Norm Reeves, Inc., Doing Business as Norm Reeves Honda Superstore; Analysis of Proposed Consent Order To Aid Public Comment |
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Topics: Norm Reeves Honda Superstore
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Donald S. Clark
Federal Trade Commission
January 21, 2014
[Federal Register Volume 79, Number 13 (Tuesday, January 21, 2014)]
[Notices]
[Pages 3375-3376]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00999]
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FEDERAL TRADE COMMISSION
[File No. 132-3151]
Norm Reeves, Inc., Doing Business as Norm Reeves Honda
Superstore; Analysis of Proposed Consent Order To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis of
Proposed Consent Order to Aid Public Comment describes both the
allegations in the draft complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.
DATES: Comments must be received on or before February 10, 2014.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/normreevesconsent online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Norm Reeves, Inc.--
Consent Agreement; File No. 132-3151'' on your comment and file your
comment online at https://ftcpublic.commentworks.com/ftc/normreevesconsenthttps://ftcpublic.commentworks.com/ftc/fidelitynationalconsent by following the instructions on the web-based
form. If you prefer to file your comment on paper, mail or deliver your
comment to the following address: Federal Trade Commission, Office of
the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW.,
Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Mark Glassman, Bureau of Consumer
Protection, (202-326-2826), 600 Pennsylvania Avenue NW., Washington, DC
20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for January 9, 2014), on the World Wide Web, at
http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from
the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue NW.,
Washington, DC 20580, either in person or by calling (202) 326-2222.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before February 10,
2014. Write ``Norm Reeves, Inc.--Consent Agreement; File No. 132-3151''
on your comment. Your comment--including your name and your state--will
be placed on the public record of this proceeding, including, to the
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the
Commission tries to remove individuals' home contact information from
comments before placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/normreevesconsent by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you file your comment on paper, write ``Norm Reeves, Inc.--
Consent Agreement; File No. 132-3151'' on your comment and on the
envelope, and mail or deliver it to the following address: Federal
Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600
Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your
paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before February 10, 2014. You can find more
information, including routine uses permitted by the Privacy Act, in
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``FTC'') has accepted, subject to
final approval, an agreement containing a consent order from Norm
Reeves, 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
[[Page 3376]]
action or make final the agreement's proposed order.
The respondent is a motor vehicle dealer. According to the FTC
complaint, respondent has advertised cars for leasing, and has also
advertised financing offers. In connection with its advertising of
lease offers, the complaint alleges, the respondent has advertised that
consumers can pay ``$0'' up-front to lease a car, and has depicted
several cars in its advertisements to which this offer applies, listing
a specific monthly lease payment for each such car. The complaint
alleges that, in fact, for a $0 up-front payment, consumers cannot
lease the cars shown in the advertisements for the advertised monthly
payment amounts, and that instead, consumers must also pay a security
deposit and/or significant fees, including but not limited to an
acquisition fee. The complaint alleges that, therefore, the
respondent's representations are false or misleading in violation of
Section 5 of the FTC Act. In addition, the complaint alleges a
violation of the Consumer Leasing Act and Regulation M for failing to
clearly and conspicuously disclose the costs and terms of certain
leases offered, despite the respondent's use of certain triggering
terms in the advertisements.
The complaint further alleges, in connection with its advertising
of financing offers, that the respondent has advertised that it offers
0% APR financing on all new cars. According to the complaint, the
respondent's advertisements have failed to disclose adequately that
consumers who finance more than a certain amount--e.g., $12,000--will
be charged more than 0% APR. The complaint alleges that, therefore, the
respondent's representations are deceptive in violation of Section 5 of
the FTC Act. In addition, the complaint alleges a violation of the
Truth in Lending Act and Regulation Z for failing to clearly and
conspicuously disclose the amount or percentage of the downpayment,
despite the respondent's use of certain triggering terms in the
advertisements.
The proposed order is designed to prevent the respondent from
engaging in similar deceptive practices and law violations in the
future. Part I.A prohibits the respondent from misrepresenting the cost
of: (1) Leasing a vehicle, including but not limited to the total
amount due at lease inception, the downpayment, amount down,
acquisition fee, capitalized cost reduction, any other amount required
to be paid at lease inception, and the amounts of all monthly or other
periodic payments; or (2) purchasing a vehicle with financing,
including but not necessarily limited to the amount or percentage of
the downpayment, the number of payments or period of repayment, the
amount of any payment, the annual percentage rate or any other finance
rate, and the repayment obligation over the full term of the loan,
including any balloon payment. Part I.B prohibits the respondent from
misrepresenting any other material fact about the price, sale,
financing, or leasing of any vehicle.
Part II of the proposed order prohibits the respondent from making
any representation regarding an annual percentage rate or other
interest rate, unless the representation clearly and conspicuously
discloses any material limitation on obtaining the rate, including
whether different rates apply based on the amount financed, and if so,
the different rates that apply.
Part III of the proposed order addresses the CLA allegation. It
requires that the respondent clearly and conspicuously make all of the
disclosures required by CLA and Regulation M when any of its
advertisements states relevant triggering terms. In addition, Part III
prohibits any other violation of CLA and Regulation M.
Part IV of the proposed order addresses the TILA allegation. It
requires that the respondent make all of the disclosures required by
TILA and Regulation Z when any of its advertisements states relevant
triggering terms. In addition, Part IV prohibits any other violation of
TILA and Regulation Z.
Part V of the proposed order requires respondent to keep copies of
relevant advertisements and materials substantiating claims made in the
advertisements. Part VI requires that respondent provide copies of the
order to certain of its personnel. Part VII requires notification to
the Commission regarding changes in corporate structure that might
affect compliance obligations under the order. Part VIII requires the
respondent to file compliance reports with the Commission. Finally,
Part IX 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.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2014-00999 Filed 1-17-14; 8:45 am]
BILLING CODE 6750-01-P