[Federal Register Volume 65, Number 29 (Friday, February 11, 2000)]
[Notices]
[Pages 7017-7018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3236]


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

FEDERAL TRADE COMMISSION

[File No. 992 3228]


DBC Financial, Inc., 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.

DATE: Comments should be directed to: FTC/Office of the Secretary, Room 
159, 600 Pennsylvania Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Michelle Chua, FTC/S-4429, 600

[[Page 7018]]

Pennsylvania Ave., NW, Washington, DC 20580. (202) 326-3248.

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 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 February 4, 2000), on the World Wide Web, at ``http://www.ftc.gov/
ftc/formal.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW, 
Washington, DC 20580. Two paper copies of each comment should be 
accompanied, if possible, by a 3\1/2\ inch diskette containing an 
electronic copy of the comment. 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, subject to final 
approval, an agreement to a proposed consent order from DBC Financial, 
Inc. (``DBC Financial''). The agreement would settle a complaint by the 
Federal Trade Commission that DBC Financial engaged in deceptive acts 
or practices in violation of Section 5(a) of the Federal Trade 
Commission Act.
    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 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 representations made by DBC Financial in its 
advertising of the Delaware Bank Card, an automated teller machine 
(``ATM'') bank card that offers direct deposit services with an 
affiliated bank. The administrative complaint alleges that DBC 
Financial violated the FTC Act by falsely representing: (1) that use of 
the Delaware Bank Card requires no upfront fees, when, in fact, use of 
the card requires an account setup fee of $19.95, as well as a monthly 
service fee of $9.95; (2) that the Delaware Bank Card is affiliated 
with the United States government agency, institution, or program, when 
in fact it is not; and (3) that use of the Delaware Bank Card 
automatically provides free overdraft protection services of up to 
$1,000 a year, when in fact the card charges an overdraft protection 
fee of $19.95 for every month in which the consumer's account is 
overdrawn by up to $80.00.
    To remedy the violations charged and to prevent respondent from 
engaging in similar acts and practices in the future, the proposed 
order contains injunctive provisions and a consumer redress program. 
Part I of the order prohibits respondent, in connection with the 
advertising or sale of the Delaware Bank Card or any Bank Card or Bank 
Card-related service or product, from making any misrepresentation or 
material omission concerning the costs, benefits, or conditions of the 
Bank Card or Bank Card-related service or product, including the 
following: (1) that use of the Bank Card requires no up-front fees, if 
in fact DBC Financial is charging an Account Set-up fee or any other 
initial fee; and (2) that use of the Bank Card provides free of charge 
any overdraft protection services, if in fact DBC Financial is charging 
an overdraft protection fee.
    Part II of the order prohibits respondent, in connection with the 
advertising or sale of the Delaware Bank Card or any Bank Card or Bank 
Card-related service or product, from misrepresenting that DBC 
Financial or any of its Bank Card or Bank Card-related service or 
products are affiliated in any way with any United States governmental 
agency, institution, or program.
    Part III of the order requires respondent to clearly and 
conspicuously disclose, in connection with any representation about the 
availability of electronic transfer of funds from any government 
entity, the following: ``NOTICE: The [Delaware Bank Card or Name of 
Bank Card] is NOT affiliated in any way with any federal government 
agency or program.'' This disclosure is not required, however, to the 
extent that respondent is promoting a U.S. Treasury-designated ETA on 
behalf of a financial institution that is participating in the 
government ETA program.
    Part IV of the order requires respondent to pay $250,000.00 for the 
redress program and administrative costs. The redress program applies 
to certain consumers who, as of August 31, 1999, had an active Delaware 
Bank Card account and who were charged an account set-up fee. In 
addition, Part V of the order requires respondent to waive the account 
set-up fee of $19.95 for all Delaware Bank Card accounts opened between 
August 31, 1999 and January 31, 2000.
    The proposed order also contains provisions regarding distribution 
of the order, record-keeping, notification of changes in corporate 
status, termination of the order, and the filing of a compliance 
report.
    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 the proposed order or to modify 
their terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-3236 Filed 2-10-00; 8:45 am]
BILLING CODE 6750-01-M