Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5413

the agreement and the proposed order or

to modify their terms in any way.

Donald S. Clark,

Secretary.

[FR Doc. 97–2808 Filed 2–4–97; 8:45 am]

BILLING CODE 6750–01–P

[File No. 932–3019]

The Administrative Co.; Michael P.

McIntyre; Analysis to Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: In settlement of alleged

violations of federal law prohibiting

unfair or deceptive acts or practices and

unfair methods of competition, this

consent agreement, accepted subject to

final Commission approval, would

prohibit, among other things, The

Administrative Company and McIntyre

from making misrepresentations about

living trusts, and would require them to

make certain disclosures with regard to

legal challenges that can be made

against living trusts, the possibility of

probate for certain estates regardless of

whether living trusts are used, and the

transfer of consumers’ assets into the

trusts. The agreement settles allegations

that the respondents made numerous

false statements about the benefits and

appropriateness of living trusts, in

general, and about living trusts they

sold, in particular.

DATES: Comments must be received on

or before April 7, 1997.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

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

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Janice Charter, Federal Trade

Commission, Denver Regional Office,

1961 Stout Street, Suite 1523, Denver,

CO 80294. (303) 844–2272. Elizabeth

Palmquist, Federal Trade Commission,

Denver Regional Office, 1961 Stout

Street, Suite 1523, Denver, CO 80294.

(303) 844–2272.

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 a 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 sixty (60) days. The following

Analysis to Aid Public Comment

describes the terms of the consent

agreement, and the allegations in the

accompanying complaint. An electronic

copy of the full text of the consent

agreement package can be obtained from

the Commission Actions section of the

FTC Home Page (for January 16, 1997),

on the World Wide Web, at ‘‘http://

www.ftc.gov/os/actions/htm.’’ A paper

copy 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 Order to

Aid Public Comment

The Federal Trade Commission has

agreed to accept, subject to final

approval, a proposed consent order

settling charges that Michael P.

McIntyre and The Administrative

Company (‘‘TAC’’) violated Section 5 of

the Federal Trade Commission Act.

The proposed consent order has 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

agreement and the comments received

and will decide whether it should

withdraw from the agreement or make

final the agreement’s proposed order.

This matter concerns the sale of living

trusts to senior citizens through

membership in the American

Association for Senior Citizens

(‘‘AASC’’). The respondents covered by

the proposed order include The

Administrative Company, the company

through which all of AASC’s business

was conducted, and Michael P.

McIntyre, the President of TAC.

The complaint alleges that the

respondents violated section 5 of the

Federal Trade Commission Act by

making numerous misrepresentations

about the advantages of living trusts

over other forms of estate planning.

Specifically, the complaint alleges that

respondents have misrepresented that

(1) the use of a living trust avoids all

administrative costs; (2) at death, a

living trust ensures that assets are

distributed immediately or almost

immediately; (3) a living trust cannot be

challenged; (4) living trusts are prepared

by local attorneys; (5) a living trust

protects against catastrophic medical

costs; (6) a living trust is the appropriate

estate planning device for every

consumer; and (7) there are no

disadvantages to a living trust.

The proposed consent order contains

provisions which are designed to

remedy the alleged violations and to

prevent the respondents from engaging

in similar acts and practices in the

future. The proposed order would

prohibit the respondents from making

the misrepresentations alleged in the

complaint and set forth above.

Additionally, the order would require

the respondents to disclose to

prospective purchasers that living trusts

may be challenged on similar grounds

as wills and that they may not be

appropriate in all instances.

Under the order, the respondents also

would be required to provide four

affirmative disclosures in situations

where the statements would be true. (1)

Some states have created a mechanism

for ‘‘informal probate’’ of an estate if the

estate meets certain criteria, which

significantly reduces the time involved

in probate. This disclosure would be

required in states where informal

probate is available. (2) If the transfer of

an individual’s assets into the living

trust is not included in the price of

creating the living trust, that fact must

be disclosed. (3) If it is the sole

responsibility of the purchaser of the

living trust to transfer assets into the

trust, that fact must be disclosed. (4) In

some states, but not in others, creditors

have a longer period of time to file

claims against a living trust than against

a probated estate. This fact would have

to be disclosed in such states.

The proposed order would require the

respondents to distribute the proposed

order to their officers, agents, and all

personnel who participate in any way in

respondents’ sales activities relating to

living trusts. Additionally, the order

would require TAC to notify the

Commission of any changes in its

corporate structure, and Michael

McIntyre to notify the Commission of

his affiliation with any new business.

The proposed order also requires the

respondents to retain for five years all

materials that they rely upon in making

representations covered by the order.

Finally, the respondents are required to

file one or more compliance reports

detailing their compliance with the

order.

The purpose of this analysis is to

facilitate public comment on the

proposed order, and it is not intended

to constitute an official interpretation of

the agreement and proposed order, nor

to modify in any way their terms. The

proposed consent order has been

entered into for settlement purposes

only and does not constitute an

admission by the respondents that the
5414 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices

1 In this Analysis to Aid Public Comment, Herb

Gordon Auto, Inc. dba Herb Gordon Auto World,

Herb Gordon Dodge, Herb Gordon Mercedes-Benz,

Herb Gordon Nissan, Herb Gordon Oldsmobile,

Herb Gordon Volvo and Herb Gordon Used Cars are

referred to collectively as ‘‘respondent Herb Gordon

Auto’’ or ‘‘respondent.’’

law has been violated as alleged in the

complaint.

Donald S. Clark,

Secretary.

[FR Doc. 97–2809 Filed 2–4–97; 8:45 am]

BILLING CODE 6750–01–P

[File No. 942–3114]

Herb Gordon Auto World, Inc. d/b/a

Herb Gordon Auto World, Herb Gordon

Dodge, Herb Gordon Mercedes-Benz,

Herb Gordon Nissan, Herb Gordon

Oldsmobile, Herb Gordon Volvo, and

Herb Gordon Used Cars; Analysis to

Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: In settlement of alleged

violations of federal law prohibiting

unfair or deceptive acts or practices and

unfair methods of competition, this

consent agreement, accepted subject to

final Commission approval, would

prohibit, among other things, the Silver

Spring, Maryland-based automobile

dealerships from misrepresenting

financing terms and would require them

them to comply with federal laws

mandating accurate disclosure of the

annual percentage rate and monthly

payments in financed offers and clear

and conspicuous disclosure of major

automobile deal terms. They also agreed

not to advertise terms that are not

actually available to consumers. The

Commission had alleged that, in several

car leasing advertising campaigns, Herb

Gordon Auto had not included all of the

disclosures of lease costs and terms

required under the Consumer Leasing

Act.

DATES: Comments must be received on

or before April 7, 1997.

ADDRESSES: Comments 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, 6th and Pennsylvania Ave,

NW, Washington, DC 20580. (202) 326–

3224. Carole Reynolds, Federal Trade

Commission, 6th and Pennsylvania Ave,

NW, Washington, DC 20580. (202) 326–

3230.

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 a 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 sixty (60) days. The following

Analysis to Aid Public Comment

describes the terms of the consent

agreement, and the allegations in the

accompanying complaint. An electronic

copy of the full text of the consent

agreement package can be obtained from

the Commission Actions section of the

FTC Home Page (for January 23, 1997),

on the World Wide Web, at ‘‘http://

www.ftc.gov/os/actions/htm.’’ A paper

copy 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 Order to

Aid Public Comment

The Federal Trade Commission has

accepted an agreement to a proposed

consent order from respondent Herb

Gordon Auto, Inc. dba Herb Gordon

Auto World, Herb Gordon Dodge, Herb

Gordon Mercedes-Benz, Herb Gordon

Nissan, Herb Gordon Oldsmobile, Herb

Gordon Volvo, and Herb Gordon Used

Cars.1

The proposed consent order has 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

agreement and the comments received

and will decide whether it should

withdraw from the agreement or make

final the agreement’s proposed order.

The complaint alleges that respondent

Herb Gordon Auto has disseminated or

caused to be disseminated

advertisements that state initial low

monthly payment amounts and promote

the ‘‘luxury of low payments’’ and in

fine print, inter alia, state an initial

number of payments, a downpayment

and another amount described as a

‘‘purchase option’’ (‘‘Gold Key Plus’’

advertisements). The complaint alleges

that the Gold Key Plus advertisements

misrepresent that the additional amount

is optional and fail to disclose that the

financing to be signed at purchase

requires the consumer to make a

substantial balloon payment at the

conclusion of the initial payments,

which is a mandatory obligation, and

that respondent, therefore, has engaged

in a deceptive act or practice in

violation of section 5(a) of the Federal

Trade Commission Act (‘‘FTC Act’). The

complaint also alleges that the Gold Key

Plus advertisements fail to accurately

state the terms of repayment, by failing

to disclose that the additional amount is

a final payment and by inaccurately

stating that the amount is optional

when, in fact, it is mandatory based on

the financing to be signed at purchase,

in violation of the Truth in Lending Act

(‘‘TILA’’) and § 226.24(c) of Regulation

Z. The complaint also alleges that the

Gold Key Plus advertisements fail to

disclose the annual percentage rate for

the financing, using that term or the

abbreviation ‘‘APR,’’ in violation of the

TILA and § 226.24(c) of Regulation Z,

and that this is a deceptive act or

practice in violation of section 5(a) of

the FTC Act.

The complaint also alleges that

respondent Herb Gordon Auto has

disseminated or caused to be

disseminated advertisements that state a

low downpayment and initial low

monthly payment amounts and

thereafter, inter alia, state that the

‘‘balance of 48 payments will be higher

than 1st 12 months’’ and ‘‘cost per

$1,000 borrowed $20.52’’ (‘‘Drive for

95’’ advertisements). The complaint

alleges that the Drive for 95

advertisements misrepresent and fail to

accurately disclose the amount of the

second series of installment payments

required at conclusion of the initial

payments, based on the financing to be

signed at purchase, and that respondent,

therefore, has engaged in a deceptive act

or practice, in violation of section 5(a)

of the FTC Act. The complaint also

alleges that the Drive for 95

advertisements, inter alia, fail to

accurately state the terms of repayment,

by failing to accurately disclose the

amount of the second series of

installment payments required at

conclusion of the initial payments,

based on the financing to be signed at

purchase, in violation of the TILA and

§ 226.24(c) of Regulation Z.

The complaint also alleges that in fine

print in the Gold Key Plus

advertisements, respondent’s

advertisements state an initial number

of payments, a downpayment and

another amount described as a

‘‘purchase option’’ (the ‘‘disclaimer’’).

The complaint also alleges that in fine

print (print), in fine print for a short

duration (television) and orally for a

short duration (radio) in the Drive for 95