[Federal Register Volume 79, Number 13 (Tuesday, January 21, 2014)]
[Notices]
[Pages 3370-3372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-00998]


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FEDERAL TRADE COMMISSION

[File No. 132 3165]


New World Auto Imports, Inc., Doing Business as Southwest Kia, et 
al.; 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 of 
Proposed Consent Order 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 February 10, 2014.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/southwestkiaconsent online or on paper, 
by following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Southwest Kia--Consent 
Agreement; File No. 132-3165'' on your comment and file your comment 
online at https://ftcpublic.commentworks.com/ftc/southwestkiaconsenthttps://ftcpublic.commentworks.com/ftc/fidelitynationalconsent 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: Mark Glassman, Bureau of Consumer 
Protection, (202-326-2826), 600 Pennsylvania Avenue NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing 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

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Home Page (for January 9, 2014), 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 February 10, 
2014. Write ``Southwest Kia--Consent Agreement; File No. 132-3165'' 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 privileged or confidential,'' as discussed 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 
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/southwestkiaconsent 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 ``Southwest Kia--Consent 
Agreement; File No. 132-3165'' 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 February 10, 2014. 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 Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``FTC'') has accepted, subject to 
final approval, an agreement containing a consent order from New World 
Auto Imports, Inc., d/b/a Southwest Kia, New World Auto Imports of 
Rockwall, Inc., d/b/a Southwest Kia, and Southwest Kia of Rockwall, and 
Hampton Two Auto Corporation, d/b/a Southwest Kia, Southwest Kia-NW, 
and Southwest Kia Mesquite. 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 respondents are motor vehicle dealers. According to the FTC 
complaint, respondents have advertised that consumers can finance the 
purchase of vehicles for the advertised terms, including the advertised 
monthly payment amount. The complaint alleges that, in fact, the 
monthly payment increases dramatically at the end of the transaction, 
because consumers owe a balloon payment of many thousand dollars. The 
complaint alleges, therefore, that respondents' representations are 
false or misleading in violation of Section 5 of the FTC Act. The 
complaint also alleges that respondents have advertised that consumers 
can pay $27 at lease inception to lease the advertised vehicles for the 
advertised monthly payment amount. The complaints alleges that, in 
fact, consumers must also pay fees, including but not limited to an 
acquisition fee, which is $595, and the first month's payment, for a 
total of at least $700 for each vehicle. The complaint alleges, 
therefore, that respondents' representations are false or misleading in 
violation of Section 5 of the FTC Act. In addition, the complaint 
alleges a violation of the Truth in Lending Act (``TILA'') and 
Regulation Z for failing to disclose clearly and conspicuously 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 clearly and conspicuously disclose the costs and terms when 
advertising leases.
    The proposed order is designed to prevent the respondents from 
engaging in similar deceptive practices in the future. Part I.A 
prohibits the respondents from misrepresenting the cost of: (1) 
Purchasing a vehicle with financing, including but not necessarily 
limited to the amount or percentage of the downpayment, the number of 
payments or period of repayment, the amount of any payment, and the 
repayment obligation over the full term of the loan, including any 
balloon payment; or (2) leasing a vehicle, including but not limited to 
the total amount due at lease inception, the downpayment, amount down, 
acquisition fee, capitalized cost reduction, any other amount required 
to be paid at lease inception, and the amounts of all monthly or other 
periodic payments. Part I.B prohibits the respondents from 
misrepresenting any other material fact about the price, sale, 
financing, or leasing of any vehicle.
    Part II of the proposed order addresses the TILA allegation. It 
requires that the respondents clearly and conspicuously make all of the 
disclosures required by TILA and Regulation Z if they state the amount 
or percentage of any

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downpayment, the number of payments or period of repayment, the amount 
of any payment, or the amount of any finance charge. In addition, Part 
II prohibits the respondents from stating a rate of finance charge 
without stating the rate as an ``annual percentage rate'' or the 
abbreviation ``APR,'' using that term. Part II also prohibits any other 
violation of TILA and Regulation Z.
    Part III of the proposed order addresses the CLA allegation. It 
requires that the respondents clearly and conspicuously make all of the 
disclosures required by CLA and Regulation M if they state relevant 
trigger terms, including the monthly lease payment or the amount of any 
payment or that any or no initial payment is required at lease 
inception.
    Part IV of the proposed order requires respondents to keep copies 
of relevant advertisements and materials substantiating claims made in 
the advertisements. Part V requires that respondents provide copies of 
the order to certain of their personnel. Part VI requires notification 
to the Commission regarding changes in corporate structure that might 
affect compliance obligations under the order. Part VII requires the 
respondents 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. 2014-00998 Filed 1-17-14; 8:45 am]
BILLING CODE 6750-01-P