[Federal Register Volume 63, Number 163 (Monday, August 24, 1998)]
[Notices]
[Pages 45062-45063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22640]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 972-3188]


Montgomery Ward Credit Corporation, et al.; Analysis to Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

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 that accompanies the consent agreement 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 October 23, 1998.

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:
Russell Damtoft, Federal Trade Commission, Chicago Regional Office, 55 
E. Monroe Street, Suite 1860, Chicago, IL 60603-5701. (312) 960-5634.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 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 complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for August 7, 1998), on the world Wide Web, at ``http://www.ftc.gov/
os/actions97.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 Section 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 Montgomery Ward Credit Corporation and 
General Electric Capital Corporation. The proposed respondent 
Montgomery Ward Credit Corporation is a wholly owned subsidiary of 
General Electric Capital Corporation that provides credit card services 
for Montgomery Ward & Co., Inc., a large retailer. The proposed 
respondent General Electric Credit Corporation provides credit card 
services for a number of other businesses including several large 
retailers.
    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 and take other appropriate action or make 
final the agreement's proposed order.
    The Commission's complaint alleges several unfair or deceptive acts 
or practices related to the proposed respondent's policy of inducing 
consumers who have filed for bankruptcy protection to sign agreements 
reaffirming debts owed to proposed respondent prior to the filing of 
the bankruptcy petition. The complaint charges that the proposed

[[Page 45063]]

respondent: falsely represented to consumers that signed reaffirmation 
agreements would be filed with the bankruptcy courts, as required by 
the United States Bankruptcy Code; falsely represented to consumers 
that debts associated with unfiled reaffirmation agreements, or 
agreements that were filed but not approved by the bankruptcy courts, 
were legally binding on the consumers; and unfairly collected debts 
that it was not permitted by law to collect. The proposed consent order 
contains provisions designed to remedy the violations charged and to 
prevent the proposed respondent from engaging in similar acts in the 
future.
    The proposed consent order preserves the Commission's right to seek 
consumer redress if the Commission determines that redress to consumers 
provided through related named and unnamed legal actions is not 
adequate.
    Part I of the proposed order prohibits the proposed respondent from 
misrepresenting to consumers who have filed petitions for bankruptcy 
protection under the United States Bankruptcy Code that (A) 
reaffirmation agreements will be filed in bankruptcy court; or (B) any 
reaffirmation agreement is legally binding on the consumer. Part I.C of 
the proposed order prohibits the proposed respondent from collecting 
any debt (including any interest, fee, charge, or expense incidental to 
the principal obligation) that has been legally discharged in 
bankruptcy proceedings and that the proposed respondent is not 
permitted by law to collect. Part II of the proposed order prohibits 
the proposed respondent from making any misrepresentation in the 
collection of any debt subject to a pending bankruptcy proceeding.
    Part III of the proposed order contains record keeping requirements 
for materials that demonstrate the compliance of the proposed 
respondent with the proposed order. Part IV requires distribution of a 
copy of the consent decree to certain current and future personnel who 
have responsibilities related to collecting debts subject to bankruptcy 
proceedings.
    Part V provides for Commission notification upon any change in the 
corporate respondent affecting compliance obligations arising under the 
order. Part VI requires the proposed respondent to notify the 
Commission of proposed settlement terms in related actions filed by 
various named and unnamed parties. Part VII requires the filing of 
compliance report(s). Finally, Part VIII provides for the termination 
of the order after twenty years under certain circumstances.
    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 or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-22640 Filed 8-21-98; 8:45 am]
BILLING CODE 6750-01-M