The Crittenden Automotive Library

Announced Action(s) for April 18, 1997

Agency: Federal Trade Commission
Date: 18 April 1997
[Non-automotive content removed.]

Consent agreements given final approval: Following a public comment period on each, the Commission has made final consent agreements with the following entities. The Commission actions make the consent orders binding on the respondents.

The consent order with Herb Gordon Auto World, Inc. settles charges that the advertising campaign for financing plans run by this Silver Spring, Maryland, company and its seven dealerships violated the FTC Act, the Truth In Lending Act (TILA) and its implementing Regulation Z, and the Consumer Leasing Act (CLA) and its implementing Regulation M. The order bars the respondents from obscuring important cost information in fine or otherwise unreadable print, and from advertising financed purchase or leasing terms that are not, in fact, available to consumers. The order requires the respondents to make all the disclosures required by the TILA, Regulation Z, CLA, and Regulation M, and to ensure that those disclosures are readily noticeable, readable (hearable for radio ads), and comprehensible to an ordinary consumer. The order also bars the respondents from misrepresenting the terms of financing or leasing any vehicle, the existence or amount of any balloon payment, or the existence, number or amount of payments for financed purchases. If an APR may be increased after consummation of the financed purchase deal, the ad must state that fact. (See Jan. 23, 1997 news release for more details regarding this case; Docket No. C-3734; Commission vote on April 15 to issue this consent order as final was 5-0.) Staff contact is David Medine, 202-326-3224, or Carole Reynolds, 202-326-3230.

The consent order with Huling Bros. Chevrolet, Huling Buick, Inc., and Huling Bros. Chrysler/Plymouth, Inc., of Seattle, Washington, settles charges that the respondents violated the FTC Act, and the Truth in Lending Act and its implementing Regulation Z. The order requires the respondents to correctly calculate the annual percentage rage (APR) for financed purchases in accordance with Regulation Z, and to include in a clear and conspicuous manner all the disclosures required by law when a triggering term is used in an advertisement. The order also bars the respondents from misrepresenting the terms of financed deals, the APR, the amount of any periodic payment, the availability of any advertised credit terms, the sale price, or the availability of any rebate. (See Jan. 23, 1997 news release for more details regarding this case; Docket No. C-3732; Commission vote on April 14 to issue the order as final was 5-0.) Staff contact is Charles Harwood or George Zweibel, Seattle Regional Office, 206-220- 6350.

The consent order with 1554 Corporation (doing business as The Mellinger Company), and its president, Brainerd L. Mellinger III, of Woodland Hills, California, settles FTC charges that the infomercial and other advertising for the Mellinger World Trade Mail Order Plan, included unsubstantiated earnings claims. The order bars the respondents from claiming without substantiation that, with regard to a business opportunity product or service, consumers typically will succeed in a profitable business or earn substantial income, and from making any other unsubstantiated claim about the performance, benefits, efficacy or success rate of any such product or service. The order also bars the respondents from using testimonials or endorsements that make deceptive or unsubstantiated representations, or which imply that they represent the typical or ordinary experience of users unless the respondents either substantiate that the experience is typical or qualify the representation. (See Jan. 27, 1997 news release for more details regarding this case; Docket No. C-3733; Commission vote on April 14 to issue the order as final was 5-0.) Staff contact is Justin Dingfelder, 202-326-3017.

Copies of the documents referenced above are available at the FTC’s website at www.ftc.gov and also from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

Media Contact:

Office of Public Affairs
202-326-2180