4 4 3 1090 1338 58 33 96.617943 thes 1 3 4 4 4 1159 1336 234 35 96.582397 Commissions 1 3 4 4 5 1402 1336 46 32 96.582397 of5 1 3 4 4 6 1461 1335 61 32 97.004898 thes 1 3 4 4 7 1537 1333 278 33 96.428482 discontinuance5 1 3 4 4 8 1830 1333 48 32 91.760345 of.5 1 3 4 4 9 1878 1325 69 44 90.916611 his,5 1 3 4 4 10 1952 1335 139 40 90.916611 presenta 1 3 4 5 0 763 1380 1359 51 -1 5 1 3 4 5 1 763 1391 151 34 93.236626 business5 1 3 4 5 2 931 1389 287 42 61.195213 or-employmient.5 1 3 4 5 3 1236 1387 71 32 96.941772 ands 1 3 4 5 4 1322 1386 40 38 96.693062 of5 1 3 4 5 5 1378 1385 62 32 91.028908 his5 1 3 4 5 6 1451 1384 183 38 64.568283 affiliation:5 1 3 4 5 7 1644 1383 86 33 96.759781 with5 1 3 4 5 8 1744 1394 23 21 94.565651 a5 1 3 4 5 9 1784 1383 75 38 83.824944 news 1 3 4 5 10 1867 1383 174 39 68.547516 business5 1 3 4 5 11 2041 1394 50 24 85.337265 or.5 1 3 4 5 12 2112 1380 10 37 25.017426 ,4 1 3 4 6 0 765 1432 1348 51 -1 5 1 3 4 6 1 765 1442 239 41 96.100937 employment.5 1 3 4 6 2 1020 1439 98 36 93.964203 Such5 1 3 4 6 3 1134 1437 115 33 78.808617 ‘notices 1 3 4 6 4 1259 1437 96 32 96.301888 shall5 1 3 4 6 5 1372 1435 150 33 95.195442 include:5 1 3 4 6 6 1518 1426 255 50 78.967316 -respondent’s5 1 3 4 6 7 1780 1426 147 44 37.814655 current.5 1 3 4 6 8 1932 1428 181 49 37.814655 ‘business4 1 3 4 7 0 761 1478 1339 85 -1 5 1 3 4 7 1 761 1503 39 21 96.080544 or5 1 3 4 7 2 814 1488 256 45 0.000000 employment:5 1 3 4 7 3 1061 1500 37 21 0.000000 in5 1 3 4 7 4 1112 1488 116 33 93.288635 which5 1 3 4 7 5 1242 1485 312 42 58.841549 he.is-engaged.as.5 1 3 4 7 6 1569 1484 88 33 87.804688 wells 1 3 4 7 7 1662 1494 80 25 35.232239 as.a,5 1 3 4 7 8 1745 1478 219 85 68.553429 descriptions 1 3 4 7 9 1969 1479 53 51 56.812836 of:5 1 3 4 7 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162 34 96.002953 LOCAL5 1 6 1 1 2 1218 2078 219 34 96.002953 FINANCES 1 6 1 1 3 1460 2076 351 36 96.310165 CORPORATION2 1 7 0 0 0 835 2150 1176 101 -1 3 1 7 1 0 0 835 2150 1176 101 -1 4 1 7 1 1 0 835 2150 1176 56 -1 5 1 7 1 1 1 835 2178 157 23 96.399963 CONSENTS 1 7 1 1 2 1002 2176 113 30 93.258507 ORDER,5 1 7 1 1 3 1126 2175 82 30 90.954475 ETC.,5 1 7 1 1 4 1219 2175 43 20 95.926392 IN5 1 7 1 1 5 1270 2173 128 23 95.849014 REGARDS 1 7 1 1 6 1407 2173 42 22 95.849014 TO5 1 7 1 1 7 1459 2173 70 21 96.502792 THES 1 7 1 1 8 1540 2160 147 34 96.860077 ALLEGED5 1 7 1 1 9 1696 2150 172 54 96.580734 VIOLATIONS 1 7 1 1 10 1885 2154 45 39 96.606689 OF5 1 7 1 1 11 1940 2173 71 21 96.557289 THEA 1 7 1 2 0 843 2218 1160 33 -1 5 1 7 1 2 1 843 2229 149 22 85.774048 FEDERAL5 1 7 1 2 2 1009 2228 107 22 96.742447 TRADES 1 7 1 2 3 1134 2226 220 22 96.507942 COMMISSIONS 1 7 1 2 4 1372 2224 73 21 96.532555 ANDS 1 7 1 2 5 1461 2224 74 21 96.303688 THES 1 7 1 2 6 1551 2223 119 22 96.233429 TRUTH5 1 7 1 2 7 1689 2223 41 22 96.960663 IN5 1 7 1 2 8 1748 2223 156 22 96.412758 LENDING5 1 7 1 2 9 1920 2218 83 27 96.906982 ACTS2 1 8 0 0 0 903 2299 1039 33 -1 3 1 8 1 0 0 903 2299 1039 33 -1 4 1 8 1 1 0 903 2299 1039 33 -1 5 1 8 1 1 1 903 2306 113 24 91.016640 Dockets 1 8 1 1 2 1027 2304 117 25 59.449242 C-2815.5 1 8 1 1 3 1157 2302 174 30 96.142509 Complaint,5 1 8 1 1 4 1341 2301 71 25 96.060303 Nov.5 1 8 1 1 5 1423 2301 43 29 70.909363 13,5 1 8 1 1 6 1477 2300 250 29 90.909721 1972—Decision,5 1 8 1 1 7 1737 2299 72 26 94.614136 Nov.5 1 8 1 1 8 1819 2299 43 30 72.380219 138,5 1 8 1 1 9 1890 2300 52 25 94.825775 19722 1 9 0 0 0 760 2376 1326 205 -1 3 1 9 1 0 0 760 2376 1326 117 -1 4 1 9 1 1 0 760 2376 1326 35 -1 5 1 9 1 1 1 760 2382 127 25 96.403175 Consents 1 9 1 1 2 900 2382 86 25 96.646019 orders 1 9 1 1 3 1000 2380 150 30 96.046257 requiring5 1 9 1 1 4 1163 2386 18 18 96.046257 a5 1 9 1 1 5 1195 2379 187 32 96.519165 Providence,5 1 9 1 1 6 1396 2377 102 24 96.389008 Rhodes 1 9 1 1 7 1514 2376 108 29 95.661102 Island,5 1 9 1 1 8 1637 2376 68 25 96.418854 loans 1 9 1 1 9 1719 2381 147 23 96.338913 company,5 1 9 1 1 10 1882 2381 106 24 96.281273 among5 1 9 1 1 11 2002 2376 84 25 96.281273 other4 1 9 1 2 0 830 2416 1254 38 -1 5 1 9 1 2 1 830 2419 100 35 96.554527 things5 1 9 1 2 2 944 2425 32 24 96.428864 to5 1 9 1 2 3 991 2429 83 19 96.778748 ceases 1 9 1 2 4 1090 2422 145 29 96.329140 violating5 1 9 1 2 5 1250 2421 50 25 96.400589 thes 1 9 1 2 6 1316 2420 95 25 96.484886 Truth5 1 9 1 2 7 1426 2420 32 23 96.674126 in5 1 9 1 2 8 1474 2419 132 29 96.514923 Lending5 1 9 1 2 9 1620 2418 55 25 95.651932 Acts 1 9 1 2 10 1691 2418 38 30 95.651932 by5 1 9 1 2 11 1744 2418 108 28 96.668266 failing5 1 9 1 2 12 1866 2418 30 24 97.018120 to5 1 9 1 2 13 1913 2416 123 27 96.981033 discloses 1 9 1 2 14 2053 2419 31 24 96.959785 to4 1 9 1 3 0 829 2460 1257 33 -1 5 1 9 1 3 1 829 2467 162 25 90.189491 customers5 1 9 1 3 2 1006 2466 113 24 96.796173 finances 1 9 1 3 3 1134 2464 139 29 96.878502 charges;5 1 9 1 3 4 1289 2463 51 25 96.594040 thes 1 9 1 3 5 1354 2463 64 24 96.533165 facts 1 9 1 3 6 1432 2463 68 24 96.082428 that5 1 9 1 3 7 1516 2462 154 24 96.082428 insurance5 1 9 1 3 8 1687 2467 139 23 96.091454 coverage5 1 9 1 3 9 1841 2460 27 25 96.091454 is5 1 9 1 3 10 1881 2461 53 24 96.261604 not5 1 9 1 3 11 1949 2462 137 29 96.261604 required3 1 9 2 0 0 799 2503 1286 78 -1 4 1 9 2 1 0 799 2503 1286 36 -1 5 1 9 2 1 1 799 2528 2 2 61.410889 .5 1 9 2 1 2 829 2511 37 28 94.643082 by5 1 9 2 1 3 889 2510 51 24 93.115395 thes 1 9 2 1 4 961 2509 143 28 91.308304 ereditor;5 1 9 2 1 5 1130 2508 50 23 96.345634 thes 1 9 2 1 6 1202 2506 112 24 89.601456 annual5 1 9 2 1 7 1336 2506 174 29 88.818100 ‘percentages 1 9 2 1 8 1534 2504 79 29 96.610336 rate;5 1 9 2 1 9 1639 2504 58 24 95.123055 ands 1 9 2 1 10 1720 2509 58 23 95.123055 any5 1 9 2 1 11 1801 2503 85 24 96.502632 others 1 9 2 1 12 1909 2503 176 26 96.707840 disclosures4 1 9 2 2 0 832 2548 651 33 -1 5 1 9 2 2 1 832 2552 135 29 96.085663 required5 1 9 2 2 2 976 2551 37 29 96.085663 by5 1 9 2 2 3 1024 2550 177 29 93.295074 Regulations 1 9 2 2 4 1211 2549 21 24 92.273270 Z5 1 9 2 2 5 1243 2549 33 24 96.292351 of5 1 9 2 2 6 1285 2549 51 24 96.870323 thes 1 9 2 2 7 1344 2548 67 25 96.069344 said5 1 9 2 2 8 1420 2548 63 24 96.069344 Act. ‘CLLOCAL FINANCE! CORPORATION)... 775:
TIA le, Complaint + COMPLAINT. |» 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 Local Finance. Corporation, a corporation, hereinafter sometimes. referred to as respondent, has violated the provisions of said Acts and. of the implementing regulation promulgated under the Truth in Lending Act, and.it appearing to the Commission that.a proceeding by it.inrespect thereot would be in the public interest, hereby issues its com-. plaint stating its charges i in that respect as follows: wots Paracrary 1. Respondent Local Finance Corporation. is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Rhode Island and Providence Plantations with its. principal, office and place of business located at 179 “Wayland Avenue, , Providence, Rhode Island..
Respondent Local. Finance Corporation has established and operated a number of corporate subsidiaries, for the purpose of engaging. in the business of lending money to the public. Respondent Local Finance: Corporation. currently operates a substantial number of these. ‘subsidiaries which. are located in the States of Rhode Island, Massachusetts, New Jersey, Pennsylvania and North Carolina. Respondent Local Finance Corporation, in the operation of certain of these subsidiaries uses: various trade names, such as Provident Management Corporation, Local Consumer Discount Company and Local Acceptance Company.
Respondent Local Finance Corporation dominates, controls, furnishes the means, instrumentalities, services and facilities for, and condones and approves the acts and practices of its subsidiaries including the acts and practices hereinafter set forth. Moreover, respondent Local Finance Corporation directly or indirectly profits and benefits by and through the acts and practices hereinafter set forth. Par. 2. Respondent is now, and has for some time last past, through its varlous organizational divisions and subsidiaries, been engaged in the business of lending money to the public. Respondent Local _Finance Corporation and its subsidiary organizations cooperate and act together in the carrying out of their business as hereinafter set forth. Their volume of business has been, and is, substantial. Par. 3. In the ordinary course and conduct. of its business as aforesaid, respondent regularly extends and for some time last past has regularly extended consumer credit as “consumer credit” is defined in 776. FEDERAL TRADE. COMMISSION DECISIONS Complaint OS 81 F.T.C.
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, i in the ordinary course and conduct of its business ‘and i in connection with its extensions of consumer credit as “consumer credit” is defined in Regulation Z, has. caused and is causing customers to execute a loan agreement hereinafter referred to as the “Small Loan Set” and consisting of fourteen , pages, each separated by a carbon sheet. The thirteenth page of. the loan set, which serves as the respondent’s office copy and also as a receipt that the customer received a Statement of Disclosure, is en- titled “Statement of Disclosure and Insurance Authorization.” By and through the use of the Small Loan Set respondent : 1. Failed, when the fact that insurance coverage ‘was not: required by the creditor was not clearly and conspicuously “disclosed to the customer in writing, to include the amount of the charge for such 1 insurance in the finance charge as required by Section 226. 4(a) (5). (i) of Regulation %, and thereby failed to state the finance charge: accurately as required by Section 226.8(d) (3). 2. Fails to disclose to customers clearly, conspicuously i in writing, and in meaningful sequence that i insurance coverage is not required by the creditor, as required by Section 226.6(a) of Regulation Z. 3. Fails to furnish customers with a duplicate of the instrument containing the disclosures or a separate statement of disclosure on which all of the required disclosures are made clearly, conspicuously and legibly at the time those disclosures are made as required by Section 226.8(a) of Regulation Z.
4, Fails to disclose the “annual percentage rate” accurately to the nearest quarter of one percent, computed in accordance with the provisions of Section 226.5 (b) (1) of Regulation Z, as required by Section 226.8(b) (2) 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 Reg. ulation Z constitute violations of the Truth in Lending Act and, pursuant to Section 108 thereof, respondent thereby violated the Fed. eral Trade Commission Act. , DxcIsIoN AND Orper The Commission having heretofore determined to issue e its complaint charging the respondent named in the caption hereto with violation of the Federal Trade Commission Act, and the Truth in Lending Act, and the respondent having been served with notice of said determina- “LOCAL FINANCE CORPORATION TTT 774, Decision ‘and Order tion and with a copy of the complaint the Commission intended to issue, together witha proposed form of order; 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 i 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 respondent that the law has been. violated as alleged in such complaint, and waivers and other provisions as s required by the Commission’s rules; and “The Commission having considered the agreenient and having provisionally 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 coniplaints in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order: ‘1. Respondent Local Finance Corporation is a corporation ' orga-, nized, existing and doing business under and by virtiie of the laws of the’ State of Rhode Island, with its office and principal place of business located at 179 Wayland Avenue, Providence, Rhode Island.. 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 Local Finance Corporation, a corporation, doing business as Provident Management Corporation, Local Consumer Discount Company, Local Acceptance Company or any other name, its successors and assigns, and its officers, and respondent’s agents, representatives and employees, directly or through any corporation, subsidiary, affiliate, so-called Massachusetts business trust, division, or other device, in connection with any extension or arrangement for the extension of consumer credit as “consumer credit” is defined in Regulation Z (12 C.F.R. § 226) of the Truth in Lending Act (Pub. L. 90-821, 15 U.S.C. 1601 e¢ seg.), do forthwith cease and desist from: 1, Failing to include in the finance charge, for purposes of disclosure of the finance charge and computation of the annual percentage rate, any charge for credit life or disability insurance, unless the fact that such insurance is not required is clearly and conspicuously disclosed to the customer in writing as provided in Section 226.4 (a) (5) (i).
494-841—73—_50 778 FEDERAL; TRADE COMMISSION DECISIONS Decision and, Order; SL RTC.
2, Failing to disclose: to customers: clearly, conspicuously, in writing and in a meaningful sequence that,insurance coverage is not required by the creditor, as required by. Section.226.6 of Regulation Z. | 3. Failing to furnish customers with. a ‘duplicate of the instru-. ment, containing the: disclosures or a separate. statement of disclosure on which all of the required disclosures are made clearly, conspicuously and legibly at the time those disclosures are made ; _as. required by Section 226.8(a) of Regulation: Z. 4, Failing to disclose the “annual percentage rate” accurately _to. the nearest . quarter. of: one. percent,,,.computed..in, accordance _ with. the. provisions., of. Section. 226.5(b) (1)..of. Regulation, % ‘as: _ required by Section 226, 8 (b). (2) of Regulation Z... J 5... Failing in any. consumer credit. transaction, to make all the : disclosures determined in accordance; with Section, 226.4 and.Sec- . tion 926.5. of. Regulation: -Z, in the. manner, form and. amount re-| quired5 1 2 1 17 2 997 1370 48 55 96.194511 by5 1 2 1 17 3 1060 1377 156 46 95.434418 Sections5 1 2 1 17 4 1230 1384 104 38 96.583313 226.6,5 1 2 1 17 5 1348 1373 93 43 96.583313 226.85 1 2 1 17 6 1455 1366 78 63 82.544914 and,5 1 2 1 17 7 1538 1383 117 41 82.044601 296.105 1 2 1 17 8 1669 1380 51 33 94.538078 of5 1 2 1 17 9 1723 1380 221 44 90.988846 Regulations 1 2 1 17 10 1942 1381 91 41 0.000000 Z.:....°5 1 2 1 17 11 2110 1408 4 5 47.607887 ..3 1 2 2 0 0 774 1409 1341 268 -1 4 1 2 2 1 0 820 1409 1288 73 -1 5 1 2 2 1 1 820 1434 38 32 64.501495 It5 1 2 2 1 2 873 1434 30 38 68.099533 is5 1 2 2 1 3 916 1433 142 43 95.008430 furthers 1 2 2 1 4 1073 1421 159 61 87.802505 ordered,5 1 2 2 1 5 1243 1433 129 43 90.885117 That.a5 1 2 2 1 6 1387 1443 88 33 73.809753 copy.5 1 2 2 1 7 1492 1425 40 39 94.178558 of5 1 2 2 1 8 1542 1419 85 50 91.755608 this:5 1 2 2 1 9 1632 1431 101 41 35.928452 order.5 1 2 2 1 10 1748 1435 37 29 35.928452 to5 1 2 2 1 11 1801 1442 94 22 96.516212 ceases 1 2 2 1 12 1910 1431 73 38 65.481674 and,5 1 2 2 1 13 1988 1409 120 68 71.219772 desist’4 1 2 2 2 0 777 1482 1338 45 -1 5 1 2 2 2 1 777 1479 48 38 96.772751 be5 1 2 2 2 2 841 1484 173 36 77.759018 delivered5 1 2 2 2 3 1033 1488 37 36 96.302292 to5 1 2 2 2 4 1082 1484 58 39 96.371086 all5 1 2 2 2 5 1159 1486 144 41 89.965607 present.5 1 2 2 2 6 1315 1474 74 50 79.197144 and:5 1 2 2 2 7 1403 1479 135 42 91.791031 future.5 1 2 2 2 8 1546 1482 180 45 92.160049 personnel5 1 2 2 2 9 1744 1482 51 40 92.160049 of.5 1 2 2 2 10 1799 1482 225 44 88.747238 respondents 1 2 2 2 11 2024 1482 91 40 0.077812 and.4 1 2 2 3 0 774 1517 1340 67 -1 5 1 2 2 3 1 774 1528 46 47 96.533058 its5 1 2 2 3 2 830 1535 226 45 96.424683 subsidiaries5 1 2 2 3 3 1069 1517 140 67 95.109169 engaged5 1 2 2 3 4 1226 1534 22 32 90.579475 i5 1 2 2 3 5 1239 1545 38 21 96.987488 in5 1 2 2 3 6 1285 1527 64 50 96.987488 thes 1 2 2 3 7 1361 1533 287 43 93.590149 consummation5 1 2 2 3 8 1648 1533 40 42 93.590149 of5 1 2 2 3 9 1702 1543 86 32 95.919991 any5 1 2 2 3 10 1781 1533 178 42 93.273933 extensions 1 2 2 3 11 1972 1533 142 35 28.529373 of,con--4 1 2 2 4 0 776 1568 1325 65 -1 5 1 2 2 4 1 776 1582 114 36 86.740723 sumers 1 2 2 4 2 913 1585 120 41 86.740723 credits 1 2 2 4 3 1042 1584 76 42 73.309952 and.5 1 2 2 4 4 1139 1585 88 42 72.286621 that:5 1 2 2 4 5 1233 1568 215 65 85.446411 respondents 1 2 2 4 6 1465 1580 133 51 82.363724 secure.5 1 2 2 4 7 1607 1572 104 54 84.387543 from.5 1 2 2 4 8 1722 1576 87 49 82.488228 each5 1 2 2 4 9 1826 1584 231 41 88.259216 such..persons 1 2 2 4 10 2076 1594 25 22 78.151093 .a4 1 2 2 5 0 778 1634 1011 43 -1 5 1 2 2 5 1 778 1629 121 48 96.985458 signed5 1 2 2 5 2 910 1628 182 40 96.347572 statements 1 2 2 5 3 1103 1628 284 49 96.908264 acknowledging5 1 2 2 5 4 1397 1635 129 42 96.721695 receipts 1 2 2 5 5 1537 1635 40 32 96.721695 of5 1 2 2 5 6 1586 1624 58 43 96.818558 thes 1 2 2 5 7 1654 1620 135 48 54.814411 order.3 1 2 3 0 0 778 1684 1341 247 -1 4 1 2 3 1 0 815 1684 1304 43 -1 5 1 2 3 1 1 815 1688 38 30 88.311890 It5 1 2 3 1 2 869 1688 29 31 91.949860 is5 1 2 3 1 3 914 1686 141 42 95.852722 furthers 1 2 3 1 4 1072 1686 154 41 95.959183 ordered,5 1 2 3 1 5 1242 1686 92 32 95.989632 That5 1 2 3 1 6 1351 1685 208 41 95.989632 respondents 1 2 3 1 7 1574 1684 234 42 96.107559 prominently5 1 2 3 1 8 1823 1684 139 42 96.297935 displays 1 2 3 1 9 1976 1695 45 22 96.930412 no5 1 2 3 1 10 2036 1671 83 45 33.585785 less.4 1 2 3 2 0 778 1734 1323 45 -1 5 1 2 3 2 1 778 1737 85 33 96.959084 than5 1 2 3 2 2 874 1741 69 29 96.967346 two5 1 2 3 2 3 954 1737 95 42 96.606873 signs5 1 2 3 2 4 1061 1748 45 21 96.482315 on5 1 2 3 2 5 1117 1737 55 32 96.729973 thes 1 2 3 2 6 1178 1737 171 41 96.862984 premises5 1 2 3 2 7 1358 1737 42 32 96.707291 of5 1 2 3 2 8 1410 1737 83 32 96.762054 each5 1 2 3 2 9 1503 1736 91 32 92.944649 offices 1 2 3 2 10 1604 1736 148 32 96.398895 locations 1 2 3 2 11 1763 1735 112 32 96.617729 which5 1 2 3 2 12 1887 1734 73 33 96.801292 will5 1 2 3 2 13 1972 1734 129 42 96.966019 clearly4 1 2 3 3 0 779 1786 1320 44 -1 5 1 2 3 3 1 779 1788 69 33 96.494202 ands 1 2 3 3 2 861 1787 262 43 96.672348 conspicuously5 1 2 3 3 3 1134 1791 87 29 96.688835 states 1 2 3 3 4 1233 1787 77 32 78.024643 that5 1 2 3 3 5 1322 1798 21 21 78.024643 a5 1 2 3 3 6 1355 1790 169 30 96.457741 customers 1 2 3 3 7 1536 1790 92 29 96.449852 must5 1 2 3 3 8 1639 1786 129 32 96.151451 receives 1 2 3 3 9 1780 1797 21 21 96.151451 a5 1 2 3 3 10 1811 1786 191 41 96.768097 completed5 1 2 3 3 11 2012 1795 87 33 96.556580 copy4 1 2 3 4 0 778 1835 1322 43 -1 5 1 2 3 4 1 778 1838 39 32 96.600464 of5 1 2 3 4 2 836 1838 58 32 96.612518 thes 1 2 3 4 3 914 1848 177 23 96.637909 consumers 1 2 3 4 4 1110 1837 110 33 96.550819 credits 1 2 3 4 5 1238 1842 72 28 90.096367 costs 1 2 3 4 6 1328 1838 213 40 96.512772 disclosures,5 1 2 3 4 7 1561 1848 38 21 96.798119 as5 1 2 3 4 8 1617 1836 158 42 96.441322 required5 1 2 3 4 9 1790 1836 48 42 96.301186 by5 1 2 3 4 10 1855 1836 59 33 96.479355 thes 1 2 3 4 11 1931 1836 114 33 96.626709 Truth5 1 2 3 4 12 2061 1835 39 34 96.851540 in4 1 2 3 5 0 778 1887 984 44 -1 5 1 2 3 5 1 778 1889 160 42 96.011711 Lending5 1 2 3 5 2 948 1889 79 40 96.743149 Act,5 1 2 3 5 3 1037 1889 120 32 96.813904 before5 1 2 3 5 4 1166 1889 60 32 97.004196 thes 1 2 3 5 5 1235 1888 213 33 96.338272 transactions 1 2 3 5 6 1458 1887 31 34 96.769676 is5 1 2 3 5 7 1500 1887 262 34 95.980942 consummated.3 1 2 4 0 0 777 1934 1324 301 -1 4 1 2 4 1 0 818 1934 1283 47 -1 5 1 2 4 1 1 818 1940 37 32 92.697083 It5 1 2 4 1 2 874 1940 30 32 96.535347 is5 1 2 4 1 3 925 1939 140 42 96.937645 furthers 1 2 4 1 4 1087 1939 153 41 96.570526 ordered,5 1 2 4 1 5 1261 1940 94 32 95.450653 That5 1 2 4 1 6 1375 1939 208 42 95.666756 respondents 1 2 4 1 7 1602 1938 117 43 96.728477 notify5 1 2 4 1 8 1737 1934 59 37 96.600235 thes 1 2 4 1 9 1817 1937 226 35 90.076111 Commission.5 1 2 4 1 10 2063 1941 38 29 95.858719 at4 1 2 4 2 0 779 1989 1321 44 -1 5 1 2 4 2 1 779 1990 86 33 96.491577 least5 1 2 4 2 2 880 1989 113 43 96.666168 thirty5 1 2 4 2 3 1015 1990 73 42 79.772583 (80)5 1 2 4 2 4 1111 1991 85 41 96.844727 days5 1 2 4 2 5 1213 1990 97 42 96.530830 prior5 1 2 4 2 6 1324 1994 36 29 96.438293 to5 1 2 4 2 7 1377 2001 69 32 96.370171 any5 1 2 4 2 8 1462 1989 171 43 96.145622 proposed5 1 2 4 2 9 1647 1989 131 43 96.316963 changes 1 2 4 2 10 1794 1989 38 32 96.455284 in5 1 2 4 2 11 1846 1989 59 32 96.581741 thes 1 2 4 2 12 1921 1992 179 38 96.805557 corporate4 1 2 4 3 0 778 2039 1323 44 -1 5 1 2 4 3 1 778 2042 217 41 96.377747 respondent,5 1 2 4 3 2 1015 2040 83 33 96.577309 such5 1 2 4 3 3 1117 2051 37 22 96.425453 as5 1 2 4 3 4 1174 2040 214 41 96.410866 dissolution,5 1 2 4 3 5 1408 2040 219 43 96.324562 assignment,5 1 2 4 3 6 1644 2051 41 21 96.963638 or5 1 2 4 3 7 1702 2040 80 40 96.835098 sale,5 1 2 4 3 8 1801 2039 169 43 96.732430 resulting5 1 2 4 3 9 1987 2040 37 32 96.750023 in5 1 2 4 3 10 2040 2039 61 33 96.379303 thea 1 2 4 4 0 777 2089 1324 45 -1 5 1 2 4 4 1 777 2103 194 31 96.714676 emergence5 1 2 4 4 2 991 2091 40 33 96.833405 of5 1 2 4 4 3 1051 2102 21 22 96.757103 a5 1 2 4 4 4 1092 2102 170 22 96.282097 successors 1 2 4 4 5 1281 2091 236 42 96.400055 corporation,5 1 2 4 4 6 1528 2091 71 33 94.093712 thes 1 2 4 4 7 1607 2089 155 44 94.093712 creating5 1 2 4 4 8 1779 2101 40 23 96.705002 or5 1 2 4 4 9 1839 2090 203 33 96.913574 dissolution5 1 2 4 4 10 2061 2090 40 33 96.481323 of4 1 2 4 5 0 778 2136 1323 76 -1 5 1 2 4 5 1 778 2142 232 41 95.978233 subsidiaries,5 1 2 4 5 2 1024 2152 40 23 96.333817 or5 1 2 4 5 3 1080 2153 68 32 96.146667 any5 1 2 4 5 4 1165 2142 98 32 96.666367 others 1 2 4 5 5 1278 2138 121 65 96.946007 changes 1 2 4 5 6 1426 2142 6 7 73.834763 i5 1 2 4 5 7 1423 2153 37 21 96.450310 in5 1 2 4 5 8 1473 2142 61 33 95.838249 thes 1 2 4 5 9 1545 2140 220 44 96.610069 corporations 1 2 4 5 10 1778 2136 114 69 96.786781 which5 1 2 4 5 11 1905 2151 83 32 96.561844 may5 1 2 4 5 12 2002 2137 99 75 76.827087 effect4 1 2 4 6 0 778 2192 884 61 -1 5 1 2 4 6 1 778 2192 211 61 96.436714 compliance5 1 2 4 6 2 999 2192 209 43 96.264587 obligations5 1 2 4 6 3 1218 2191 133 44 96.506042 arising5 1 2 4 6 4 1360 2196 62 30 96.721222 outs 1 2 4 6 5 1433 2193 40 33 96.972580 of5 1 2 4 6 6 1481 2193 60 34 96.309853 thes 1 2 4 6 7 1552 2193 110 33 94.926422 order.3 1 2 5 0 0 775 2242 1326 197 -1 4 1 2 5 1 0 819 2242 1280 44 -1 5 1 2 5 1 1 819 2245 38 32 86.596657 It5 1 2 5 1 2 870 2244 30 33 68.669296 is5 1 2 5 1 3 913 2244 142 42 96.175499 furthers 1 2 5 1 4 1068 2244 155 40 96.443504 ordered,5 1 2 5 1 5 1237 2244 94 33 95.907120 That5 1 2 5 1 6 1342 2244 59 33 96.724106 thes 1 2 5 1 7 1416 2244 206 41 96.235664 respondents 1 2 5 1 8 1634 2242 118 34 96.637695 herein5 1 2 5 1 9 1766 2242 90 33 96.894730 shall5 1 2 5 1 10 1871 2242 122 33 96.729675 within5 1 2 5 1 11 2007 2243 92 42 96.675545 sixty4 1 2 5 2 0 784 2293 1315 45 -1 5 1 2 5 2 1 784 2295 75 43 96.098938 (60)5 1 2 5 2 2 879 2295 86 42 96.205757 days5 1 2 5 2 3 979 2294 93 34 96.205757 after5 1 2 5 2 4 1084 2295 128 33 96.507729 services 1 2 5 2 5 1223 2305 94 31 96.507729 upon5 1 2 5 2 6 1330 2294 30 33 96.873245 it5 1 2 5 2 7 1372 2294 40 34 96.467270 of5 1 2 5 2 8 1423 2294 71 33 96.964561 this5 1 2 5 2 9 1508 2295 111 40 96.154167 order,5 1 2 5 2 10 1633 2294 58 32 96.154167 files 1 2 5 2 11 1703 2294 84 32 96.388206 with5 1 2 5 2 12 1800 2294 60 32 96.278496 thes 1 2 5 2 13 1873 2293 226 33 96.170105 Commission4 1 2 5 3 0 778 2341 1323 47 -1 5 1 2 5 3 1 778 2357 20 21 96.642776 a5 1 2 5 3 2 817 2348 127 39 96.642776 report,5 1 2 5 3 3 964 2345 37 32 96.908539 in5 1 2 5 3 4 1020 2345 151 42 96.283318 writing,5 1 2 5 3 5 1189 2346 129 42 96.283318 settings 1 2 5 3 6 1336 2346 97 32 96.864258 forth5 1 2 5 3 7 1451 2345 36 32 97.017311 in5 1 2 5 3 8 1507 2345 106 33 96.406693 details 1 2 5 3 9 1630 2346 60 31 96.585953 thes 1 2 5 3 10 1706 2341 144 36 96.831161 manners 1 2 5 3 11 1867 2344 69 33 96.488655 ands 1 2 5 3 12 1952 2344 93 33 95.617569 forms 1 2 5 3 13 2062 2343 39 34 95.617569 in4 1 2 5 4 0 775 2396 915 43 -1 5 1 2 5 4 1 775 2396 115 33 96.633278 which5 1 2 5 4 2 899 2397 29 33 95.816689 it5 1 2 5 4 3 937 2397 64 33 96.470360 has5 1 2 5 4 4 1011 2396 170 43 96.457321 complied5 1 2 5 4 5 1192 2396 85 33 95.899261 with5 1 2 5 4 6 1285 2396 72 33 96.522224 this5 1 2 5 4 7 1366 2397 111 33 95.275627 order. -DERBY. CONSTRUCTION INC., ET.AL. ». 7709; Complaint. .