National Payment Network, Inc.

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IN THE MATTER OF NATIONAL PAYMENT NETWORK, INC.

CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SEC. 5(A) OF THE FEDERAL TRADE COMMISSION ACT Docket No. C-4521; File No. 132 3285 Complaint, May 4, 2015 – Decision, May 4, 2015 This consent order addresses allegations that National Payment Network (“NPN”) deceptively advertised its add-on biweekly auto payments plans. NPN offers auto payment programs to consumers financing the purchase of a motor vehicle. According to the complaint, NPN advertised that consumers enrolling in its biweekly payment program would save money on their total payments, often specifying a certain amount of savings in interest. However, NPN failed to disclose hidden fees and failed to disclose the total amount of these fees. The complaint alleges that NPN’s failure to disclose these facts is a deceptive practice in violation of Section 5 of the FTC Act. The order requires NPN to provide those eligible customers that participated in the biweekly payment program for at least 48 months with a full refund. The consent order further bars NPN from advertising any payment program unless it can substantiate any representations about its benefits, performance or efficacy. Participants For the Commission: Daniel Dwyer, Bradley Elbein, and Ioana Rusu.

For the Respondent: Joel Winston, Hudson Cook LLP. COMPLAINT The Federal Trade Commission, having reason to believe that National Payment Network, Inc., a corporation, also known as NPN, Inc. (“Respondent”), has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Respondent National Payment Network, Inc. is a California corporation, with its principal place of business at 1875 S. Grant Street, Suite 250, San Mateo, CA 94402. 2. Respondent has advertised, marketed, distributed, offered for sale, or sold a “Biweekly Payment Program” (hereinafter, the NATIONAL PAYMENT NETWORK, INC. 1719 Complaint “payment program”) to consumers financing the purchase of automobiles throughout the United States. 3. The acts and practices of the Respondent alleged in this complaint have been in or affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act. BUSINESS PRACTICES 4. Since at least 2004 and until at least December 31, 2013, Respondent advertised, marketed, and sold its payment program through a network of authorized auto dealers. Respondent also advertised its payment program on its website, www.nationalpayment.net. Under the payment program, consumers make biweekly payments on their auto financing contract to the Respondent rather than to their financing entity (e.g., a finance company or a bank), and the Respondent makes monthly payments to the financing entity on the consumers’ behalf. Respondent touts the savings the payment program will provide to consumers, but fails to disclose that the significant fees in connection with the program can offset any savings. Respondent also fails to disclose the total amount of these fees, which add up to more than $775 on a standard five-year auto financing contract.

ENROLLMENT IN RESPONDENT’S PROGRAM 5. Most consumers learned about Respondent’s payment program at the automobile dealership, after they selected a vehicle to buy. When purchasing a vehicle, consumers sign the legal paperwork to close the transaction with the dealer’s Financing and Insurance (“F&I”) department. In many instances, an F&I employee offers other products and services that can be “added on” to the financing contract; these are commonly called “add-on products and services.” Respondent’s payment program was one such add-on service.

RESPONDENT’S PAYMENT STRUCTURE AND FEES 6. Under most auto financing contracts, consumers pay the financing entity a specific amount on a monthly basis. Under Respondent’s payment program, Respondent debits money from a consumer’s bank account on a biweekly basis. The first biweekly NATIONAL PAYMENT NETWORK, INC. 1720 Complaint debit is in the amount of one full monthly payment. Subsequent biweekly debits consist of half of the consumer’s monthly payment, plus a processing fee. Respondent pays the financing entity on the consumer’s behalf on a monthly basis. 7. Under a traditional monthly payment plan, consumers make 12 monthly payments each year to their financing entity. Under Respondent’s payment program, consumers make 26 biweekly payments each year to the Respondent, which then makes a total of 13 monthly payments to the consumer’s financing entity. Thus, under the payment program, consumers make one additional payment a year as compared to a traditional monthly payment plan.

8. Respondent’s promotional materials tout the biweekly payment program’s ability to save consumers money through these additional payments, but do not disclose that fees it charges in connection with the biweekly payment program can offset any savings. Specifically, Respondent charges at least three fees: o Respondent charges every consumer a “Deferred Enrollment Fee” of $399. Respondent collects a portion of this fee from consumers during the first month of the contract. Respondent deducts the remainder of the enrollment fee from the extra payments made by consumers in the early years of the program by paying biweekly.

o In addition to the $399 enrollment fee, in many instances, Respondent charges a $25 “cancellation fee.” Respondent has often charged consumers this fee even when they “cancelled” because they had completed Respondent’s biweekly payment program or had finished paying off their financing contract. o Respondent also adds a processing fee to every debit from consumers’ banks accounts. The fee is currently $2.99 per debit, but has ranged from $1.95 up to $2.99 per debit in prior years. Over the life of a standard five-year auto financing contract, a $2.99 per-debit fee amounts to more than $350.

NATIONAL PAYMENT NETWORK, INC. 1721 Complaint 9. These fees total an average of $775 on a standard five-year auto financing contract. Nowhere does Respondent disclose this fact.

RESPONDENT’S SAVINGS CLAIMS 10. Respondent disseminated or caused to be disseminated brochures and videos promoting the payment program to consumers by providing such materials to the auto dealers that sell its payment program. Respondent also promoted its biweekly payment program on its website, www.nationalpayment.net. 11. Two of Respondent’s brochures are attached as Exhibits A and B. The brochures both contain the following statements and depictions:

“Our biweekly payment options have helped thousands of customer [sic] save money on their car loan and achieve their long-term financial goals.”

….

“Bi-Weekly payments can help you:

o Save money on your loan o Match payments to paychecks o Simplify your budgeting o Pay off your loan faster”

….

“PROGRAM BENEFITS o Save money on your loan o No up-front costs o Pay off your loan faster o No more writing or mailing checks o Minimize the impact of vehicle depreciation o Simplify your finances”

….

NATIONAL PAYMENT NETWORK, INC. 1722 Complaint Thus, Respondent’s advertising materials claimed that consumers who enrolled in the biweekly payment program would save money on their loans, and even demonstrated the specific amount of interest savings that a consumer could achieve under certain circumstances. Respondent failed to disclose, however, that in numerous instances, consumers would not achieve savings with Respondent’s program due to Respondent’s significant fees, amounting to more than $775 on the average contract. On the contrary, depending on consumers’ principal amount, interest rate, and number of payments, in many instances consumers paid more money than they would have under a traditional monthly payment program.

12. In addition, Respondent provided auto dealers authorized to sell its biweekly payment program with marketing tools and other dealer training materials instructing dealers on how to market and sell Respondent’s payment program. One such document is a Dealer Reference Guide, attached as Exhibit C. Respondent’s Dealer Reference Guide repeatedly states that consumers will experience “reduced interest charges” by enrolling in the biweekly payment program without disclosing that numerous consumers do not experience savings overall and may even end up paying more than they would under a traditional monthly payment program. For example, Respondent represented the following:

NATIONAL PAYMENT NETWORK, INC. 1723 Complaint SAVINGS EXAMPLES The Biweekly Payment Plan allows consumers to customize the way they make their payments. The result is a loan with reduced interest charges, a lower effective interest rate, a shorter term, and increased equity. 13. Respondent’s reference guide also encouraged dealers to use Respondent’s online calculator to show consumers how much they can save by enrolling in the biweekly payment program. Dealers were instructed to enter the customer’s loan details into the calculator in order to “calculate savings” and generate a “customized savings report.” The online calculator appears as follows in the reference guide:

Respondent’s online calculator calculated the specific interest savings each consumer could achieve, but failed to disclose that the specific savings amount would be reduced or even offset by Respondent’s significant fees. Only in the small print below the calculator did Respondent state, “Depending on the loan terms, in some cases fees charged to borrower may exceed the ‘Interest Savings’.”

NATIONAL PAYMENT NETWORK, INC. 1724 Complaint 14. Consumers enrolling in Respondent’s biweekly payment program were presented with NPN biweekly calculator-generated savings calculations by auto dealers. For example, one consumer received a document labeled “NPN Biweekly Calculator,” attached as Exhibit D. The document represents that the consumer will achieve an interest reduction of $256. Only in the small print below the calculator does Respondent disclose: “Interest Reduction is not a total savings figure; in some cases the fees charged to borrower may exceed the Interest Reduction.” FEDERAL TRADE COMMISSION ACT VIOLATIONS COUNT I FAILURE TO DISCLOSE MATERIAL INFORMATION ABOUT FEES 15. Through the means described in Paragraphs 10-14, Respondent has represented, expressly or by implication, that consumers who enroll in the biweekly payment program will save money.

16. When making the representation described in Paragraph 15, Respondent has failed to disclose or failed to disclose adequately that in many instances, consumers do not save any money due to Respondent’s fees, which amount to hundreds of dollars.

NATIONAL PAYMENT NETWORK, INC. 1725 Complaint 17. These facts would be material to consumers in their decision to enroll in Respondent’s biweekly payment program offered for sale in the advertisements. In light of the representation made, the failure to disclose this fact, or to disclose this fact adequately, was, and is, a deceptive practice. COUNT II FAILURE TO DISCLOSE PROGRAM EFFECTS 18. Through the means described in Paragraphs 10-14, Respondent has represented, expressly or by implication, that consumers who enroll in the biweekly payment program will save a specific amount in interest.

19. When making the representation described in Paragraph 18, Respondent has failed to disclose or failed to disclose adequately that numerous consumers do not achieve savings overall.

20. This fact would be material to consumers in their decision to enroll in Respondent’s biweekly payment program offered for sale in the advertisements. In light of the representation made, the failure to disclose this fact, or to disclose this fact adequately, was, and is, a deceptive practice.

21. The acts and practices of Respondent as alleged in this complaint constitute unfair or deceptive acts or practices, in or affecting commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

THEREFORE, the Federal Trade Commission this fourth day of May, 2015, has issued this complaint against Respondent. By the Commission.

NATIONAL PAYMENT NETWORK, INC.

National Payrnert Network is one of the nation’s leading acimirestrators of loan acceleration programs. To dete, NPN has successfully processed payments tbr approndmately $4 bition in consumer loan values. Our biweekly payment options heave helped thousands of customers save money on their car town and achieve their fongterm thancial goals National Paymert Network partners with some ofthe strongest financial institutions in the nation. These partnerships allow NPN to ofer the most secure, accurate and reliable payment processing services available These processing partners professionally control the entire ACH process tom initiation to settienent. Your funds are held and processed individually, ensuring Ml FDIC protection of your gorount. You can rest easy knowtng that your payments are hancied securely and accurately for the duration of your loan, BI-WEEKLY PAYMENT OPTION Abi-weekly payment option allows you to simplity your finances and build equity in your vehicle. Instead of making monthly payments, you wal make a halt payment everytwo weeks, This payment pattern vill generate addticnal payments over time ard accelerate the payott of your loan or lease Naticnal Paymert Netwerk is the leading adninistrater of biweekly payment plans for the automotive industry. We also provide our customers the financial benefit and convenience of the program for mortgages, boats, RV's and student loans PROGRAM BENEFITS 1B Save money on your loan No upfront costs 1B Payoff your loan faster 1B No more wilting oF railing checks:

1B Mnirrizethe impact of vehicle depreciation 1B Sierplify your finances:

Complaint EXHIBIT A NATIONAL PAYMENT npninc NETWORK Who do! contact with questions about my account? 888.744.2977 supp [email protected] THE Dioon me ae Am may Of tie DHeweh Y PaymentOpton Name D De pUn's Boon ek Y Ag AMO NT IDE MMe On tale, Deve ‘voTpHONE, CONAIMO NE, CRN He eG lie MIRON ©2010 Natovai Payment he WOM, Wo NATIONAL PAYMENT npninc NETWORK AUTOMOTIVE EXAMPLE $30,000 loa PR — 6 Yew eee Terms Payments Paynerts Increased equty $2,259 w in4 years MORTGAGE ACCELERATION PROGRAM $250,000 loan ~ 8% APR — 30 Years [a eet Temms Payments Paymerts Le SM iteret ($64,158 7 $0 | ‘These examples ane for Busratve purposes nly. This brochure bs a surrerery of the E1-WWeakcly Payment program, Petar 8 the fan's Bi-Weekly Plan Agrearnent for turtwr cheats, barvest cho fipttons. conditions .chacioa.res and liritwtens NATIONAL PAYMENT npninc NFTWORK Accelerate Your Payments Accelerate Your Life me in help y to paycheck mplfy your budgeting ay off your loan faster Ask your dealership how to enroll today! FREQUENTLY ASKED QUESTIONS Q: What if | plan to sell or trade in my car early? A: This payment option helps you pay off your loan or lease taster, ultimately improving your financial position when you trade4nor se your verice. Q: Are there additional benefits? As You can simplify your finances and budgeting with Convenient, more trequert payments. Even better, Gil bi-weekly payments are electronic so you no longer have to wwite or mall checks.

: Is there a cost to enrol? A: Yes, but there is no up-tont cost to you. AN program fees are simply deducted from the prepayments made while onthe program @: How does paying bivieekty pay off my Joan sooner? A: By deducting half of your monthly paymert every {vo weeks, you wil gradually make extra payments on your vehicle As @ result, your loan or lease is typically paid off six or more morths faster. Simply ask the destership for your own detailed analysts Q: Ist safe? A: Absolutely. NPN partners wth leading financial institutone and employs the industry's best technology and barking prectices to ensurethe security of your paymerts. You can feel secure knowing that your bi-weekly plan is handled vath professionalism and accuracy Q: What happens after | enrol? 2 Once enrolled, you will receive a welcome letter in the mail confirming your enrollment. If you ever need to make any changes or cancel the plan for ony reason, amply contact NPN anda tiendly ‘customer Support represeritetive will assist you. Ask your dealership how to enroll today! NATIONAL PAYMENT NETWORK, INC.

A bi-weekly payment option allows you to simplify your finances and build equity in additional payments over time and ecelerate the payoff of your loan or lease. \National Paymont Notwork is the loading administrator of bi-weekly payment plans for @ automotive industry, We also provide our customers the financial benefit and onvenience of the program for mortgages, , RV's and student loans, PROGRAM BENEFITS Save money on your loan No up-front costs Pay off your loan faster No more writing or mailing checks Minimize the impact of vehicle depreciation Simplify your fnances National Payment Network is one of the nation’s leading administrators of loan acceleration programs. To date, NPN has Successfully processed payments for approximately $4 billion in consumer loan values. Our biweekly payment options have helped thousands of customer save money on their car loan and achieve their long-term financial goals.

National Payment Network partners with some of the strongest financial institutions in the nation. These partnerships allow NPN to offer the most secure, accurate and teliable payment processing services available.

There processing partners professionally control the entire ACH process from initiation to setiement. Your funds are heid and processed individually, ensuring full FDIC protection of your account. You can fest easy knowing that your payments are handled securely and accurately for the duration of your loan.

Complaint EXHIBIT B NATIONAL PAYMENT npninc NETWORK These enarpes ave for Maratve pupones ony Ths Drocrwe m a sorenary of Pe B-Wveeniy Payers payer. Meter to Pe parle Be Wieeely Agreement ti titer oetaln benefit cencrctone. COnStOne Cxcoa ren ard reaons NATIONAL PAYMENT npninc NETWORK Who do! contact with ae about my account? 888.744.2977 [email protected] Thee Srocrare © @ serenary Of Bre Bi-weunty Payment Option Rather to te plan's Bi-Weekly Agroementtor hmer Getaen berett descrotons condtons. daciosures and lntatons © 201) Nateral Payment Network Ine.

NPR Boch Me: (0013) FREQUENTLY ASKED QUESTIONS Q: What if | plan to sell or trade in my car carly? A: This payment option helps you pay off your loan oF lease faster, ultimately improving your financial position when you trade-in of soll your veticie Q; Are thore additional benofits? A: You can simplify your finances and budgeting with convenient, more frequent payments. Even better, all bi-weekly payments are olectronic so you NO longer have to write or mail checks. Q: Is thoro a cost to envoll? A: Yes, but there is no unetront coal to you Al program foes are simply deducted from the Prepayments made while on the program, Q: How does paying biwoekly pay off my toan sooner? A: By deduction half of your monthly payment every twoweeks, you will gradually make extra paymonts, on your vehicle, As a result your loan or lease ts typically paid off six or more months faster. Simply ask the dealership for you own detated analysis.

Q: Is it safe? A: Absolutely. NPN partners with leading financial institutions and employs the industry's best technology and banking pracices to ensure the Security of your payments, You can fee! secure knowing that your biewoekly plan is handled with professionalism and accuracy.

Q: What happens after! onroll? A: Once enrolled, you wil receive 4 welcome letter in the mad confirming your enrotiment. If you ever Need to make any changes or cancel the plan for any reason, sinply contact NPN and a friendly customer support representative wil assist you. Ask your dealership how to enroll today! Accelerate Your Payments.

Accelerate Your Life.

Bi-Weekly payments can help you:

* Save money on your loan * Match payments to paychecks * Simplify your budgeting * Pay off your loan faster Ask your dealership how to enroll:

today! NATIONAL PAYMENT NETWORK, INC. 1728 Complaint EXHIBIT C NATIONAL PAYMENT mpniNc NETWORK www.nationalpayment.net Boost F&I Profits Reduce Trade-in Cycles Online Reporting & Tracking Full Customer & Dealer Support Portal: portal.nationalpayment.net Dealer ID:

Password: | | NATIONAL PAYMENT NETWORK, INC. 1729 Complaint EXHIBIT C TABLE OF CONTENTS Pregvanns Cer bene 96:0 510.04 0.44: 05:9 00 5900-0 0880's a:ninie vegmeens 2 Selling Poateres ... ocecgngecssekle eae ons eewes 90 ROE reese e990 Sy Savieage Trcnsraphes < aiciop'e <6 shown views s'visinin é t0.0\9:0,019)8 + enews ioeinie's sarge 7 Custamer Prosantations) «<:s:1nje0sss geew est sceyeesnnew ss seiseesss .8 Enrolling Casters esis so cesiges o's vas ¢ opivnwer + Seas snewen se lo Customer Enrollment Form ....... 6.5666 e cece esse eeeeee icine eo " Customer Welcome Letter «42000000000 csensneccewopecegengeene 12 Cvarcemting CUfScHons: essa sic isvicicis & sain, 6's seiwieio'ys s winigiy 6's i. 8 Using the Online Calculator . . ee ec osae 14 Using the Online Reporting Tools ............. 666.5 e cee e eens is © 2007 National Payment Network, inc PAGE |

NATIONAL PAYMENT NETWORK, INC. 1732 Complaint EXHIBIT C SELLING FEATURES How It Works NPN is the nation’s leading edministrator of biweekly payment programs. NPN partners directly with leading financial institutions, including Wells Fargo Bank and/or M&I Bank, to ensure the security of all consumer funds transfers. The biweekly payment program is sold to customers directly through the F& department at the time of purchase, Customers that enroll in the program will enjoy the following benefits: Match the ciming of the vehicle payments to their paycheck cycle. © Payoff the loan faster and reduce interest charges. © Build vehicle equity faster and improve their trade-in position. Smaller half payments every 2 weeks are easier to manage. Making half monthly payments every 2 weeks effectively makes | extra monthly payment each year (52 weeks per year = 26 half payments = 13 payments). Best of all there are no fees collected at the time of enrollment, Administration fees are built into the biweekly debits and paid over time. Dealer Benefits Need to make room in the deal to sell product? Extend the loan term from 60 to 66 month and keep the payments the same. Then simply show the customer that dy signing up for she biweekly payment plan the loan is still paid off in 60 months. This will create more revenue in the deal to sell the customer a warranty, gzp policy, alarm. etc, The result is more profit for F&! and a happier customer, Customer wants lower payments? Simply extend the loan term from 60 to 66 months to lower the monthly payments. Next, use the biweekly calculator to show how the biweekly payment plan will have their 66 month loan paid off in 60 months. With this approach, the customer has manageable biweekly payments and the loan is sti paid off in 60 months.

@ 2007 National Payment Network, ine m@ PAGE 4 NATIONAL PAYMENT NETWORK, INC. 1733 Complaint EXHIBIT C SELLING FEATURES Looking to reduce your defaults? With NPIN’s biweekly payment program, customers actually make their biweekly payments well before the funds are Gue te the lender. By helping customers make payments in advance, the biweekly program helps ensure that loans post on time anc late payments are avoided. Want a repeat retail customer sooner? Because customers prepay their loan balance and accelerate their payoff, dealers see fewer negativeequity situations and can eliminate upside-down duyers. The biweekly payment program puts customers in a financial position te trade-in their vehicle sooner, Want a repeat lease customer sooner? Lease customers who sign up for the biweekly plan wil! satisfy the lease months earlier. This aliows customers to come back and lease a new car several months sooner. Want to make your advertising stand out from your competition? Make your advertising stand out from your competition by offering lower biweekly payments. Quote a $225 biweekly payment instead of a $450 monthly payment. Made no F&1 profit on the Credit Union “one pay” deals? Wiat this program, dealers can make commissions on Credit Union and Banks “one pays” by selling them our biweekly program. Enter the customers loan information into our biweekly calculator and show the customer how they can build equity, reduce interest charges and pay off their loan sooner by signing up for the NPN biweekly payment program Need a lower effective rate to close the deal? Enter your best rate into our biweekly calculator and show your customer haw the biweekly program can reduce interest charges and create a lower “effective rate”. Although not an APR this lower rate could beat your competition's rate and help close the deal. The “Effective Rate” is calculated by applying the percent decrease in interest charges to the actual interest rate. © 2007 National Payment Network, Inc ® PAGE S$

NATIONAL PAYMENT NETWORK, INC. 1736 Complaint EXHIBIT C CUSTOMER PRESENTATIONS Customer Presentation | F&I Manager:

Ms. Customer, since you agree that our service agreement is obviously a valuable thing to have, shall we add it to your vehicle? Customer:

| would really like the service agreement, but | just can't afford higher payments and | really do not want a loan for longer than 60 months, F&l Manager:

| completely understand. What | think would make sense for you is a biweekly payment option. With this program, we slightly extend the term out to 66 months to lower your monthly payment amount. Then we can add the service contract and set you up with a biweekly payment option that will still payoff your foan in 60 months, Customer:

Okay, if | can still have the loan paid off in 60 months, then that sounds great. I'¢ love to have the Service agreement.

Simply extend the loan to a 66 month term while keeping the payment amount the same. Now include the service contract, and then sign up the customer for the Biweekly Payment Plan to reduce the term back down to 60 months. Finally, be sure to review the debit schedule and program fees. By offering the Biweekly Payment Plan to your customer, you were also able to easily up-sell a service contract.

© 2007 National Payment Network, Ine @ PAGE 8

NATIONAL PAYMENT NETWORK, INC. 1738 Complaint EXHIBIT C ENROLLING CUSTOMERS ft important that you follow these steps to ensure proper esvollment in the Biweekly Payment Plan: (1) Enter Customer Information:

During the customer's enroliment, you will be prompted to enter the customer's banking details (account number and routing number) and the program start dates. (2) Review Program Details:

Review the debit dates with the customer and explain that they may still receive monthly statements or payment coupons: however they do not need to make the payments on their own, The biweekly plan will handle their payments for them, The statements or coupons they receive can simply be filect away.

(3) Review the Enrollment Fee:

Explain that although there is no up-front cost to enroll in the program. there is an enrollment fee that is deducted from the prepayments that are made while on the biweekly payment plan. Half of the first full Cebit is applied to this fee. (4) Customer's Signature:

Make sure the customer signs section 5 of the Enrolment Form, (5) Voided Check:

Be sure to include a voided check along with the Enrofiment Form. The enrollment form and voided check are required to ensure proper processing, (6) Fax Completed Form Fax the completed enroliment form and voided check back to 3/0-943-2304, Be sure to notify National Payment Network immediately if (!) loan information changes, (2) payment amount changes, or (3) customer is not approved. Please contact 888-744-2977 immediately and speak with a customer service representative.

© 2007 Nationa; ?ayment Network, inc ™ PAGE 10 NATIONAL PAYMENT NETWORK, INC. 1739 Complaint EXHIBIT C CUSTOMER ENROLLMENT FORM BIWEEKLY PLAN AGREEMENT meu tenth prone Psa nn nfo tans Pore Se meer nis rented conmeect Ces Ro ceecteces Sawentha rence coen te oon DOS SOCONNIITE SOCIETY TO Roca apuate ae anes nm (* - Ls - = isola aaeeieen — = | | si Se ore omnenmene — == osen —— ne eee = a curtomes surrony te eat o- i= | room Chart a erm toa Aer ce ee ae e we Fe GT HR Enc By Pe emcees cnet or Cape ht Coer) coer = Oe ren soe ee aba de i emarert 2A co a hommend otra meee 9 be ccume) yom tors bor eecme= Cierd gutarmt se ewan Fe accuse Ts Fa arose cecil os Senet leer Laem UGE Pe oA Sete bee of) TS Chen! at eo 3 wena Meee Cpe a NOL md Se ‘ape ta! Se bol aebt crow & oasd Wo Ws romhe paveer! some We! Wt Poi Sih Oe? weve =i Oe Gnubed bi Fe owhews evan Fury Ore wr Subey owen steele ta alereyawece ctenys wal be aoe te bine Lae oem genpererwin oe far ae sai — — sa em hae pier — er aie women | Sap Caer ty 0 Armee 48m aie Ro Or rE FomQL | MA 28 OUR | Or Ore ape Sse ower Aaen 200 wow tone wre Coreame’ tel tw" Paragon | Prinagh De aye tarot ooo et se eet me cee lene eet ceme eee ote “ WAHTE = tax to ADMINISTRATOR YELLOW = CUSTOMER: FAX WHITE COPY TO: 2AQ-P49-2904 or 443-778-2320 (rcs a woes exten oxsereser mar) aa 4 at 9 © Nenee Meera n Meemeet be POMNE 2D: sem ermreR yor! mn gee anne © 2007 National Payment Network, inc PAGE I! NATIONAL PAYMENT NETWORK, INC. 1740 Complaint EXHIBIT C CUSTOMER WELCOME LETTER Lm alga aaa “Please Review Information Coretuly (Rt 2006 Mimscn Alfimc Redondo Beach. CA 90277023 Kennett Jones M00 N Mein Shree? Your Cltont ID # 8045801 Deo: Kenneth Jonws Congratulation ond welcome to the Biwmsily Plan for your 2006 Nason Altima. Piece review the Important Iifeemotien below. #f you have any questions about! your payments. peste Col BBE-744-2977. Fam Spem FSI M- F Gol tee). Please do no! caf the dealenhip where you puchawd the wehicke. Mey wil nef Newe any inlormation reparcing your payments Whol 5 Ine Bweery Pron? ‘Tht it he customized payment option you requetied for your new 2004 Niman Aitima. this payment option wil bud eauily foster and seduce fhe term of Ihe loan. What do | need to. do? Once you recelve you fin! poymund coupes oF loch stoternent plecte fax 6 copy to out procesting cemer of (310) 943-2304 (24 hes/ttay, 7 Gays/week), Pease write your Céen! ID number of @04580! on the fax. This information & needed to help eraure you payment cre procened comecty. Do ist need to malin powments? No. Instead of moting Ih monthy pay nents. funds wii be dratied automatically from your bonk occourt, Your You biweekly singowol: for hat of your monty payment omount vel then continue every ciherfiday (Ste the enclosed withdrawal schedule} WADL st receive montnly statements? Yet You wl ff receive monityy poyment stctemsnt: ona/or payment coupon. However once your plan egins you Go not need [oO make Tee poets — we wil Nancie Mal for yout What it my joan changes oF & paid oft? Feate contact Customer Support If your loan changes in any way (lor examele: toon is poid off. refinanced, lender changer. payTnent omount changes etc.) Thane you again for erroling your foan In ine Bhwoeky Mon. ‘Custorner Support National Payment Network Bwooliy Pion Proceming Dept PMC 1-088-144-2977 (Pam Spam PST. ef, tok tree) FAL 1-310-043 2804 ® 2007 National Payment Network, inc PAGE I2 NATIONAL PAYMENT NETWORK, INC. 1741 Complaint EXHIBIT C OVERCOMING OBJECTIONS The following s a collection of the most common customer objections. The responses provided are prover, eflective ways to overcome these objections, Could f just mail in extra payments to my loan by myself? You could, but the reason the Siweekly Payment Program is so successful, is that it provides 2 structured. disciplined way to prepay your loan. Most people have every intention of prepaying their loan, but never follow through. In fact, without this payment option, less than 3% of Americans say they will pay off their loan faster, and less than 1% actually does, Why is there a transaction fee of $1.95 added to each debit? This fee covers the cost of processing your biweekly payments, They also perform extensive verification on your account to make sure that your payments are posting to your loan properhy. Are the automatic withdrawals from my bank account safe? The institutions that debit funds from your bank account are trusted financial companies that have processed billion of dollars in automated funds transfers worldwide, How does the program pay off my loan faster? Wath the beweekly payment plan, they will debit half of your monthly payment amount every 2 weeks. Because the debits go through every 2 weeks, there are actually 26 half payments each year: This is equal to 13 monthly payment amounts. In short, this means you'll be prepaying an extra half payment to your principal balance about every 6 months. This prepayment pattern is what pays off your loan faster, reduces the interest charges, anc builds your equity more quickly, ‘Can I payoff my loan even faster? And eliminate even more interest charges? Absolutely. Senply cail the toll free customer support number and ask them to increase your payment amounts, You can increase and decrease your payment amounts any time, free of charge. You can also send in extra payments on your own whenever you'd like, What if | need to stop the program or change my payment dates? No prablern. Simply call the toll free customer support number and they can make those changes for your rignt over the phone. Changing your payment dates or canceling the program is extremely simple. © 2007 Nutional Payment Network, Inc @ PAGE 13 NATIONAL PAYMENT NETWORK, INC.

Complaint EXHIBIT C USING THE ONLINE CALCULATOR do loans at 45 days to allow time for consumer to receive Input the loan terms. Enter the days to first payment here. We recommend you your welcome materials in the mail \ Tint Usnhowder Payment Dus Dalec | animal) Doptotsifayme: | 45 After entering loan info, dick here to calculate savings.

Biweekly Plan Advantages Payoff your loan approximately 5 months faster! Click here to view a customized savings report.

{ Auto Loan Amount:

Effective Rate:

Loan Payolf imonths}:

se dioriee Click here to launch Equity Acceleration: the date selection tool Interest Savings: (see below).

Equity & interest Benefit:

34 Monihs - Equity & interest Benefit: L_ Print 2 “take-home”

Cateuare thew gees, Donets. Ind Detersiing ee ihe wel letter and ectenstes tom peng | Wnteew et eeenpe, then eduction a yd on the town Seteeeemnermetcee eer coon ee he Coste cee ee entimaeee nerensec: give to customer. 2a Cet tit nd “Wewrest Seargs” hea beeen tne 108 wn ipereet rave ot APPL “Etiacinm Rate" ow ewoutstad thy applying the pancert @mereuen in irtecust Charpet 10 The achat Intervet rate Biweekly Debit Date: 4/23/2006 Biweekly Amount: $256.19 Debit Dates & You have 2 options for start dates. Option one ‘s the default date | Debit Option 1: Fist Ful Debit Date: 6/16/2006 = Ful Debit Amount: $510.42 that prints on the Biweekly Debt Date: 40/2006 Biweekly Amount: $256.19 enroliment form, | Debit Option 2: First Ful Debit Date: 4/9/2006 Ful Debit Armount: $s1a42 © 2007 National Payment Network, ine PAGE |4 NATIONAL PAYMENT NETWORK, INC. 1743 Complaint EXHIBIT C USING THE ONLINE REPORTING TOOLS The Onfine Reporting tools allow dealers to easily track envoliment activity and commission payments, Simply select the appropriate report to view revenue that wes earned in a prior month, a forecast of pending commissions, and a total account summary of af accounts that have been enrolled. The most important report is the Error Summary report. This report shows all enroliments that were submitted with incorrect enrollment forms. For example, enrollment forms that are missing Sank account information or social security numbers will show up in this report. Simply contact customer support to provide the missing information so that the enroliment form can be properly processed. ne:

it } | Ue aed vein y H inns © 2007 National Payment Network, Inc @ PAGE 15 NATIONAL PAYMENT NETWORK, INC.

Complaint EXHIBIT D NPN Biweekly Calculator NATIONAL PAYMENT npniNc ees NETWORK — | have been informed of the Denefits of the Biweekly Plan. However, | DO NOT wish to take advantage of the program at this time. Page 1 of 2 Payott your loan approximately 5 months taster! Monthly Biweekly Loan Amount: $19,117.51 Interest Rate: 6.25% Loan Payoff (months): 72 —," 67 |" show datos | Payment Amount: $319.92 $159.97 interest Reduction: $0 $256 Equity Acceleration (36 months): $0 $610 | dear tools | Equity Acceleration (at payoff): $0 >) [pm Debit Option 1: First Full Debit Date: 04/04/2008 Full Debit Amount $321.87 httn://12.153.160.7/non-calc/loanCalculator.htm?waiver=ab1244sss666&logo™ab1244sss6... 3/10/2008 NATIONAL PAYMENT NETWORK, INC. 1745 Complaint EXHIBIT D Biweekly Debit Date: 04/16/2008 Bhweokty Amount: $161.92 Debit Option 2; First Full Debit Date: 03/28/2008 Biweekly Deba Dete: = 04/11/2008 Build Equity Faster - Payott Loan Faster Important Terms and Definitions: The purpose of this program ts to eccelorate the loan or lease payoff. This cafculetor shows estimated figures; actual program benefits, interest! reduction, joan peyoff (months), payment amounts, and other figures will vary. interest Reduction is not a total savings figure; In some cases the fees charged to borrower may exceed the Interest Reduction. Consumer ts responsible for ensuring lender applies any loan prepayments to principal balance to create interest reduction. Equity Acceleration ts not 8 total savings figure; it refers to the estimated difference in loan balence when compared to standard monthly payments. © 2007 Nationa! Payment Network, Inc NATIONAL PAYMENT NETWORK, INC. 1746 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the Respondent named in the caption hereof, and Respondent having been furnished thereafter with a copy of a draft complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondent with violation of the Federal Trade Commission Act (“FTC Act”) , 15 U.S.C. § 45 et seq.; and Respondent and counsel for the Commission having thereafter executed an Agreement Containing Consent Order (“Consent Agreement”), which includes a statement by Respondent that it neither admits nor denies any of the allegations in the draft complaint, except as specifically stated in the Consent Agreement, and, only for purposes of this action, admits the facts necessary to establish jurisdiction; and waivers and other provisions as required by the Commission’s Rules;

The parties, having agreed that the complaint may be used in construing the terms of the order and that no agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of this order; and The Commission having thereafter considered the matter and having determined that it had reason to believe that Respondent has violated the FTC Act and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed Consent Agreement and placed such Consent Agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure prescribed in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent, National Payment Network, Inc., also known as NPN, Inc. is a California corporation, with NATIONAL PAYMENT NETWORK, INC. 1747 Decision and Order its principal place of business at 1875 S. Grant Street, Suite 250, San Mateo, California 94402. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of Respondent, and the proceeding is in the public interest. ORDER DEFINITIONS For purposes of this order, the following definitions shall apply:

A. Unless otherwise specified, “Respondent” means National Payment Network, Inc., also known as NPN, Inc., and its successors and assigns.

B. “Add on product or service” means any product or service relating to the sale, lease, or financing of a motor vehicle that is offered, provided, or arranged by the dealer that is not provided or installed by the motor vehicle manufacturer, including but not limited to extended warranties, payment programs, guaranteed automobile protection (“GAP”) or “GAP insurance,” etching, service contracts, theft protection or security devices, global positioning systems or starter interrupt devices, undercoating, rustproofing, fabric protection, road service or club memberships, appearance products, credit life insurance, credit accident or disability insurance, credit loss of income insurance, and debt cancellation and debt suspension coverage. The term excludes any such product or service that the dealer provides to the consumer at no charge. C. “Clearly and conspicuously” shall mean as follows: 1. In a print advertisement, the disclosure shall be in a type size, location, and in print that contrasts with the background against which it appears, sufficient for an ordinary consumer to notice, read, and comprehend it.

NATIONAL PAYMENT NETWORK, INC. 1748 Decision and Order 2. In an electronic medium, an audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. A video disclosure shall be of a size and shade and appear on the screen for a duration, and in a location, sufficient for an ordinary consumer to read and comprehend it.

3. In a television or video advertisement, an audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. A video disclosure shall be of a size and shade, and appear on the screen for a duration, and in a location, sufficient for an ordinary consumer to read and comprehend it. 4. In a radio advertisement, the disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. 5. In all advertisements, the disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or promotion.

D. “Competent and reliable evidence” means tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

E. “Current customers” means all customers who are enrolled in Respondent’s biweekly payment program as of October 1, 2014.

F. “Fee waiver period” means the period beginning 30 days after the date of service of the order and concluding when no current customer is enrolled in Respondent’s biweekly payment program. NATIONAL PAYMENT NETWORK, INC. 1749 Decision and Order G. “Payment program” means any product, service, plan, or program represented, expressly or by implication, to provide payment or meet other terms of a financing contract between a consumer and (1) a creditor, including an auto dealer, or (2) another financing entity, including a finance company, a bank, or another assignee.

I.

IT IS ORDERED that Respondent, its officers, agents, representatives, and employees, directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any payment program and add-on product or service, shall not in any manner, expressly or by implication: A. Represent that the payment program or add-on product or service will save any consumer money, including interest, unless:

1. The amount of savings a consumer will achieve is greater than the total amount of fees and costs charged in connection with the payment program or add-on product or service and the representation is otherwise true, or 2. Any qualifying information relating to the savings a consumer might achieve from the payment program or add-on product or service is clearly and conspicuously disclosed, including, but not limited to, information about the total amount of fees and costs charged in connection with such payment program or add-on product or service.

B. Represent that the payment program or add-on product or service will save any consumer a specific amount of money, including interest, unless:

1. The specified amount is the amount of savings after deducting any fees or costs charged in connection with the payment program or add-on product or service and the representation is otherwise true, or NATIONAL PAYMENT NETWORK, INC. 1750 Decision and Order 2. Any qualifying information relating to the savings a consumer might achieve from the payment program or add-on product or service is clearly and conspicuously disclosed, including, but not limited to, information about the total amount of fees and costs charged in connection with such payment program or add-on product or service.

II.

IT IS FURTHER ORDERED that Respondent and its officers, agents, representatives, and employees, directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any payment program shall not misrepresent, in any manner, expressly or by implication: A. The existence, amount, timing, or manner of any fee or cost charged by Respondent or a third party in connection with such payment program;

B. That such payment program has the ability to improve, repair or otherwise affect a consumer’s credit record, credit history, credit rating, or ability to obtain credit; and C. The benefits, performance, or efficacy of the payment program.

III.

IT IS FURTHER ORDERED that Respondent and its officers, agents, representatives, and employees, directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any add-on product or service shall not misrepresent, in any manner, expressly or by implication:

A. The total costs to purchase, receive, or use, or the quantity of, the add-on product or service; B. Any restriction, limitation, or condition on purchasing, receiving, or using the add-on product or service; NATIONAL PAYMENT NETWORK, INC. 1751 Decision and Order C. Any aspect of the benefits, performance, or efficacy of the add-on product or service;

D. Any aspect of the nature or terms of any refund, cancellation, exchange, or repurchase policy, including, but not limited to, the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer; and E. That any add-on product or service has the ability to improve, repair or otherwise affect a consumer’s credit record, credit history, credit rating, or ability to obtain credit.

IV.

IT IS FURTHER ORDERED that Respondent and its officers, agents, representatives, and employees, directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any payment program or add-on product or service shall not make any representation or assist others in making any representation, expressly or by implication, about the benefits, performance, or efficacy of any add-on product or service or payment program, unless at the time such representation is made, the Respondent possesses and relies upon competent and reliable evidence that substantiates that the representation is true.

V.

IT IS FURTHER ORDERED that Respondent and its officers, agents, representatives, and employees, whether acting directly or indirectly, shall not assess, collect, or attempt to collect any cancellation fees from current customers who complete Respondent’s biweekly payment program or finish paying off their financing contract.

VI.

IT IS FURTHER ORDERED that Respondent shall pay two million four hundred and seventy five thousand dollars ($2,475,000.00) as follows:

NATIONAL PAYMENT NETWORK, INC. 1752 Decision and Order A. Respondent shall refund customers one million five hundred and twenty-six thousand dollars ($1,526,000.00) within thirty (30) days of the date of service of this order, or remit the balance to the FTC within forty (45) days of the date of service of this order. Such refunds shall include refunds of all cancellation fees paid by customers who remained in Respondent’s biweekly payment program for 48 months or more, and for the remaining amount of the $1,526,000.00, pro rata refunds of fees assessed to current customers. Within forty five (45) days of the date of service of this order, Respondent shall provide records to the Commission sufficient to show all payments made pursuant to this Section VI.A. B. Respondent shall waive an additional nine hundred and forty-nine thousand dollars ($949,000.00) in fees for current customers during the fee waiver period, or remit the balance to the FTC within fifteen (15) days of the conclusion of the fee waiver period. Such waived fees shall include all remaining enrollment fees and cancellation fees, and at least 50% of each ACH fee, and may include other fees. Respondent shall provide the Commission with quarterly reports within thirty (30) days after the end of each quarter sufficient to show all fee waivers made during that quarter, until the entire amount of $949,000.00 is waived or the balance is remitted to the FTC.

C. In the event of default on the obligation pursuant to Sections VI.A and VI.B of this order, interest, computed pursuant to 28 U.S.C. § 1961(a), shall accrue from the date of default to the date of payment. In the event such default continues for ten (10) calendar days beyond the date that payment is due, the entire amount shall immediately become due and payable.

D. In the event that Respondent remits any balance to the FTC pursuant to Sections VI.A and VI.B, Respondent shall also provide to the Commission a searchable electronic file containing the name and contact NATIONAL PAYMENT NETWORK, INC. 1753 Decision and Order information of all consumers who enrolled in Respondent’s biweekly payment program, to the extent it has such information in its possession or control, including information available upon request from auto dealers and others. Such file: (1) shall include each consumer’s name and address, the date of enrollment, the total amount of payments made under the biweekly payment program, the total amount of all fees paid in connection with the biweekly payment program less any amounts credited for refunds or waived by Respondent, and, if available, the consumer’s telephone number and email address; (2) shall be updated through the National Change of Address database; and (3) shall be accompanied by a sworn affidavit attesting to its accuracy. E. All funds paid to the Commission pursuant to Sections VI.A and VI.B of this order may be deposited into a fund administered by the Commission or its designee to be used for equitable relief, including consumer redress and any attendant expenses for the administration of any redress fund. If a representative of the Commission decides that direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, the Commission may apply any remaining money for such other equitable relief (including consumer information remedies) as it determines to be reasonably related to Respondent’s practices alleged in the Complaint. Any money not used for such equitable relief is to be deposited to the U.S. Treasury as disgorgement. Respondent has no right to challenge any actions the Commission or its representatives may take pursuant to this Subsection. No portion of any payment under the judgment herein shall be deemed a payment of any fine, penalty, or punitive assessment. F. Respondent relinquishes all dominion, control, and title to the funds paid to the fullest extent permitted by law. Respondent shall make no claim to or demand for return of the funds, directly or indirectly, through counsel or otherwise.

NATIONAL PAYMENT NETWORK, INC. 1754 Decision and Order G. Respondent agrees that the facts as alleged in the complaint filed in this action shall be taken as true without further proof in any bankruptcy case or subsequent civil litigation pursued by the Commission to enforce its rights to any payment or money judgment pursuant to this order, including but not limited to a nondischargeability complaint in any bankruptcy case. Respondent further agrees that the facts alleged in the complaint establish all elements necessary to sustain an action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and that this order shall have collateral estoppel effect for such purposes. H. Respondent acknowledges that its Taxpayer Identification Number (or Employer Identification Number), which Respondent must submit to the Commission, may be used for collecting and reporting on any delinquent amount arising out of this order, in accordance with 31 U.S.C. § 7701.

I. Proceedings instituted under this Section are in addition to, and not in lieu of, any other civil or criminal remedies that may be provided by law, including any other proceedings the Commission may initiate to enforce this order.

VII.

IT IS FURTHER ORDERED that Respondent shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All advertisements and promotional materials containing the representations;

B. All materials that were relied upon in disseminating the representations;

C. All evidence in its possession or control that contradicts, qualifies, or calls into question the representations, or the basis relied upon for the NATIONAL PAYMENT NETWORK, INC. 1755 Decision and Order representations, including complaints and other communications with consumers or with governmental or consumer protection organizations; and D. Any documents reasonably necessary to demonstrate full compliance with each provision of this order, including but not limited to all documents obtained, created, generated, or that in any way relate to the requirements, provisions, or terms of this order, and all reports submitted to the Commission pursuant to this order.

VIII.

IT IS FURTHER ORDERED that Respondent shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives, including auto dealerships who sell Respondent’s payment programs or Respondent’s add-on products and services, having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondent shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. IX.

IT IS FURTHER ORDERED that Respondent shall notify the Commission at least thirty (30) days prior to any change in the entity that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the entity’s name or address. Provided, however, that, with respect to any proposed change in the corporation about which Respondent learns less than thirty (30) days prior to the date such action is to take place, Respondent shall notify the Commission as soon as is practicable after obtaining such NATIONAL PAYMENT NETWORK, INC. 1756 Decision and Order knowledge. Unless otherwise directed by a representative of the Commission in writing, all notices required by this Section shall be emailed to [email protected] or sent by overnight courier (not U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC, 20580. The subject line must begin: FTC v. NPN, Inc.

X.

IT IS FURTHER ORDERED that Respondent, within sixty (60) days after the date of service of this order, shall file with the Commission a true and accurate report, in writing, setting forth in detail the manner and form of its own compliance with this order. Within ten (10) days of receipt of written notice from a representative of the Commission, it shall submit additional true and accurate written reports.

XI.

This order will terminate on May 4, 2035, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any Section in this order that terminates in less than twenty (20) years;

B. This order’s application to any Respondent that is not named as a defendant in such complaint; C. This order if such complaint is filed after the order has terminated pursuant to this Section.

Provided, further, that if such complaint is dismissed or a federal court rules that Respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld NATIONAL PAYMENT NETWORK, INC. 1757 Analysis to Aid Public Comment on appeal, then the order will terminate according to this Section as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. By the Commission.

ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT The Federal Trade Commission (“FTC”) has accepted, subject to final approval, an agreement containing a consent order from National Payment Network, Inc., also known as NPN, Inc. The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the FTC will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement and take appropriate action or make final the agreement’s proposed order. The respondent is a company that offers an auto payment program to consumers financing a motor vehicle. The matter involves its advertising of the auto payment program to consumers. According to the FTC complaint, respondent has represented that consumers who enroll in its biweekly payment program in order to pay off their auto-financing contract will save money, often including a specific amount of savings in interest. Respondent failed to disclose, however, that it charged fees that in many cases offset any savings under the program, and also failed to disclose the total amount of these fees. These facts would be material to consumers in their decision to enroll in respondent’s biweekly payment program. The complaint alleges therefore that respondent’s failure to disclose the above-mentioned facts is a deceptive practice in violation of Section 5 of the FTC Act. NATIONAL PAYMENT NETWORK, INC. 1758 Analysis to Aid Public Comment The proposed order is designed to prevent respondent from engaging in similar deceptive practices in the future. Section I prohibits respondent from representing that a payment program or add-on product or service will save consumers money, including interest, unless the amount of savings is greater than the total amount of fees associated with the product or service or any qualifying information is clearly and conspicuously disclosed. Section I also prohibits respondent from representing that a payment program or add-on product or service will save any consumer a specific amount of money, including interest, unless the specified amount is the amount of savings after deducting any fees or any qualifying information relating to savings is clearly and conspicuously disclosed.

Section II of the proposed order prohibits respondent from making misrepresentations related to any payment programs, including regarding the existence, amount, timing, or manner of any fees, the program’s benefits, performance, or efficacy, or the ability of any payment program to affect consumer credit. Section III of the proposed order prohibits respondent from making misrepresentations related to any add-on products or services, including regarding the total costs of the add-on and the benefits, performance, or efficacy of the add-on, any restrictions or conditions associated with the add-on, the nature or terms of any refund, cancellation, or exchange of an add-on and that any add-on product can improve, repair or otherwise affect a consumer’s credit.

Section IV requires respondent to substantiate any representations about the benefits, performance or efficacy of any add-on product or service or any payment program. Section V prohibits respondent from collecting cancellation fees from consumers who have finished paying off their financing contract through NPN’s Plan.

Section VI of the proposed order requires respondent to pay consumers two million four hundred and seventy-five thousand dollars ($2,475,000.00) in monetary relief. The proposed order permits respondent to pay the monetary relief amount by: (1) NATIONAL PAYMENT NETWORK, INC. 1759 Analysis to Aid Public Comment refunding customers a total of $1,526,000.00 within thirty days of service of the order; (2) waiving an additional $949,000.00 in fees for current customers. If respondent is unable to provide refunds or fee waivers in the stated amount, it must remit the balance to the Commission.

Section VII of the proposed order requires respondent to keep copies of relevant advertisements and materials substantiating claims made in the advertisements. Section VIII requires that respondent provide copies of the order to certain of its personnel. Section IX requires notification of the Commission regarding changes in corporate structure that might affect compliance obligations under the order. Section X requires the respondent to file compliance reports with the Commission. Finally, Section XI is a provision “sunsetting” the order after twenty (20) years, with certain exceptions.

The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or proposed order, or to modify in any way the proposed order’s terms.

CITY NISSAN INC. 1760 Complaint