Markets Wired

Commission Reopens Public Comment Period On Used Car Rule

– The Commission has reopened the public comment period for the regulatory review of the Used Motor Vehicle Trade Regulation Rule (Used Car Rule) through June 10, 2009. On July 21, 2008, the FTC issued a Federal Register notice seeking public comments on the effectiveness and impact of the Rule, which was promulgated in 1984 and updated in 1995. The Used Car Rule requires used car dealers to disclose on a window sticker (the Buyers Guide) whether they are offering a dealer warranty, and if so, its basic terms and conditions. The Rule also requires that dealers use Spanish-language versions of the Buyers Guide when conducting sales in Spanish.

In the July notice, the FTC stated that the public comment period regarding the review of the Rule would end on September 19, 2008. Based on the request of several organizations, the Commission extended the public comment period until November 19, 2008, and is now reopening the comment period for an additional 45 days. Information on how and where to submit comments can be found in a new Federal Register notice on the Commission’s Web site.

The Commission vote approving the extension of the public comment period was 4-0. (FTC File No. P087604; the staff contact is John C. Hallerud, FTC Midwest Region, Chicago, 312-960-5615; see press release dated July 16, 2008, at http://www.ftc.gov/opa/2008/07/ucr.shtm.)

Commission Approves Amended Complaint in Matter of Group One Networks, Inc.

– The Commission has approved an amended complaint that adds a new defendant and charges in the action currently pending against Group One Networks, Inc. The original complaint, filed in February 2009, alleged deception in the marketing of an advance-fee credit card, unauthorized billing in a separate online scam, and violations of the FTC’s Telemarketing Sales Rule (TSR), including its Do Not Call Provisions. Through the amended complaint, the Commission is adding four defendants to the case: 1) Credit First Financial Solution, LLC; 2) Group One Administrative, Inc.; 3) Tall Pines Administrative Services, LLC; and 4) Suncoast Data Services, LLC.

The amended complaint also includes new counts alleging that the defendants violated the FTC Act and TSR in marketing their latest program, an interest-rate reduction program called Credit First Financial Solutions, by misrepresenting that they would lower consumers’ interest rates by negotiating with creditors, would save consumers between $1,500 and $20,000 within 30 days of enrollment, would provide a full refund if consumers did not get the promised
savings, and that they had been in business since 1997 and had relationships with thousands of financial institutions. The defendants currently are subject to preliminary injunction that prohibits them from violating the FTC Act and the TSR, freezes their assets, and appoints a receiver over the corporate defendants. No trial date has been set.

The vote authorizing the staff to file the amended complaint was 4-0. (FTC File No. X090027, Civ. No. 08:09-cv-352-T-26MAP; the staff contact is J. Ronald Brooke, Jr., Bureau of Consumer Protection, 202-326-3484; see press release dated March 4, 2009, at http://www.ftc.gov/opa/2009/03/groupone.shtm.)

Commission Proposes Amendments to Fuel Economy Guide

– The Commission has proposed amendments to the agency’s Guide Concerning Fuel Economy Advertising for New Automobiles (the Fuel Economy Guide) (16 C.F.R. Part 259). The Fuel Economy Guide was adopted in 1975 to prevent deceptive fuel economy advertising and to facilitate the use of fuel economy information in advertising. The proposed amendments would change the Guide to reflect developments in automobile technology, as well as changes to the U.S. Environmental Protection Agency’s (EPA) fuel economy labeling rules for new automobiles.

As detailed in the Federal Register notice approved by the Commission, which will be published soon and can be found now as a link to this press release on the Commission’s Web site, the proposed amendments fall into three principal areas: 1) changes to terms and definitions to ensure consistency with EPA’s revised fuel economy labeling requirements; 2) modifications to expand the scope of existing guidelines to new vehicle types that run on fuels other than gasoline, such as natural gas and electricity; and 3) inclusion of guidance related to cruising range information in advertisements for vehicles that run on alternative fuels. The notice also explains how to submit public comments, which the Commission must receive by June 26, 2009.

The Commission vote approving publication of the Federal Register notice was 4-0. (FTC File No. R7711008; the staff contact is Hampton Newsome, Bureau of Consumer Protection, 202-326-2889; see press release dated May 4, 2007 at http://www.ftc.gov/opa/2007/05/fyi07241.shtm.)

Joint FTC/DOJ Comment Says Supreme Court of Hawaii’s Draft Rule on the Unauthorized Practice of Law Would Unduly Restrict Activities of Non-lawyers

– In a comment jointly filed with the Supreme Court of Hawaii, the Federal Trade Commission and the U.S. Department of Justice (DOJ) advised that a proposed rule concerning the practice of law could unduly restrict the activities of non-lawyers in Hawaii. The Federal Trade Commission and the U.S. Department of Justice (DOJ) have filed a joint comment addresses with the Supreme Court of Hawaii’s regarding its revised version of a rule proposed by the Hawaii State Bar Association (HSBA) concerning the unauthorized practice of law in the state. According to the joint comment, the proposed rule, which defines the practice of law and would assist with regulation, by clarifying what is and is not the practice of law, could unduly restrict the activities of non-lawyers in Hawaii.

The Commission and DOJ commented in January 2008 on the original version of the proposed rule, expressing concern that the general definition of the practice of law proposed by the HSBA likely would restrict non-lawyers from competing with lawyers, to the detriment of consumers. The comment explains that although the revised proposal addressed many of the concerns raised previously it still defines the practice of law too broadly. The comment recommends that the Court limit the definition of the practice of law to coverAccordingly, in the current comment, the agencies recommend that the Court adopt language similar to that found in Rule 49 of the District of Columbia Court of Appeals, which limits the definition of the practice of law to the provision of legal advice or services where there is a client relationship of trust and reliance. While the revised proposed rule contains many exceptions and exclusions to allow non-lawyers to compete with lawyers in Hawaii, the comment states that “exceptions cannot capture every instance where consumers would benefit from lawyer/non-lawyer competition.”

The Commission vote authorizing the filing of the comment was 4-0. A copy of the comment can be found on the FTC’s Web site and as a link to this press release. (FTC File No. V080004; the staff contact is Gustav P. Chiarello, Office of Policy Planning, 202-326-2633.)

Copies of the Federal Register notice detailing the final rules are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(FYI 20.2009.wpd)