[Federal Register Volume 77, Number 54 (Tuesday, March 20, 2012)]
[Notices]
[Pages 16224-16225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-6727]


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FEDERAL TRADE COMMISSION

[File No. 112 3209]


Billion Auto, Inc.; 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 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 April 16, 2012.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Billion Auto, File No. 
112 3209'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/billionautoconsent, 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: Robin Thurston (202-326-2752), FTC, 
Bureau of Consumer Protection, 600 Pennsylvania Avenue NW., Washington, 
DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission 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 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 March 14, 2012), 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 April 16, 2012. 
Write ``Billion Auto, File No. 112 3209'' 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 obtained from any person and which is privileged or 
confidential,'' as provided 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

[[Page 16225]]

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/billionautoconsent 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 ``Billion Auto, File No. 
112 3209'' 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 April 16, 2012. 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 Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission (``FTC'') has accepted, subject to 
final approval, an agreement containing a consent order from Billion 
Auto, 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 action or make final 
the agreement's proposed order.
    The respondent is a motor vehicle dealer. The matter involves its 
advertising of the purchase, financing, and leasing of its motor 
vehicles. According to the FTC complaint, respondent has represented 
that when a consumer trades in a used vehicle in order to purchase 
another vehicle, respondent will pay off the balance of the loan on the 
trade-in vehicle such that the consumer will have no remaining 
obligation for any amount of that loan. The complaint alleges that in 
fact, when a consumer trades in a used vehicle with negative equity 
(i.e. the loan balance on the vehicle exceeds the vehicle's value) in 
order to purchase another vehicle, respondent does not pay off the 
balance of the loan on the trade-in vehicle such that the consumer will 
have no remaining obligation for any amount of that loan. Instead, the 
respondent includes the amount of the negative equity in the loan for 
the newly purchased vehicle. The complaint alleges therefore that the 
representation is false or misleading in violation of Section 5 of the 
FTC Act. In addition, the complaint alleges violations of the Truth in 
Lending Act (``TILA'') and Regulation Z for failing to disclose 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 disclose the costs and terms of certain leases offered.
    The proposed order is designed to prevent the respondent from 
engaging in similar deceptive practices in the future. Part I of the 
proposed order prohibits the respondent from misrepresenting that it 
will pay the remaining loan balance on a consumer's trade-in vehicle 
such that the consumer will have no obligation for any amount of that 
loan. It also prohibits misrepresenting any other material fact 
relating to the financing or leasing of a motor vehicle.
    Part II of the proposed order addresses the TILA allegations. It 
requires clear and conspicuous TILA/Regulation Z disclosures when 
advertising any of the relevant triggering terms with regard to issuing 
consumer credit. It also requires that if any finance charge is 
advertised, the rate be stated as an ``annual percentage rate'' using 
that term or the abbreviation ``APR.'' In addition, Part II prohibits 
any other violation of TILA or Regulation Z.
    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 if it states relevant 
triggering terms, including the monthly lease payment. In addition, 
Part III prohibits any other violation of CLA and Regulation M.
    Part IV of the proposed order requires respondent to keep copies of 
relevant advertisements and materials substantiating claims made in the 
advertisements. Part V requires that respondent provide copies of the 
order to certain of its personnel. Part VI requires notification of the 
Commission regarding changes in corporate structure that might affect 
compliance obligations under the order. Part VII requires the 
respondent 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. 2012-6727 Filed 3-19-12; 8:45 am]
BILLING CODE 6750-01-P