New World Auto Imports, Inc., Doing Business as Southwest Kia, et al.; Analysis of Proposed Consent Order To Aid Public Comment |
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Topics: New World Auto Imports, Southwest Kia
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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 3370-3372]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00998]
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FEDERAL TRADE COMMISSION
[File No. 132 3165]
New World Auto Imports, Inc., Doing Business as Southwest Kia, et
al.; 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/southwestkiaconsent online or on paper,
by following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Southwest Kia--Consent
Agreement; File No. 132-3165'' on your comment and file your comment
online at https://ftcpublic.commentworks.com/ftc/southwestkiaconsenthttps://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
[[Page 3371]]
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 ``Southwest Kia--Consent Agreement; File No. 132-3165'' 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/southwestkiaconsent 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 ``Southwest Kia--Consent
Agreement; File No. 132-3165'' 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 New World
Auto Imports, Inc., d/b/a Southwest Kia, New World Auto Imports of
Rockwall, Inc., d/b/a Southwest Kia, and Southwest Kia of Rockwall, and
Hampton Two Auto Corporation, d/b/a Southwest Kia, Southwest Kia-NW,
and Southwest Kia Mesquite. 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 respondents are motor vehicle dealers. According to the FTC
complaint, respondents have advertised that consumers can finance the
purchase of vehicles for the advertised terms, including the advertised
monthly payment amount. The complaint alleges that, in fact, the
monthly payment increases dramatically at the end of the transaction,
because consumers owe a balloon payment of many thousand dollars. The
complaint alleges, therefore, that respondents' representations are
false or misleading in violation of Section 5 of the FTC Act. The
complaint also alleges that respondents have advertised that consumers
can pay $27 at lease inception to lease the advertised vehicles for the
advertised monthly payment amount. The complaints alleges that, in
fact, consumers must also pay fees, including but not limited to an
acquisition fee, which is $595, and the first month's payment, for a
total of at least $700 for each vehicle. The complaint alleges,
therefore, that respondents' representations are false or misleading in
violation of Section 5 of the FTC Act. In addition, the complaint
alleges a violation of the Truth in Lending Act (``TILA'') and
Regulation Z for failing to disclose clearly and conspicuously certain
costs and terms when advertising credit. The complaint also alleges a
violation of the Consumer Leasing Act (``CLA'') and Regulation M for
failing to clearly and conspicuously disclose the costs and terms when
advertising leases.
The proposed order is designed to prevent the respondents from
engaging in similar deceptive practices in the future. Part I.A
prohibits the respondents from misrepresenting the cost of: (1)
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, and the
repayment obligation over the full term of the loan, including any
balloon payment; or (2) 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. Part I.B prohibits the respondents from
misrepresenting any other material fact about the price, sale,
financing, or leasing of any vehicle.
Part II of the proposed order addresses the TILA allegation. It
requires that the respondents clearly and conspicuously make all of the
disclosures required by TILA and Regulation Z if they state the amount
or percentage of any
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downpayment, the number of payments or period of repayment, the amount
of any payment, or the amount of any finance charge. In addition, Part
II prohibits the respondents from stating a rate of finance charge
without stating the rate as an ``annual percentage rate'' or the
abbreviation ``APR,'' using that term. Part II also prohibits any other
violation of TILA and Regulation Z.
Part III of the proposed order addresses the CLA allegation. It
requires that the respondents clearly and conspicuously make all of the
disclosures required by CLA and Regulation M if they state relevant
trigger terms, including the monthly lease payment or the amount of any
payment or that any or no initial payment is required at lease
inception.
Part IV of the proposed order requires respondents to keep copies
of relevant advertisements and materials substantiating claims made in
the advertisements. Part V requires that respondents provide copies of
the order to certain of their personnel. Part VI requires notification
to the Commission regarding changes in corporate structure that might
affect compliance obligations under the order. Part VII requires the
respondents to file compliance reports with the Commission. Finally,
Part VIII 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. 2014-00998 Filed 1-17-14; 8:45 am]
BILLING CODE 6750-01-P