53640 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices

The complaint against respondents

Frank Bommarito also alleges that their

credit advertisements have represented

that consumers can purchase the

advertised vehicles at the terms

prominently stated in the ad, such as

the monthly payment, annual

percentage rate (‘‘APR’’), and amount

stated as ‘‘down.’’ This representation is

false, according to the compliant,

because consumers must also pay a final

balloon payment of several thousand

dollars to purchase the advertised

vehicles. These practices, according to

the complaints, constitute deceptive

acts or practices in violation of Section

5(a) of the FTC Act.

The proposed consent orders contain

provisions designed to remedy the

violations charged and to prevent the

respondents from engaging in similar

acts and practices in the future.

Specifically, the proposed orders

prohibit respondents, in any lease

advertisement, from misrepresenting the

costs of leasing a vehicle, including but

not limited to the total amount due at

lease inception. The proposed orders

also prohibit respondents, in any lease

advertisement, from stating any amount

due at lease inception or that no such

amount is required, not including a

statement of the periodic payment,

unless the advertisement also states

with ‘‘equal prominence’’ the total

amount due at lease inception. This

‘‘prominence’’ requirement for lease

inception fees also is found in the

Board’s 1996 and 1997 revisions to

Regulation M.

The proposed orders also require

respondents, in any advertisement that

states the amount of any payment, the

number of required payments, or that

any or no downpayment or other

payment is required at consummation of

the lease, to also state clearly and

conspicuously all of the terms required

by Regulation M, as applicable and as

follows: that the transaction advertised

is a lease; the total amount of any

payment such as a security deposit or

capitalized cost reduction required at

the consummation of the lease, or that

no such payments are required; the

number, amounts, due dates or periods

of scheduled payments, and the total of

such payments under the lease; a

statement of whether or not the lessees

has the option to purchase the leased

property and at what price and time (the

method of determining the price may be

substituted for disclosure of the price);

and a statement of the amount or

method of determining the amount of

any liabilities the lease imposes upon

the lessee at the end of the term and a

statement that the lessee shall be liable

for the difference, if any, between the

estimated value of the leased property

and its realized value at the end of the

lease term if the lessee has such

liability. For all lease advertisements,

the proposed orders permit respondents

to comply with this provision by

utilizing applicable provisions of the

revised CLA and the 1996 and 1997

revisions to Regulation M. The orders

set out for each media which provisions

of such revised laws are applicable.

The proposed order for respondents

Lou Fusz also prohibits these

respondents from stating specific lease

terms unless respondents usually and

customarily lease or will lease a vehicle

at those terms. This proposed order also

prohibits respondents Lou Fusz from

misrepresenting the type of transaction

advertised, including but not limited to

the fact that the offer is for a one

payment lease.

The proposed order for respondents

Beuckman also prohibits these

respondents from stating the term

‘‘RCL’’ without disclosing clearly and

conspicuously that such term refers to a

lease transaction.

With regard to respondents’ credit

advertisements, the proposed orders

require that any advertisement that

states the amount or percentage of any

downpayment, the number of payments,

the amount of any payment, or the

amount of any finance charge must also

state clearly and conspicuously all of

the terms required by the TILA and

Regulation Z, as applicable and as

follows: the amount or percentage of the

downpayment; the terms of repayment;

and the annual percentage rate, using

that term or the abbreviation ‘‘APR.’’ If

the APR may be increased after

consummation of the credit transaction,

that fact must also be disclosed. The

proposed order for respondents Suntrup

also prohibits these respondents from

stating a rate of finance charge without

stating the rate as an ‘‘annual percentage

rate’’ or the abbreviation ‘‘APR.’’

The proposed order for respondents

Frank Bommarito prohibits these

respondents, in any credit

advertisement, from misrepresenting the

terms of financing a vehicle, including

but not limited to the amount of any

balloon payment. This proposed order

also prohibits respondents Frank

Bommarito from stating the amount of

any payment or the amount or

percentage of any downpayment or

amount ‘‘down’’ if any advertisement

unless these respondents also state the

amount of any final balloon payment

prominently and in close proximity to

the most prominent of the above

statements.

The proposed orders also prohibit all

respondents from failing to comply in

any other respect with the CLA and

Regulation M and the TILA and

Regulation Z. The proposed order

permits respondents to comply with

other requirements of existing

Regulation M, 12 C.F.R. § 213 by

utilizing the 1996 and 1997 revisions to

Regulation M, as amended.

The purpose of this analysis is to

facilitate public comment on the

proposed orders, and it is not intended

to constitute an official interpretation of

the agreements and proposed orders or

to modify in any way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 97–27228 Filed 10–14–97; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File Nos. 9723141 and 9523098]

Volkswagen of America, Inc., and

Toyota Motor Sales, U.S.A., Inc.;

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: The consent agreements in

these matters settle alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaints that accompany the

consent agreements and the terms of the

consent orders—embodied in the

consent agreements—that would settle

these allegations.

DATES: Comments must be received on

or before December 15, 1997.

ADDRESSES: Comment should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

David Medine, Federal Trade

Commission, S–4429, 6th St. and

Pennsylvania Ave., NW., Washington,

DC 20580. (202) 326–3224.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and § 2.34 of the Commission’s rules

of practice (16 CFR 2.34), notice is

hereby given that the above-captioned

consent agreement containing consent

orders to cease and desist, having been

filed with and accepted, subject to final

approval, by the Commission, have been

placed on the public record for a period

of sixty (60) days. The following

Analysis to Aid Public Comment

describes the terms of the consent

agreements, and the allegations in the
Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices 53641

accompanying complaints. Electronic

copies of the full text of the consent

agreement packages can be obtained

from the Commission Actions section of

the FTC Home Page (for October 7,

1997), on the World Wide Web, at

‘‘http://www.ftc.gov/os/actions97.htm.’’

Paper copies can be obtained from the

FTC Public Reference Room, Room H–

130, Sixth Street and Pennsylvania

Avenue, NW., Washington, DC 20580,

either in person or by calling (202) 326–

3627. Public comment is invited. Such

comments or views will be considered

by the Commission and will be available

for inspection and copying at its

principal office in accordance with

§ 4.9(b)(6)(ii) of the Commission’s rules

of practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Orders

To Aid Public Comment

The Federal Trade Commission has

accepted separate agreements, subject to

final approval, to proposed consent

orders from Toyota Motor Sales, U.S.A.,

Inc. (‘‘Toyota’’) and Volkswagen of

America, Inc. (‘‘Volkswagen’’)

(collectively referred to as

‘‘respondents).

The proposed consent orders have

been placed on the public record for

sixty (60) days for reception of

comments by interested persons.

Comments received during this period

will become part of the public record.

After sixty (60) days, the Commission

will again review the agreements and

the comments received and will decide

whether it should withdraw from the

agreements or make final the

agreements’ proposed orders.

The complaints allege that the

respondents’ automobile lease

advertisements violate the Federal

Trade Commission Act (‘‘FTC Act’’), the

Consumer Leasing Act (‘‘CLA’’), and

Regulation M. Section 5 of the FTC Act

prohibits false, misleading, or deceptive

representations or omissions of material

information in advertisements. In

addition, Congress established statutory

disclosure requirements for lease

advertising under the CLA and directed

the Federal Reserve Board (‘‘Board’’) to

promulgate regulations implementing

this statutue—Regulation M. See 15

U.S.C. 1667–1667e; 12 CFR part 213. On

September 30, 1996, Congress passed

revisions to the CLA that became

optionally effective immediately and

that have been implemented through the

Board’s recent revisions to Regulation

M. See Title II, section 2605 of the

Omnibus Consolidated Appropriations

Act for Fiscal Year 1997, Pub. L. 104–

208, 110 Stat. 3009, 3009–473 (Sept. 30,

1996) (‘‘revised CLA’’); 61 FR 52,246

(October 7, 1996), 62 FR 15,364 (April

1, 1997), and 62 FR 16,053 (April 4,

1997) (together ‘‘revised Regulation M’’)

(to be codified at 12 CFR 213), as

amended.

The complaints against Toyota and

Volkswagen allege that respondents’

automobile lease advertisements

represent that a particular amount stated

as ‘‘down’’ or ‘‘due at lease signing’’ is

the total amount consumers must pay at

the initiation of a lease agreement to

lease the advertised vehicles. This

representation is false, according to the

complaints, because consumers must

pay additional fees beyond the amount

stated as ‘‘down’’ or ‘‘due at lease

signing,’’ such as a capitalized cost

reduction, security deposit, first

month’s payment and/or an acquisition

fee, to lease the advertised vehicles. The

complaints also allege that respondents

fail to disclose adequately lease

inception fees, often highlighting only a

low monthly payment, in their

advertisements. These practices,

according to the complaints, constitute

deceptive acts or practices in violation

of section 5(a) of the FTC Act.

The complaints further allege that

respondents’ lease advertisements fail to

disclose the terms of the offered lease in

a clear and conspicuous manner, as

required by the CLA and Regulation M.

According to the complaints,

respondents’ television lease disclosures

are not clear and conspicuous because

they appear on the screen in small type,

against a background of similar shade,

for a very short duration, and/or over a

moving background. The Toyota

complaint also alleges that Toyota’s fine

print disclosures of lease terms in direct

mail advertisements are not clear and

conspicuous. The complaints, therefore,

allege that respondents’ failure to

disclose lease terms in a clear and

conspicuous manner violates the CLA

and Regulation M. These alleged

practices would also violate the

advertising disclosure requirements of

the revised CLA and the revised

Regulation M.

The proposed consent orders contain

provisions designed to remedy the

violations charged and to prevent the

respondents from engaging in similar

acts and practices in the future.

Specifically, subparagraph I.A. of the

proposed orders prohibits respondents,

in any lease advertisement, from

misrepresenting the total amount due at

lease signing or delivery, the amount

down, and/or the downpayment,

capitalized cost reduction, or other

amount that reduces the capitalized cost

of the vehicle (or that no such amount

is required). Subparagraph I.B. of the

proposed orders also prohibits

respondents, in any lease advertisement,

from making any reference to any charge

that is part of the total amount due at

lease signing or delivery or that no such

amount is due, not including a

statement of the periodic payment, more

prominently than the disclosure of the

total amount due at lease inception. The

‘‘prominence’’ requirement prohibits the

companies from running deceptive

advertisements that highlight low

amounts ‘‘down,’’ with inadequate

disclosures of actual total inception

fees. This ‘‘prominence’’ requirement

for lease inception fees also is found in

the revised Regulation M recently

adopted by the Board.

Moreover, subparagraph I.C. of the

proposed orders prohibits respondents,

in any lease advertisement, from stating

the amount of any payment or that any

or no initial payment is required at

consummation of the lease, unless the

ad also states: (1) That the transaction

advertised is a lease; (2) the total

amount due at lease signing or delivery;

(3) whether or not a security deposit is

required; (4) the number, amount, and

timing of scheduled payments; and (5)

that an extra charge may be imposed at

the end of the lease term where the

liability of the consumer at lease end is

based on the anticipated residual value

of the vehicle. The information

enumerated above must be displayed in

the lease advertisement in a clear and

conspicuous manner. This approach is

consistent with the lease advertising

disclosure requirements of the revised

CLA and the revised Regulation M.

Paragraph II of the proposed orders

provides that lease advertisements that

comply with the disclosure

requirements of subparagraph I.C. of the

orders shall be deemed to comply with

section 184(a) of the CLA, as amended,

or § 213.7(d)(2) of the revised Regulation

M, as amended.

Paragraph III of the proposed orders

provides that certain future changes to

the CLA or Regulation M will be

incorporated into the orders.

Specifically, subparagraphs I.B. and I.C.

will be amended to incorporate future

CLA or Regulation M required

advertising disclosures that differ from

those required by the above order

paragraphs. In addition, the definition

of ‘‘total amount due at lease signing or

delivery,’’ as it applies to subparagraphs

I.B. and I.C. only, will be amended in

the same manner. The orders provide

that all other order requirements,

including the definition of ‘‘clearly and

conspicuously,’’ will survive any such

revisions.

The information required by

subparagraph I.C. must be disclosed

‘‘clearly and conspicuously’’ as defined

in the proposed orders. The ‘‘clear and
53642 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Notices

conspicuous’’ definition requires that

respondents present such lease

information within the advertisement in

a manner that is readable [or audible]

and understandable to a reasonable

consumer. This definition is consistent

with the ‘‘clear and conspicuous’’

requirement for advertising disclosures

in the revised Regulation M that

requires disclosures that consumers can

see and read (or hear) and comprehend

and in prior Commission orders and

statements, interpreting Section 5’s

prohibition of deceptive acts and

practices, that require advertising

disclosures that are readable (or audible)

and understandable to reasonable

consumers.

The purpose of this analysis is to

facilitate public comment on the

proposed orders, and it is not intended

to constitute an official interpretation of

the agreements and proposed orders or

to modify in any way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 97–27227 Filed 10–14–97; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Advisory Commission on Consumer

Protection and Quality in the Health

Care Industry; Notice of Public Meeting

In accordance with Section 10(a)(2) of

the Federal Advisory Committee Act,

Public Law 92–463, notice is hereby

given on the meeting of the Advisory

Commission on Consumer Protection

and Quality in the Health Care Industry.

This two-day meeting will be limited

only by the space available.

Place of Meeting: The Watergate Hotel;

2650 Virginia Avenue, N.W., Washington,

D.C. 20037, ((4) Subcommittee meetings: on

Tuesday, October 21, 8:00 a.m.—12:30 p.m.;

and the General Plenary Session II: on

Wednesday, October 22, 8:00 a.m.—4:30

p.m.). The Embassy Row Hilton Hotel; 2015

Massachusetts Avenue, N.W., Washington,

D.C. 20036, (General Plenary Session I, on

Tuesday, October 21, 1:00 p.m.—6:30 p.m.).

Exact meeting room locations will be

available on the Commission’s web site at

‘‘http://www.hcqalitycommission.gov’’.

Times and Dates: On Tuesday, October 21,

(4) subcommittee(s) will meet from 8:00 a.m.

until 12:30 p.m. and General Plenary Session

I will be from 1:00 p.m. to 6:30 p.m. on

Wednesday, October 22, General Plenary

Session II will be from 8:00 a.m. to 4:30 p.m.

Purpose/Agenda: To hear testimony and

continue formal proceedings of the full

Advisory Commission and the four (4)

subcommittees. Agenda items are subject to

change.

Contact Person: For more information,

including substantive program information

and summaries of the meeting, please

contact: Edward (Chip) Malin, Hubert

Humphrey Building, Room 118F, 200

Independence Avenue, S.W., Washington,

DC 20201; [202/205–3038].

Dated: October 6, 1997.

Janet Corrigan,

Executive Director, Advisory Commission on

Consumer Protection and Quality in the

Health Care Industry.

[FR Doc. 97–27225 Filed 10–14–97; 8:45 am]

BILLING CODE 4110–60–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of Inspector General

Program Exclusions: September 1997

AGENCY: Office of Inspector General,

HHS

ACTION: Notice of program exclusions.

During the month of September 1997,

the HHS Office of Inspector General

imposed exclusions in the cases set

forth below. When an exclusion is

imposed, no program payment is made

to anyone for any items or services

(other than an emergency item or

service not provided in a hospital

emergency room) furnished, ordered or

prescribed by an excluded party under

the Medicare, Medicaid, Maternal and

Child Health Services Block Grant and

Block Grants to States for Social

Services programs. In addition, no

program payment is made to any

business or facility, e.g., a hospital, that

submits bills for payment for items or

services provided by an excluded party.

Program beneficiaries remain free to

decide for themselves whether they will

continue to use the services of an

excluded party even though no program

payments will be made for items and

services provided by that excluded

party. The exclusions have national

effect and also apply to all Executive

Branch procurement and nonprocurement programs and activities.

Subject city, state Effective

date

PROGRAM–RELATED CONVICTIONS

BOWMAN, JIMMY ALLEN, TITUSVILLE, FL .......................................................................................................................................... 10/07/97

BOYD, KENNETH GEORGE, WINCHESTER, OR ................................................................................................................................. 10/01/97

BRENNAN, MANUEL FELIPE, MIAMI, FL .............................................................................................................................................. 10/02/97

BUI, MAI QUYNH, SAN JOSE, CA ......................................................................................................................................................... 10/01/97

BUSH, JANE T, MONTGOMERY, AL ..................................................................................................................................................... 10/02/97

CAMPBELL, DENNIS, W PALM BEACH, FL .......................................................................................................................................... 10/07/97

CAMPBELL, MARY A, PRINCETON, WV .............................................................................................................................................. 10/06/97

CARR, CHARLES THOMAS, BIG SPRING, TX ..................................................................................................................................... 10/05/97

CLARINGBOLD, THOMAS VERNON, TRENTON, MI ........................................................................................................................... 10/07/97

COHEN, STEVEN S, CAMP HILL, PA .................................................................................................................................................... 10/06/97

COLLIER, SAMUEL J, NORTON, VA ..................................................................................................................................................... 10/06/97

COOPER, CONNIE RUTH, ALEXANDRIA, LA ....................................................................................................................................... 10/07/97

DEL PENA, VIRGINIA, SAN JOSE, CA .................................................................................................................................................. 10/07/97

FANECA, TERRY S, BRADENTON, FL ................................................................................................................................................. 10/02/97

FERNANDEZ HERNANDEZ, TERESITA, MIAMI, FL ............................................................................................................................. 10/07/97

FISH, MARY CATHERINE, LEBANON, OR ........................................................................................................................................... 10/01/97

FLOWERS, ROSE MARIE, LITTLE ROCK, AR ...................................................................................................................................... 10/05/97

FOSTER, DONIETA, FLOWOOD, MS .................................................................................................................................................... 10/07/97

GARLING, JESSIE RENEE, TUCKER, AR ............................................................................................................................................. 10/05/97

GILL, ROSE S, YORKTOWN, VA ........................................................................................................................................................... 10/06/97

GONZALES, AMELIA, SACRAMENTO, CA ........................................................................................................................................... 10/01/97

HAMMONDS, MICHAEL G, DELTONA, FL ............................................................................................................................................ 10/02/97

HAMPTON, JOSEPH, N RICHLAND HILLS, IL ...................................................................................................................................... 10/07/97

HASAN, IQBAL, STATEN ISLAND, NY .................................................................................................................................................. 10/06/97

HEBRARD, TINA L, BEAVERTON, OR .................................................................................................................................................. 10/07/97