Turkey Mountain Estates, Inc

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IN THE MATTER OF TURKEY MOUNTAIN ESTATES, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND TRUTH IN LENDING ACTS Docket C-2570. Complaint, Oct. 8, 1974—Decision, Oct. 8, 1974 Consent order requiring four affiliated Shell Knob, Mo., developers of recreational or retirement home sites, among other things to cease using bait advertising and other deceptive selling practices, and 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 Regulation Z of the said Act. TURKEY MOUNTAIN ESTATES, INC., ET AL. 699 698 Complaint Appearances For the Commission: Michael L. DeBacker.

For the respondents: Robert Stemmons, Stemmons & Hager, Mount Vernon, Mo.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, and the Truth in Lending Act and the implementing regulation promulgated thereunder, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Turkey Mountain Estates, Inc., a corporation; Central Crossing Developers, Inc., a corporation; Lakeside Investment Company, Inc., a corporation; Tomahawk Developers, Inc., a corporation; and E. C. Shafer, individually and as an officer of said corporations;.and J. B. Gum, individually and as an officer of said corporations, with the exception of Central Crossing Developers, Inc., hereinafter sometimes referred to as respondents, have violated the provisions of said Acts, and the implementing regulation 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:

PARAGRAPH 1. Respondent Turkey Mountain Estates, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo. Respondent Central Crossing Developers, Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo.

Respondent Lakeside Investment Company, Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo.

Respondent Tomahawk Developers, Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo.

Respondents E.C. Shafer and J:B. Gum are officers of the corporate respondents. They formulate, direct, and control the acts and practices of the corporate respondents including the acts and practices hereinaf- Complaint 84 F.T.C.

ter set forth. Their address is the same as that of the corporate respondent.

Respondent E.C. Shafer is president of Tomahawk Developers, Inc., secretary and treasurer of Lakeside Investment Company, Inc., Turkey Mountain Estates, Inc., and Central Crossing Developers, Inc., and is on the board of directors of all the corporate respondents. Respondent J.B. Gum is president of Lakeside Investment Company, Inc., and an officer of Tomahawk Developers, Inc., and Turkey Mountain Estates, Inc., and is on the board of directors of these three corporations.

Respondents Shafer and Gum together control 65 percent of the stock of Lakeside Investment Company, Inc., and 1/3 interest in Turkey Mountain Estates, Inc. Respondents each own 1/4 interest in Central Crossing Developers, Inc.

Par. 2. Respondents are now, and for some time last past have been engaged in the advertising, offering for sale, sale and development of recreational or retirement home sites.

Par. 3. In the course and conduct of their aforesaid business, respondents now cause, and for some time last past have caused, a substantial volume of direct mail advertising to be mailed to prospective purchasers located in various States of the United States; and finance home site sales and collect payments from purchasers located in various States of the United States.

Accordingly, all of said respondents have maintained, and do now maintain, a course and conduct of businessin commerce, as “commerce” is defined in the Federal Trade Commission Act. COUNT I Alleging violations of the Truth in Lending Act and the implementing regulations promulgated thereunder, and of the Federal Trade Commission Act, the allegations of Paragraphs One and Two hereof are incorporated by reference in Count I as if fully set forth verbatim. Par. 4. In the course and conduct of their business as aforesaid, respondents regularly extend, and for some time last past have 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. 5. Subsequent to July 1, 1969, respondents, in the ordinary course and conduct of their business and in connection with credit sales as “credit sale” is defined in Section 226.2(n) of Regulation Z, have caused and are causing their customers to execute installment contracts, or contracts for deed and Regulation Z disclosure forms. TURKEY MUOUNLALN tr ssee mm , 698 Complaint Par. 6. By and through the use of these contracts and forms, respondents, in a number of instances:

-1, Have failed to disclose the date on which the finance charge begins to accrue if different from the date of the transaction, as required by Section 226:8(b)(1) of Regulation Z.

2. Have failed to state the due dates or period of payments scheduled ~ to repay the indebtedness, and the sum of such payments, using the term, “total of payments,” as required by Section 226.8(b)(3) of Regulation Z. :

3. Have failed to use the term, “cash downpayment” and “total downpayment,” and “unpaid balance of cash price,” and have failed to give the corresponding disclosures with those terms, as required by Sections 226.8(c)(1), 926.8(c)(2), and 226.8(c)(3) of Regulation Z. 4, Have failed to use the term, “deferred payment price,” and to give the corresponding disclosure with that term, as required by Section 226.8(e)(8) (ii) of Regulation Z.

5. Have failed to disclose the “Finance Charge,” as required by Section 226.8(e)(8)(i) of Regulation Z.

6. Have failed to disclose the amount of any “balloon payment,” and have failed to. use the term “balloon payment,” as required by Section 226.8(b)(3) of Regulation Z.

7, Have failed to disclose the identity of the creditor as required by Section 226.8(a) of Regulation Z.

8. Have failed, on certain periodic statements to make the disclosures, and in the form required by Section 226.8(n) of Regulation Z. 9, Have failed to disclose discount for prompt payment and related disclosures, as required by Section 226.8(0) of Regulation Z. Par. 7. By and through the use of a contract for deed, respondents retain, create, or acquire a security interest, as “Security interest” is defined in Section 926.2(z) of Regulation 7, in real property which is expected or may be expected to be used as the principal residence of the - purchaser. Respondents’ retention or acquisition of a security interest in said real property gives their customers, who are extended consumer credit, as “consumer credit” is defined in Section 226.2(k) of Regulation Z, the right to rescind the transaction until midnight of the third business day following the date of consummation of the transaction or the date of delivery of all the disclosures required by. Regulation Z, whichever is later. oo By and through the use of the aforementioned contract for deed, respondents in all instances since July 1, 1969: a 7 1. Have failed to provide the “Notice of Opportunity to Rescind” to the customer on one side of a separate statement which identifies the Complaint 84 F.T.C.

transaction to which it relates, as required by Section 226.9(b) of Regulation Z. * 2. Have failed to set out the “Effect of Rescission,” Section 226.9(d) of Regulation Z in the manner and form required by Section 226.9(b) of Regulation Z, Par. 8. In the ordinary course of their business as aforesaid, respondents cause to be published advertisements of their home sites, as the term “advertisement” is defined in Regulation Z. These advertisements thereof:

Gi) 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.

Par. 9, 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(c) thereof, respondents thereby violated the Federal Trade Commission Act.

COUNT II 698 Complaint Typical and illustrative of said statements and advertising representations, but not all inclusive thereof, are the following: * * * * * * * You can purchase beautiful site valued at $550.00 for a total of only $50.00. y . y * ‘ * * * * % * A valuable piece of property in Turkey Mountain Estates can now be yours for a total cost to you of only $50.00 by using the enclosed $500.00 voucher. * * * * * * * We are making this offer only to selected families. * * * * * * # Water to Lots.

Paved Roads.

* * * * * * * Electricity.

* 1 a * * * * Air Conditioned Club House.

* * * * * * * Upon inspection of the property, we must ask you to either accept or reject this offer so that our advertising pudget can be adjusted. * * * * * * * Par. 11. By and through the use of said advertisements, and others of similar import and meaning, but not expressly set out herein, respondents have represented and are now representing directly or by implication that:

1. They are making bona fide offers to sell retirement and recreational home sites “valued at $550.00 for a total of only $50.00.” 2. The prices of home sites which are being offered are discount prices available for a limited period of time or to a selected number of people.

3. All home sites which are being offered include paved roads, water and electricity to lot boundaries and use of club house facilities. Par. 12. In truth and in fact:

1. The advertised home sites for “A total of only $50.00,” are not bona fide offers to sell the home sites at the advertised price, but are advertised for the purpose of inducing prospective purchasers to journey to the area to inspect the land. After inducing prospective purchasers to respondents’ sale location, respondents’ sales personnel disparge the advertised $50 lots by acts or words, or both, and attempt to sell or do sell different and more expensive home sites. TLUERKAL TRADE COMMISSION DECISIONS Decision and Order 84 F.T.c, 2. The prices at which home sites are sold are not reduced by the $500 advertising voucher for only a limited period of time or to a selected number of persons, The $500 advertising discount has been offered in the usual and customary operation of the respondents’ business, and purchasers have been allowed to utilize the $500 discount later than the day of the sales presentation.

3. The $50 home sites do not include paved roads, water and electric- Buyers (DO) (DO NOT) intend permanent residence. Respondents have made certain deceptive and misleading statements concerning the aforementioned contract provision, in an attempt to circumvent customer’s right to a notice to rescind, as required by Section 226.9 of Regulation Z.

Par. 14. The acts and practices of the respondents as set forth above, were, and are, all to the prejudice and injury of the public and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act. DECISION AND ORDER issue herein, 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, 698 Decision and Order and waivers and other provisions as required by the Commission’s rules; and The Commission having considered the agreement and having provisionally accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order: 1. Respondent Turkey Mountain Estates, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo. , Respondent Central Crossing Developers, Inc., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo.

Respondent Lakeside Investment Company, Inc., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo.

Respondent Tomahawk Developers, Inc., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Missouri, with its office and principal place of business located at Highway 39, Shell Knob, Mo.

Respondent E. C. Shafer is an officer of the corporate respondents. Respondent J. B. Gum is an officer of the corporate respondents, with the exception of Central Crossing Developers, Inc. They formulate, direct and control the policies, acts and practices of said corporations, and their principal office and place of business is located at the above . stated address.

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 I It is ordered, That respondents Turkey Mountain Estates, Inc. a corporation; Central Crossing Developers, Inc., a corporation; Lakeside Investment Company, Inc., a corporation; and Tomahawk Developers, Inc., a corporation; and their successors and assigns and their officers Decision and Order 84 F.T.C.

and E. C. Shafer, individually and as an officer of said corporations; and J. B. Gum, individually and as an officer of said corporations, with the exception of Central Crossing Developers, Inc., respondents’ agents, representatives and employees, directly or through any corporation, subsidiary, division or other device in connection with the extension of consumer credit or advertisements to aid, promote or assist, directly or indirectly, in the extension of consumer credit, as “consumer credit” and “advertisement” are defined in Regulation Z (12 C.F.R. §226) of the Truth in Lending Act (15 U.S.C. 1601, et seq.), do forthwith cease and desist from: 3 1 3 2 0 0 775 887 1233 133 -1 4 1 3 2 1 0 819 887 1189 49 -1 5 1 3 2 1 1 819 887 24 30 95.022964 1.5 1 3 2 1 2 868 887 128 40 95.026802 Failing5 1 3 2 1 3 1015 890 34 30 97.012871 to5 1 3 2 1 4 1070 892 188 39 96.830521 accurately5 1 3 2 1 5 1278 893 140 34 96.583847 discloses 1 3 2 1 6 1438 896 57 31 96.949402 thes 1 3 2 1 7 1516 897 77 32 96.821617 dates 1 3 2 1 8 1614 908 41 22 96.293221 on5 1 3 2 1 9 1675 900 105 31 96.293221 which5 1 3 2 1 10 1799 902 59 31 96.428520 thes 1 3 2 1 11 1878 902 130 34 96.435745 finance4 1 3 2 2 0 775 936 1232 58 -1 5 1 3 2 2 1 775 936 121 40 96.758904 charges 1 3 2 2 2 909 938 117 40 96.878151 begins5 1 3 2 2 3 1039 942 34 29 97.009918 to5 1 3 2 2 4 1087 950 126 31 94.401459 accrue,5 1 3 2 2 5 1226 953 37 21 96.391411 as5 1 3 2 2 6 1275 945 157 39 96.847519 required5 1 3 2 2 7 1446 947 43 39 96.621819 by5 1 3 2 2 8 1503 947 133 33 93.217323 Sections 1 3 2 2 9 1648 950 187 38 91.616791 226.8(b)(1)5 1 3 2 2 10 1850 953 39 31 93.270927 of5 1 3 2 2 11 1900 954 107 40 91.971268 Regu-4 1 3 2 3 0 775 986 1060 34 -1 5 1 3 2 3 1 775 986 100 33 93.217339 lations 1 3 2 3 2 892 989 33 31 89.908585 Z.5 1 3 2 3 3 1833 999 2 3 1.623161 ,3 1 3 3 0 0 773 1040 1233 97 -1 4 1 3 3 1 0 814 1040 1192 58 -1 5 1 3 3 1 1 814 1040 27 31 95.558723 2.5 1 3 3 1 2 866 1040 129 42 96.611824 Failing5 1 3 3 1 3 1015 1046 35 28 96.695236 to5 1 3 3 1 4 1073 1043 140 34 96.670059 discloses 1 3 3 1 5 1235 1046 58 32 96.747551 thes 1 3 3 1 6 1316 1048 102 32 96.186096 “totals 1 3 3 1 7 1440 1050 38 31 96.979149 of5 1 3 3 1 8 1495 1054 206 37 96.272598 payments,”5 1 3 3 1 9 1723 1064 37 22 96.280937 as5 1 3 3 1 10 1783 1056 156 39 95.701103 required5 1 3 3 1 11 1962 1058 44 40 96.974525 by4 1 3 3 2 0 773 1089 655 48 -1 5 1 3 3 2 1 773 1089 132 33 93.264160 Sections 1 3 3 2 2 922 1093 187 38 89.904205 226.8(b)(3)5 1 3 3 2 3 1126 1096 37 30 96.841957 of5 1 3 3 2 4 1179 1096 197 41 92.364372 Regulations 1 3 3 2 5 1395 1100 33 31 86.594620 Z.3 1 3 4 0 0 769 1142 1234 151 -1 4 1 3 4 1 0 812 1142 1191 51 -1 5 1 3 4 1 1 812 1142 27 30 96.040070 3.5 1 3 4 1 2 864 1142 129 41 95.724617 Failing5 1 3 4 1 3 1013 1147 36 29 96.517136 to5 1 3 4 1 4 1072 1148 187 39 96.331039 accurately5 1 3 4 1 5 1282 1148 140 34 96.331039 discloses 1 3 4 1 6 1444 1151 57 31 96.989067 thes 1 3 4 1 7 1523 1154 150 39 96.401169 number,5 1 3 4 1 8 1696 1160 135 28 96.573906 amounts 1 3 4 1 9 1854 1158 65 31 96.272476 ands 1 3 4 1 10 1940 1159 63 32 96.554062 due4 1 3 4 2 0 771 1191 1231 58 -1 5 1 3 4 2 1 771 1191 95 33 96.712807 dates5 1 3 4 2 2 884 1203 37 21 96.876144 or5 1 3 4 2 3 938 1195 132 38 96.366249 periods5 1 3 4 2 4 1087 1196 37 31 96.150078 of5 1 3 4 2 5 1138 1202 159 35 96.239342 payments 1 3 4 2 6 1313 1200 179 33 96.181831 scheduled5 1 3 4 2 7 1509 1205 35 30 96.617195 to5 1 3 4 2 8 1560 1214 104 30 96.395241 repay5 1 3 4 2 9 1680 1205 57 32 96.968491 thes 1 3 4 2 10 1754 1206 248 43 96.443542 indebtedness,4 1 3 4 3 0 769 1245 942 48 -1 5 1 3 4 3 1 769 1253 37 22 96.946648 as5 1 3 4 3 2 822 1245 157 39 96.476242 required5 1 3 4 3 3 995 1246 44 40 96.253105 by5 1 3 4 3 4 1056 1247 133 41 93.293579 Sections 1 3 4 3 5 1204 1250 189 39 92.374954 226.8(b)(3)5 1 3 4 3 6 1410 1253 37 31 96.974182 of5 1 3 4 3 7 1462 1253 198 40 93.211235 Regulations 1 3 4 3 8 1677 1257 34 31 91.050766 Z.3 1 3 5 0 0 766 1296 1234 192 -1 4 1 3 5 1 0 809 1296 1191 52 -1 5 1 3 5 1 1 809 1297 28 29 80.945641 4.5 1 3 5 1 2 862 1296 129 41 96.217628 Failing5 1 3 5 1 3 1003 1301 36 28 97.004265 to5 1 3 5 1 4 1054 1302 88 29 96.683098 states 1 3 5 1 5 1157 1301 57 31 96.502586 thes 1 3 5 1 6 1229 1302 96 32 96.502586 “cash5 1 3 5 1 7 1339 1304 118 39 96.388573 price,”5 1 3 5 1 8 1471 1306 64 32 96.093025 ands 1 3 5 1 9 1550 1307 116 41 96.083336 failing5 1 3 5 1 10 1679 1311 35 29 97.015533 to5 1 3 5 1 11 1729 1312 88 29 96.722168 states 1 3 5 1 12 1831 1311 60 32 97.001862 thes 1 3 5 1 13 1906 1313 94 31 96.790550 “cash4 1 3 5 2 0 768 1346 1232 52 -1 5 1 3 5 2 1 768 1346 284 41 96.495132 downpayment,”5 1 3 5 2 2 1075 1351 64 31 96.407494 ands 1 3 5 2 3 1162 1351 115 41 96.609177 failing5 1 3 5 2 4 1297 1356 35 29 96.554459 to5 1 3 5 2 5 1354 1357 90 29 96.977051 states 1 3 5 2 6 1466 1356 57 32 96.363426 thes 1 3 5 2 7 1546 1358 139 40 90.986786 “unpaid5 1 3 5 2 8 1708 1360 135 32 96.447639 balances 1 3 5 2 9 1867 1363 37 30 96.471542 of5 1 3 5 2 10 1923 1365 77 30 96.471542 cash4 1 3 5 3 0 766 1398 1231 53 -1 5 1 3 5 3 1 766 1398 118 37 96.724167 price,”5 1 3 5 3 2 898 1409 37 20 96.683212 as5 1 3 5 3 3 947 1400 155 39 95.867569 required5 1 3 5 3 4 1115 1402 44 38 95.867569 by5 1 3 5 3 5 1173 1402 149 33 96.415092 Sections5 1 3 5 3 6 1335 1406 193 40 28.215790 226.8(c)(1),5 1 3 5 3 7 1540 1409 184 37 73.519547 226.8(¢)(2)5 1 3 5 3 8 1738 1412 63 31 93.212601 ands 1 3 5 3 9 1814 1413 183 38 19.491463 226.8(¢)(3)4 1 3 5 4 0 766 1448 301 40 -1 5 1 3 5 4 1 766 1448 37 30 96.446953 of5 1 3 5 4 2 817 1449 199 39 93.185280 Regulations 1 3 5 4 3 1034 1451 33 31 89.374649 Z.3 1 3 6 0 0 762 1500 1235 240 -1 4 1 3 6 1 0 807 1500 1190 53 -1 5 1 3 6 1 1 807 1500 27 30 96.725739 5.5 1 3 6 1 2 859 1500 132 40 96.816391 Failing5 1 3 6 1 3 1012 1505 35 28 96.509811 to5 1 3 6 1 4 1071 1513 59 20 96.858025 uses 1 3 6 1 5 1154 1504 59 32 96.248062 thes 1 3 6 1 6 1235 1508 89 28 96.535789 terms 1 3 6 1 7 1348 1508 141 39 96.012817 “unpaid5 1 3 6 1 8 1513 1509 137 33 96.111382 balances 1 3 6 1 9 1673 1512 38 30 96.111382 of5 1 3 6 1 10 1731 1513 78 31 95.752060 cash5 1 3 6 1 11 1831 1515 109 38 96.262543 price”5 1 3 6 1 12 1963 1519 34 29 96.644943 to4 1 3 6 2 0 765 1549 1230 61 -1 5 1 3 6 2 1 765 1549 151 33 94.516449 describes 1 3 6 2 2 931 1552 58 31 96.889160 thes 1 3 6 2 3 1003 1553 187 34 96.877365 differences 1 3 6 2 4 1204 1556 153 33 96.996025 between5 1 3 6 2 5 1374 1559 77 31 96.808243 cash5 1 3 6 2 6 1466 1560 89 39 96.941589 prices 1 3 6 2 7 1570 1562 65 31 96.917465 ands 1 3 6 2 8 1649 1563 58 31 96.961243 thes 1 3 6 2 9 1721 1564 83 31 96.967018 totals 1 3 6 2 10 1819 1561 176 49 90.300392 downpay-4 1 3 6 3 0 763 1602 1231 59 -1 5 1 3 6 3 1 763 1605 101 34 96.905113 ment,5 1 3 6 3 2 879 1602 65 31 96.768951 ands 1 3 6 3 3 958 1603 115 41 96.840317 failing5 1 3 6 3 4 1085 1608 34 28 97.005844 to5 1 3 6 3 5 1134 1616 60 21 96.933182 uses 1 3 6 3 6 1207 1607 58 31 96.985985 thes 1 3 6 3 7 1279 1611 104 29 96.553787 terms5 1 3 6 3 8 1399 1611 94 30 96.729912 “cash5 1 3 6 3 9 1507 1612 109 38 96.007782 price”5 1 3 6 3 10 1630 1614 63 30 97.008194 ands 1 3 6 3 11 1708 1615 96 31 96.149612 “cash5 1 3 6 3 12 1818 1612 176 49 86.610283 downpay-4 1 3 6 4 0 763 1653 1231 49 -1 5 1 3 6 4 1 763 1653 132 36 94.800392 ment,”5 1 3 6 4 2 924 1664 38 20 94.800392 as5 1 3 6 4 3 988 1656 171 38 96.397995 required5 1 3 6 4 4 1187 1657 45 38 96.834290 by5 1 3 6 4 5 1260 1658 167 33 96.193359 Sections5 1 3 6 4 6 1453 1662 215 39 68.360275 226.8(c)(1),5 1 3 6 4 7 1695 1665 205 37 69.215950 226.8(c)(2)5 1 3 6 4 8 1927 1668 67 31 96.589394 anda 1 3 6 5 0 762 1702 193 38 -1 5 1 3 6 5 1 762 1702 193 38 40.717300 226.8(c¢)(8).3 1 3 7 0 0 760 1755 1231 93 -1 4 1 3 7 1 0 802 1755 1189 52 -1 5 1 3 7 1 1 802 1755 27 30 96.897629 6.5 1 3 7 1 2 853 1755 130 40 96.313728 Failing5 1 3 7 1 3 994 1759 34 28 96.794724 to5 1 3 7 1 4 1041 1757 140 33 96.794724 discloses 1 3 7 1 5 1192 1760 58 31 97.016029 thes 1 3 7 1 6 1263 1761 149 32 96.473434 “finances 1 3 7 1 7 1425 1763 148 40 96.129837 charge,”5 1 3 7 1 8 1585 1775 38 21 96.129837 as5 1 3 7 1 9 1635 1767 155 39 96.672318 required5 1 3 7 1 10 1802 1767 44 40 96.578003 by5 1 3 7 1 11 1861 1768 130 33 96.470291 Section4 1 3 7 2 0 760 1805 734 43 -1 5 1 3 7 2 1 760 1805 223 38 83.907784 226.8(c)(8)(i)5 1 3 7 2 2 999 1808 38 31 96.062386 of5 1 3 7 2 3 1051 1809 198 39 93.261986 Regulations 1 3 7 2 4 1267 1812 33 30 84.629829 Z.5 1 3 7 2 5 1490 1824 4 1 6.497803 :3 1 3 8 0 0 758 1857 1230 96 -1 4 1 3 8 1 0 800 1857 1188 53 -1 5 1 3 8 1 1 800 1857 27 29 91.238945 7.5 1 3 8 1 2 852 1857 129 40 95.310158 Failing5 1 3 8 1 3 996 1861 35 29 96.969398 to5 1 3 8 1 4 1048 1859 140 33 96.493546 discloses 1 3 8 1 5 1204 1861 57 32 96.946510 thes 1 3 8 1 6 1279 1863 175 33 96.888176 “deferred5 1 3 8 1 7 1471 1869 160 36 96.638199 payments 1 3 8 1 8 1647 1868 116 38 96.658310 price,”5 1 3 8 1 9 1780 1879 37 21 96.728859 as5 1 3 8 1 10 1834 1872 154 38 96.237350 required4 1 3 8 2 0 758 1905 760 48 -1 5 1 3 8 2 1 758 1905 43 40 96.826584 by5 1 3 8 2 2 818 1907 134 32 93.292564 Sections 1 3 8 2 3 968 1910 233 38 31.328232 226.8(c)(8)(ii)5 1 3 8 2 4 1218 1913 37 30 97.018921 of5 1 3 8 2 5 1270 1913 199 40 90.933739 Regulations 1 3 8 2 6 1485 1916 33 31 89.189575 Z.3 1 3 9 0 0 756 1956 1232 97 -1 4 1 3 9 1 0 797 1956 1191 55 -1 5 1 3 9 1 1 797 1956 28 31 95.845085 8.5 1 3 9 1 2 850 1957 130 41 96.404045 Failing5 1 3 9 1 3 992 1962 34 28 96.404045 to5 1 3 9 1 4 1041 1969 59 22 96.554565 uses 1 3 9 1 5 1114 1961 58 31 96.775497 thes 1 3 9 1 6 1186 1965 87 28 96.985443 terms 1 3 9 1 7 1287 1963 176 33 96.552238 “deferred5 1 3 9 1 8 1477 1971 160 34 96.513428 payments 1 3 9 1 9 1650 1968 116 39 96.975845 price,”5 1 3 9 1 10 1781 1980 36 21 96.816566 as5 1 3 9 1 11 1832 1972 156 39 96.413651 required4 1 3 9 2 0 756 2007 1065 46 -1 5 1 3 9 2 1 756 2007 43 39 96.502899 by5 1 3 9 2 2 817 2007 133 33 93.287994 Sections 1 3 9 2 3 965 2010 234 38 51.440956 226.8(c)(8)(ii)5 1 3 9 2 4 1216 2013 37 31 96.976860 of5 1 3 9 2 5 1268 2013 199 40 92.681709 Regulations 1 3 9 2 6 1483 2016 34 31 89.071587 Z.3 1 3 10 0 0 748 2058 1241 402 -1 4 1 3 10 1 0 796 2058 1192 49 -1 5 1 3 10 1 1 796 2058 27 31 96.895668 9.5 1 3 10 1 2 847 2058 138 41 96.258339 Failing,5 1 3 10 1 3 1007 2061 32 30 96.575645 in5 1 3 10 1 4 1060 2071 64 30 96.959045 any5 1 3 10 1 5 1147 2064 203 32 96.020111 transactions 1 3 10 1 6 1374 2066 124 41 96.647186 arising5 1 3 10 1 7 1518 2067 32 31 96.734268 in5 1 3 10 1 8 1571 2068 59 32 97.007683 thes 1 3 10 1 9 1651 2069 114 33 96.908989 futures 1 3 10 1 10 1786 2071 33 31 96.655312 in5 1 3 10 1 11 1842 2073 104 31 96.576973 which5 1 3 10 1 12 1968 2084 20 21 96.935196 a4 1 3 10 2 0 754 2110 1235 47 -1 5 1 3 10 2 1 754 2112 170 28 96.209572 customers 1 3 10 2 2 940 2110 59 32 96.709320 has5 1 3 10 2 3 1016 2112 58 31 96.827072 thes 1 3 10 2 4 1092 2112 91 40 97.007378 rights 1 3 10 2 5 1200 2117 34 28 97.007378 to5 1 3 10 2 6 1252 2115 140 40 96.841515 rescind,5 1 3 10 2 7 1411 2127 37 21 96.656685 as5 1 3 10 2 8 1465 2118 160 39 96.253006 provided5 1 3 10 2 9 1643 2120 32 31 96.946198 in5 1 3 10 2 10 1694 2120 132 33 96.516342 Sections 1 3 10 2 11 1844 2124 90 31 94.463890 226.95 1 3 10 2 12 1952 2124 37 32 96.734428 of4 1 3 10 3 0 754 2158 1231 55 -1 5 1 3 10 3 1 754 2158 200 41 93.288940 Regulations 1 3 10 3 2 973 2161 31 39 93.060097 Z,5 1 3 10 3 3 1023 2165 35 29 96.987068 to5 1 3 10 3 4 1075 2164 138 38 96.492691 provides 1 3 10 3 5 1230 2165 58 32 96.878670 thes 1 3 10 3 6 1306 2170 169 29 96.408157 customers 1 3 10 3 7 1492 2169 80 31 96.804970 with5 1 3 10 3 8 1589 2170 59 32 97.017998 thes 1 3 10 3 9 1665 2172 108 31 96.984291 notices 1 3 10 3 10 1791 2173 38 30 96.700485 of5 1 3 10 3 11 1844 2174 90 39 96.018326 rights 1 3 10 3 12 1950 2178 35 28 96.018326 to4 1 3 10 4 0 751 2211 1233 52 -1 5 1 3 10 4 1 751 2211 141 38 96.567551 rescind,5 1 3 10 4 2 910 2212 32 30 96.623352 in5 1 3 10 4 3 959 2213 57 30 96.635872 thes 1 3 10 4 4 1033 2213 87 31 96.391243 forms 1 3 10 4 5 1139 2215 63 31 96.588409 ands 1 3 10 4 6 1219 2226 139 22 96.655586 manners 1 3 10 4 7 1375 2219 159 38 96.548492 provided5 1 3 10 4 8 1552 2220 31 31 96.841499 in5 1 3 10 4 9 1602 2221 73 31 96.632820 that5 1 3 10 4 10 1693 2221 132 33 96.622421 Sections 1 3 10 4 11 1843 2225 91 38 96.944199 prior5 1 3 10 4 12 1949 2229 35 28 96.497124 to4 1 3 10 5 0 751 2263 1232 45 -1 5 1 3 10 5 1 751 2263 261 31 96.737610 consummation5 1 3 10 5 2 1033 2264 38 31 96.990166 of5 1 3 10 5 3 1087 2265 58 31 96.386139 thes 1 3 10 5 4 1165 2268 214 39 96.382812 transaction,5 1 3 10 5 5 1400 2269 63 31 96.795128 ands 1 3 10 5 6 1484 2270 32 31 96.303001 in5 1 3 10 5 7 1536 2272 193 32 96.303001 connections 1 3 10 5 8 1748 2274 181 33 96.625389 therewith5 1 3 10 5 9 1948 2279 35 29 96.673126 to4 1 3 10 6 0 749 2313 1233 52 -1 5 1 3 10 6 1 749 2313 138 37 96.469162 provides 1 3 10 6 2 909 2323 18 21 96.527016 a5 1 3 10 6 3 946 2316 152 37 96.527016 questions 1 3 10 6 4 1118 2317 138 40 96.935287 seeking5 1 3 10 6 5 1275 2328 19 21 96.631149 a5 1 3 10 6 6 1312 2322 184 30 96.318153 statements 1 3 10 6 7 1515 2321 32 41 96.790863 in5 1 3 10 6 8 1567 2322 141 41 96.831345 writing,5 1 3 10 6 9 1728 2334 41 21 96.705345 on5 1 3 10 6 10 1788 2335 20 21 96.705345 a5 1 3 10 6 11 1828 2330 154 35 96.658829 separate4 1 3 10 7 0 748 2362 1233 51 -1 5 1 3 10 7 1 748 2362 97 39 96.546684 form,5 1 3 10 7 2 859 2364 214 42 96.417091 designating5 1 3 10 7 3 1087 2367 152 32 96.656471 whether5 1 3 10 7 4 1254 2379 38 21 96.599670 or5 1 3 10 7 5 1305 2373 59 28 96.980286 not5 1 3 10 7 6 1379 2371 70 31 96.207001 said5 1 3 10 7 7 1465 2375 168 29 96.388931 customers 1 3 10 7 8 1648 2378 136 35 96.084938 expects5 1 3 10 7 9 1799 2379 35 28 95.929520 to5 1 3 10 7 10 1850 2386 60 22 95.929520 uses 1 3 10 7 11 1924 2378 57 32 96.868179 thea 1 3 10 8 0 748 2412 1231 48 -1 5 1 3 10 8 1 748 2412 46 31 95.893303 lots 1 3 10 8 2 808 2423 37 21 95.893303 as5 1 3 10 8 3 860 2414 53 32 96.963364 his5 1 3 10 8 4 927 2415 158 40 96.975021 principals 1 3 10 8 5 1099 2417 92 39 96.573250 places 1 3 10 8 6 1207 2418 37 31 96.969437 of5 1 3 10 8 7 1255 2420 182 39 96.890884 residence,5 1 3 10 8 8 1453 2425 34 27 96.856262 at5 1 3 10 8 9 1501 2422 74 32 96.195732 that5 1 3 10 8 10 1591 2424 79 31 96.195732 times 1 3 10 8 11 1685 2434 38 21 96.831810 or5 1 3 10 8 12 1736 2424 33 32 96.406395 in5 1 3 10 8 13 1783 2426 59 31 96.406395 thes 1 3 10 8 14 1857 2426 122 34 96.842850 future. TURKEY MUUN'TAIN BSLALED, LINU., 144 mae a 698 Decision and Order 10. Failing to describe the amount of any “balloon payment” and failing to use the term “balloon payment,” as required by Section 226.8(b)(3) of Regulation Z. - ‘ 11. Failing to disclose the identity of the creditor on the instrument or statement on which required disclosures are made, as required by Section 226.8(a) of Regulation Z. 12. Failing to disclose the annual percentage rate and the period in which payment must be made to avoid late charges on any periodic statement and failing to transmit such a statement in a form which the customer may retain, as required by Section 226.8(n) of Regulation Z.

13. Failing to disclose discount for prompt payment and related disclosures, as required by Section 226.8(0) of Regulation Z. 14. 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, 226.9 and 226.10 of Regulation Z.

15. Stating in any advertisement 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: (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 periods 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.

Il It is ordered, That respondents Turkey Mountain Estates, Ine., a corporation; Central Crossing Developers, Inc., a corporation; Lakeside Investment Company, Inc., a corporation; and Tomahawk Developers, Inc., a corporation, and their successors and assigns and their officers and E. C. Shafer, individually and as an officer of said corporations; and J. B. Gum, individually and as an officer of said corporations, with the exception of Central Crossing Developers, Inc., respondents’ agents, representatives and employees, directly or through any corporation, Decision and Order 84 F.T.C.

subsidiary, division or other device in connection with the advertising, offering for sale, sale or distribution of recreational or retirement home sites or any other product in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Using any advertising, sales plan or procedure involving the use of false, deceptive or misleading statements or representations designed to obtain leads or prospects for the sale of other real property.

2. Discouraging the purchase of, disparaging in any manner or refusing to sell, any real property advertised by respondents. 3. Advertising or offering any property or products for sale for the purpose of obtaining leads or prospects for the sale of different property or products unless the respondents maintain an adequate and readily available stock of said property or products. 4. Representing, directly or indirectly, that any real property or services are offered for sale when such is not a bona fide offer to sell said real property or services.

5. Representing, directly or indirectly, that an advertising allowance voucher or discount is offered on the purchase of any real property unless such an allowance is actually a reduction in the advertising cost of the respondents.

6. Representing, directly or indirectly, or by implication, in any form of advertisement that a prospective purchaser may purchase an “advertising lot,” or other section of land at a discounted or reduced price, unless in immediate connection with such representations respondents clearly and conspicuously disclose the improvements or benefits included in the price of such lots, or the lack thereof, if such improvements or benefits differ in any respect with the improvements or benefits which are advertised in connection with the remainder of the lots in the land developments. 7. Misrepresenting, directly or indirectly, or by implication, the purpose or effect of any provision in the contract for sale, or other forms, completed at the time of sale or thereafter, whereby the purchasers are required to declare their intention as to establishing a permanent or principal place of residence on the land. 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 or sale of any real property, or 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.

NORTHWEST MARINE INDUSTRIES, INC. 79 709 Complaint It is further ordered, That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondents 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 corporations 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 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 is further 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 the manner and form in which they have complied with this order.