[Federal Register Volume 82, Number 235 (Friday, December 8, 2017)]
[Notices]
[Pages 57982-57984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26443]


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FEDERAL TRADE COMMISSION

[File No. 172 3009]


Cowboy AG LLC; Analysis 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. The attached Analysis to Aid Public Comment describes both 
the allegations in the 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 January 2, 2018.

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: ``In the Matter of 
Cowboy AG LLC doing business as Cowboy Toyota and Cowboy Scion, File 
No. 172 3009'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/cowboyconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, write ``In the Matter of Cowboy AG LLC doing business as 
Cowboy Toyota and Cowboy Scion, File No. 172 3009'' on your comment and 
on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary,

[[Page 57983]]

600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 
20580, or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: James R. Golder, Attorney, (214-979-
9376), Southwest Region, 1999 Bryan Street, Suite 2150, Dallas, TX 
75201.

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 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 December 1, 2018), on the World Wide Web, 
at https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before January 2, 2018. 
Write ``In the Matter of Cowboy AG LLC doing business as Cowboy Toyota 
and Cowboy Scion, File No. 172 3009'' 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 https://www.ftc.gov/policy/public-comments.
    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/cowboyconsent 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 prefer to file your comment on paper, write ``In the Matter 
of Cowboy AG LLC doing business as Cowboy Toyota and Cowboy Scion, File 
No. 172 3009'' on your comment and on the envelope, and mail your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street, SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 
20024. If possible, submit your paper comment to the Commission by 
courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
Web site at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else'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, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
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)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC Web site--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC Web site, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC 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 January 2, 2018. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

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 Cowboy AG LLC, 
doing business as Cowboy Toyota and Cowboy Scion. The proposed consent 
order has been placed on the public record for 30 days for receipt of 
comments by interested persons. Comments received during this period 
will become part of the public record. After 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 that engaged in 
substantial Spanish-language advertising, but only provided disclosures 
in fine-print English. According to the FTC complaint, respondent 
advertised that consumers could purchase or lease advertised vehicles 
at certain favorable terms prominently stated in its advertisements. 
The complaint alleges that respondent violated Section 5(a) of the 
Federal Trade Commission Act, 15 U.S.C. 45(a), because it 
misrepresented in its Spanish-language advertisements that (1) 
consumers could purchase new 2016 automobiles with no down payments, 
(2) that advertised low monthly payments were available to those who 
financed automobile purchases, (3) that advertised interest rates, 
monthly payments, and other terms were available to consumers with bad 
credit, and (4) that certain new 2016 model year Toyotas were available 
for purchase in 2017. This information would be material to consumers 
in deciding whether to visit respondent's dealership and whether to 
purchase or lease an automobile from respondent.
    The complaint also alleges that respondent's credit sale 
advertisements violated the Truth in Lending Act (TILA) and Regulation 
Z by failing to disclose or to disclose clearly and conspicuously 
required terms.

[[Page 57984]]

Specifically, respondent's advertisements prominently stated the amount 
of the finance charge and the number of payments or period of repayment 
for certain vehicles--all triggering terms under the TILA--but failed 
to disclose, or unclearly and inconspicuously disclosed at the bottom 
of the ad in much smaller type, the required information set forth by 
the TILA. Finally, the complaint alleges that respondent's leasing 
advertisements violated the Consumer Leasing Act (CLA) and Regulation M 
by failing to disclose or to disclose clearly and conspicuously 
required terms. Specifically, respondent's advertisements prominently 
stated the monthly payment amounts for certain vehicles--a triggering 
term under the CLA--but failed to disclose, or unclearly and 
inconspicuously disclosed at the bottom of the ad in much smaller type, 
the required information set forth by the CLA.
    The proposed order is designed to prevent the respondent from 
engaging in similar deceptive practices in the future.
     Definition B. of the order defines ``clearly and 
conspicuously'' to mean that required disclosures must be difficult to 
miss (i.e., easily noticeable) and easily understandable by ordinary 
consumers, including that disclosures must appear in the same language 
as the representation requiring the disclosure is made (e.g. Spanish 
advertisement [rarr] Spanish disclosure).
     Part I.A.1. provides that respondent shall not 
misrepresent the cost of financing the purchase of an automobile, 
including by misrepresenting the amount or percentage of the down 
payment, 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.
     Part I.A.2. provides that respondent shall not 
misrepresent the cost of leasing an automobile, including by 
misrepresenting the total amount due at lease inception, the down 
payment, 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. provides that respondent shall not misrepresent 
any qualification or restriction on the consumer's ability to obtain 
the represented financing or leasing terms, including any qualification 
or restriction based on the consumer's credit score or credit history.
     Part I.C. provides that respondent shall not represent any 
financing or leasing term, unless the representation is non-misleading, 
and the advertisement clearly and conspicuously discloses all 
qualifications or restrictions on the consumer's ability to obtain the 
represented financing or leasing term, including any qualifications or 
restrictions that respondent's lender, lessor, or any other entity may 
impose based on a consumer's credit score or credit history. 
Additionally, if a majority of consumers likely will not be able to 
meet a credit score qualification or restriction stated in the 
advertisement, respondent must clearly and conspicuously disclose that 
fact.
     Part I.D. provides that respondent shall not misrepresent 
the number of vehicles, makes, or models that are available for 
purchase or lease.
     Part I.E. provides that respondent shall not misrepresent 
any other material fact about the price, sale, financing, or leasing of 
any automobile.
     Part II of the order addresses the TILA and Regulation Z 
allegations by prohibiting credit sale advertisements that:
    A. State the amount or percentage of any down payment, the number 
of payments or period of repayment, the amount of any payment, or the 
amount of any finance charge, without disclosing clearly and 
conspicuously all of the following terms:
    [cir] The amount or percentage of the down payment;
    [cir] The terms of repayment; and
    [cir] The annual percentage rate, using the term ``annual 
percentage rate'' or the abbreviation ``APR.'' If the annual percentage 
rate may be increased after consummation of the credit transaction, 
that fact must also be disclosed; or
    B. State a rate of finance charge without stating the rate as an 
``annual percentage rate'' or the abbreviation ``APR,'' using that 
term; or
    C. Fail to comply in any respect with Regulation Z, 12 CFR part 
226, as amended, and the Truth in Lending Act, as amended, 15 U.S.C. 
1601-1667f.
     Part III of the order addresses the CLA and Regulation M 
allegations by prohibiting lease advertisements that:
    A. State the amount of any payment or that any or no initial 
payment is required at lease inception, without disclosing clearly and 
conspicuously the following terms:
    [cir] That the transaction advertised is a lease;
    [cir] the total amount due prior to or at consummation or by 
delivery, if delivery occurs after consummation;
    [cir] the number, amounts, and timing of scheduled payments;
    [cir] whether or not a security deposit is required; and
    [cir] that an extra charge may be imposed at the end of the lease 
term where the consumer's liability (if any) is based on the difference 
between the residual value of the leased property and its realized 
value at the end of the lease term.
    B. Fail to comply in any respect with Regulation M, 12 CFR part 
213, as amended, and the Consumer Leasing Act, 15 U.S.C. 1667-1667f, as 
amended.
     Part IV requires respondent to provide copies of the order 
to certain personnel and to obtain acknowledgments of receipt.
     Part V requires respondent to file compliance reports with 
the Commission, including notices regarding changes in corporate 
structure that might affect compliance obligations under the order. 
Part VI requires respondent to create certain records for 15 years and 
to retain them for 5 years. Part VII provides the Commission certain 
mechanisms to monitor respondent's compliance with the order. Part VIII 
is a provision that ``sunsets'' the order after 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. 2017-26443 Filed 12-7-17; 8:45 am]
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