Mark Home Furniture Company, trading as Central Home Furnishers

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I:' THE MATTER OF MARK HOME n:RNlTL'HE COMPANY, TRADlXG AS CENTRAL HO:vE FUIc!\ISIIERS, ET AL.

CONSE:\T ORDER. ETC. , 1:\ REGARD TO THE ALLEGJm V10LATI01\1 OF THE FEDERAL TRADE COI\II'vllSSI0N AND THE TH UTI! IN LE:\DI G ACT:;

Docket C-:!Jfi-4. COI/iploiut, AJJiillO , l.9"(, Decisioll, April;!O, 1.97J. Consent order reCJuiring 8. Baltimore, 1\1 aJ'yl811CJ , furnit lire retailer, among' other things to cease violating- the Truth in Lending' Act by failing' to disclose to consumers, in connection with the extension of consumer credit, such information as required by Reg-ulation Z of the said Act. COMPLAI 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 l\Iark Home Furniture Company, a cor­ poration, trading and doing business as Central Home Fur­ nisbers, and :vorton Miller and Ervin Miller, individually and as officers of said corporation, hereinafter sometimes referred to as respondents, have violated the provisions of said Acts and implementing regulation, and it appearing to the Commis­ sion 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:

PARAGRAPH 1. Respondent :Vlark Home Furniture Company, is a corporation, trading and doing business as Central Home Furnishers, organized, existing and doing business under and Complaint 82 F.

by virtue of the laws of the State of Maryland, with its principal office and place of business located at 878 West Baltimore Street Baltimore, Maryland.

Respondents Morton IVIiller and Ervin Miller are officers of the corporate respondent. They formulate, direct and control the acts and practices of the corporate respondent including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent. The respondents cooperate and act together in carrying out the acts an(1 practices hereinafter set forth. PAR. 2. Respondents are now, and for some tin1€ last past have been, engaged in the offering for sale and retail sale of furniture and appliances to the public. PAR. 3. In the ordinary course and conduct 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 prom ulgated by the Board of Governors of the Federal Reserve System. PAR. 4. Subsequent to July 1 , 1969, respondents, in the ordinary coursf. of business as aforesaid, and in connection with their credit sales, as " credit sale" is defined in Regulation Z, have caused and are causing customers purchasing furniture and appliances to execute conditional sales contracts. Respondents do not provide these customers with any other credit cost dis­ closures.

By and through the use of this conditional sales contract respondents:

1. Fail in some instances to disclose the annual percentage rate with an accuracy of one-fourth of one percent computed in accordance with Section 226. 5(b) of Regulation Z, as required by Section 226.8(b)(2) of Regulation Z. 2. Fail in some instances to disclose the number of payments scheduled to repay the indebtedness, as required by Section 226. 8(b)(3) of Regulation Z.

3. Fail in some instances to disclose the due dates of payments scheduled to repay the indebtedness, as required by Section 226. 8(b)(3) of Regulation Z.

4. Fail in some instances to use the term "total of payments to describe the sum of the payments scheduled to repay the indebtedness, as required by Section 22G.8(b)(3) of Regulation 5. Fail in some instances to accurately disclose the total of payments, as required by Section 226.8(b)(3) of Regulation Z. MARK HO:VIE FUR:\ITCRE CO. , ET AL. 1243 1241 Decision and Order 6. Fail to describe the type of any security interest held or to be retained or acquired by the creditor in connection with the extension of credit, as required by Section 226. 8(b)(5) ofRegu­ lation Z.

7. Fail in some instances to identify the method of computing any unearned portion of the finance charge in the event of pre­ payment of the obligation, as required by Section 226. 8(b)(7) of Regulation Z.

8. Fail in some instances to use the term "cash price " as defined in Section 226.2(i) of Regulation Z, to describe the purchase price of the goods, as required by Section 226.8(c)(1) of Regulation Z.

9. Fail in some instances to use the term " cash down payment" to describe the down payment in money made in connection with the credit sale, as required by Section 226. 8(c)(2) of Regulation 10. Fail in some instances to accurately disclose the amount ofthe down payment, as required by Section 226. 8(e)(2) of Regula­ tion Z.

11. Fail in some instances 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.

12. Fail 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.

13. Fail in some instances to accurately disclose the amount financed, as required by Section 226.8(c)(7) of Regulation Z. 14. Fail in some instances 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. PAR. 6. Pursuant to Section J 03(q) of the Truth in Lending Act, respondents' aforesaid failure to comply with the provisions of Regulation Z constitute violations of that Act and, pursuant to Section J08 thereof, respondents thereby violated the Federal Trade Commission Act.

DECISIO:\ AND Onder The Federal Trade Commission having initiated an investiga­ tion 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 1244 FEDERAL TRADE CO:VIMISSION DECISIONS Dccision and Order 82 F. Washington, D. C. Eegional 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 reg' ulations promulgated thereun­ der and violation of the Federal Trade Commission Act; and The respondents and counsel forthc Commission havingthere­ after 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 statemcnt 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 conlplaint, makes the follo\ving jurisdictional findings, and enters the following order:

1. Respondent Mark Home Furniture Company, trading and doing business as Central Home Furnishers, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Maryland, with its office and principal place of business located at 878 West Baltimore Street, Bal­ timore, :v maryland.

Respondents Morton :viller and Ervin Miller are offcers of said corporation. They formulate, direct and control the policies acts and practices of said corporation, and their principal office and place of business is located at the above stated address. 2. The Federal Trade Commission has jurisdiction ofthc sub­ ject matter of this proceeding and of the respondents, and thc proceeding is in the public interest.

ORDER !tis orclered That respondents :\lark Home Furniture Com­ pany, a corporation, trading and doing business as Central RODle Furnishers, or under any other name or names, its successors and assigns, and its officers, and Morton Miller, and Ervin Miller individually and as officers of said corporation, and respondents ), MARK HO:VIE FCRNITCRE CO. , ET AL. 1245 1241 Decision and Order agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with any extension of consumer credit or advertisement to aid promote or assist directly or indirectly any extension of con­ sumer credit, as "consumer credit " and "advertisement" are defined in Regulation Z (12 C. R. R 226) of the Truth in Lending Act (Pub. L. 90-321 , 15 D. C. 1601 ct. seq. do forthwith cease and desist from:

1. Failing to disclose the annual percentage rate with an accuracy of one-fourth of one percent computed in accor­ dance with Section 226.5(b) of Regulation Z, as required by Section 226.8(b)(2) of Regulation Z.

2. Failing to disclose the number of payments scheduled to repay the indebtedness, as required by Section 226. 8(b)(3) of Regulation Z.

3. Failing to disclose the due dates of payments scheduled to repay the indebtedness, as required by Section 226. 8(b)(3) of Regulation Z.

4. Failing to use the term "total of payments" to describe the sum of the payments scheduled to repay the indebted­ ness, as required by Section 226. 8(b)(:o) of Regulation Z. 5, Failing to accurately disclose the total of payments, as required by Section 226.8(b)(3) of Regulation Z. 6. Failingto describe the type of any security interest held or to be retained or acquired by the creditor in connection with the extension of credit, as required by Section 226. 8(b) (5) of Regulation Z.

7. Failing to identify the method of computing any un­ earned portion of the finance charge in the event of prepay­ ment of the obligation, as required by Section 226. 8(b)(7) of Regulation Z.

8: Failing to use the term " cash price " as defined in Section 226.2(i) of Regulation Z, to describe the purchase price of the goods, as required by Section 226.8(c)(1) of Regulation Z.

9. Failing to use the term "cash downpayment" to des­ cribe the downpayment in money made in connection with the credit sale, as required by Section 226. 8(c)(2) of Regu­ lation Z.

10. Failing to accurately disclose the amount of the downpayment, as required by Section 226. 8(c)(2) of Regulation 11. Failing to use the term " unpaid balance of cash price to describe the difference between the cash price and the 1246 FEDERAL TRADE COM:IISSION DECISIOXS Decision and Order 82 F. total down payment, as required by Section 226. 8(c)(3) of Regulation Z.

12. Failing to use the term " amount financed to describe the amount of credit extended, as required by Section 226. (c)(7) of Regulation Z.

13. Failing to accurately disclose the amount financed, as required by Section 226. 8(c)(7) of Regulation Z. 14. 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. 15. Failing in any consumer credit transaction or adver­ tisingto make all disclosures determined in accordance with Section 226. 4 and 226.5 of Regulation Z, at the time and in the manner, form, and amount required by Sections 226. 226. 7, 226. 8 and 226.10 of Regulation Z. It is fUI'ther 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 the preparation, creation or placing of advertising, and that respondents secure a signed statement acknowledging receipt of said order from each such person.

Iti:S f'r-Lrther 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 business address and a statement as to the nature of the business or employment in which they are engaged as well as a description of their duties and responsibilities. It isfurther ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing, setting forth in detail thc manner and form in which they have complied with this order. It is further ordered That respondents notify the Commission at least thirty (30) days prior to any proposed change in respon­ dents' business such as dissolution, assignment or sale resulting in the emergence of a successor business, corporate or other­ wise, the creation of subsidiaries or any other change which may affect compliance obligations arising out of this order. SWEETWATER CARPET CORP. 1247 Complaint