Misrepresentation as to insurance coverage or rates, financing costs, etc. 197.2 Furnishing the purchaser with itemization of his costs in the installment sale of motor vehicles. Installment sales contract containing blank spaces to be filled in after its execution.

197.3

197.4

197.5

False, misleading, or deceptive use of rate charts in connection with the installment sale and financing of motor vehicles.

Requiring the placing of insurance by the seller or financing institution as a condition to the sale or financing of a motor vehicle.

AUTHORITY: The provisions of this Part 197 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45, unless otherwise noted.

SOURCE: The provisions of this Part 197 appear at 16 F.R. 1059, Feb. 6, 1951, unless otherwise noted.

§ 197.1 Misrepresentation as to insurance coverage or rates, financing costs, etc.

It is an unfair trade practice for any seller or financing institution, acting individually or in agreement, combination, conspiracy, or collusion with one another, to make any false, misleading, or deceptive statements or representations concerning insurance coverage or rates, plans respecting methods of filnancing, or financing costs or rates, in connection with the sale at retail of motor vehicles on installment or deferred payment contracts.

§ 197.2 Furnishing the purchaser with itemization of his costs in the installment sale of motor vehicles.

(a) In the installment sale of motor vehicles it is an unfair trade practice for the seller to fail, before the consummation of the sale, to furnish the buyer an itemization in writing signed by the seller separately disclosing to the purchaser the finance charge, insurance costs, and other charges which are paid or to be paid by the purchaser, such failure to separately disclose such items having the capacity and tendency or effect of deceiving the purchaser as to the nature of his costs in the transaction or rendering competition with respect to the cost of

financing and cost of the insurance involved ineffective from the standpoint of the purchaser.

(b) The seller shall be deemed to have fully complied with the requirements of this section when he has furnished the purchaser, before consummation of the sale, an itemization in writing which clearly discloses:

(1) The delivered price of the motor vehicle, including accessories or extras, if any; and

(2) The amounts to be credited as down payment and trade-in, if any; and

(3) The time balance owed by the buyer to seller, the amount of each installment payment to be made by the buyer, and the number of such installment payments, and the due dates thereof; and

(4) The cost of insurance, the coverage provided, and the party or parties to whom the insurance is payable; and (5) The finance charge; and

(6) Other charges making up the total consideration paid or to be paid by the purchaser, included in the time balance, the amounts and nature of each to be separately stated;

or when all said required information is clearly set forth in the installment sales contract, chattel mortgage, or other instrument evidencing the purchase transaction, and a true copy of such instrument is furnished to the purchaser before or at the time of the execution thereof.

Provided, however, That subparagraphs (1), (2), (3), (4), (5), and (6) of this paragraph need not be stated in the sequence or order above set forth, and that additional items may be included which serve to explain the calculations involved in determining the stated time balance to be paid by the purchaser: And provided further, That when all the said required information is clearly set forth in an installment sales contract, chattel mortgage, or other instrument evidencing the purchase transaction, and a true copy of such instrument is furnished to the purchaser before or at the time of his execution thereof, no additional itemization need be furnished to the purchaser.

(c) In connection with the installment sale of motor vehicles, it is an unfair trade practice for any financing institution to aid or abet a seller in effecting concealment or nondisclosure to the purchaser of the information required to be furnished to the purchaser

under the provisions of paragraph (a) of this section.

§ 197.3 Installment sales contract containing blank spaces to be filled in after its execution.

In the execution of an installment sales contract, it is an unfair trade practice for the seller to utilize the device of having the purchaser sign a contract or receipt in blank, to be filled in subsequently by the seller or financing institution with the purpose or effect of deceiving the purchaser.

NOTE: Nothing in this section shall be construed as prohibiting unfilled blanks for insertion of identifying serial numbers and identifying marks when knowledge concerning such numbers or marks is not available to the dealer at the time of the execution of the contract: Provided, That there is a clear and sufficient description of the motor vehicle which shall be fully adequate to identify it readily: And provided further, That such identifying numbers and identifying marks are subsequently inserted in the contract upon the delivery of the motor vehicle.

§ 197.4 False, misleading, or deceptive use of rate charts in connection with the installment sale and financing of motor vehicles.

It is an unfair trade practice for any seller or financing institution, either individually or in agreement, combination, conspiracy or collusion with each other, through the misuse of a rate or rate charts, or any other device or in any other manner, to make a false, misleading, or deceptive representation to the purchaser of a motor vehicle as to the finance charge required by a financing institution to finance the amount of the unpaid balance of the contract.

§ 197.5 Requiring the placing of insurance by the seller or financing institution as a condition to the sale or financing of a motor vehicle.

It is an unfair trade practice for any seller or financing institution, either individually or in agreement or collusion with each other, to condition the installment sale or financing of a motor vehicle on the purchase of an insurance policy from a particular insurance company when equivalent or better coverage by another insurance company is available and the purchaser desires to purchase the policy of such other company, where the effect of such conditioning may be to substantially lessen, stifle, or suppress competition. This section shall not prevent the exercise by the financing

AUTHORITY: The provisions of this Part 198 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45, unless otherwise noted.

SOURCE: The provisions of this Part 198 appear at 16 F.R. 2676, Mar. 27, 1951, unless otherwise noted.

§ 198.0 Definition; industry products.

As used in these rules the term "industry products' shall be understood as embracing all kinds and types of milk bottle caps, and hoods or closures, whether made of paper, paperboard, cellophane, aluminum, aluminum foil, tin plate, or other material, or any combination thereof.

It is an unfair trade practice for any concern, in the course of, or in connection with, the distribution of industry products, to represent, directly or indirectly, that it is a manufacturer of industry products, or that it owns or controls a factory making such products, when such is not the fact, or in any other manner to misrepresent the character, extent, or type of its business.

§ 198.3 Deceptive use of trade or corporate names, trade-marks, etc.

The use of any trade name, corporate name, trade-mark, or other trade designation which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the character, name, nature, or origin of any product of the industry, or any material used therein, or which is false or misleading in any other respect, is an unfair trade practice.

§ 198.5

Imitation of trade-marks, trade names, etc.

The imitation or simulation of the trade-marks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice. § 198.6 Unlawful coercion or combination in restraint of trade.

It is an unfair trade practice for a member of the industry:

(a) To use, directly or indirectly, any form of threat, intimidation, or coercion against any member of the industry or other person to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade; or

(b) To enter into or take part in, directly or indirectly, any agreement, understanding. combination, conspiracy, or concerted action with one or more members of the industry, or with one or more other persons, to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade.

§ 198.7 Defamation of competitors or false disparagement of their prod

ucts.

The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of competitors' products in any respect, or of their business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice.

§ 198.8

Substitution of products.

The practice of shipping or delivering industry products which do not conform to samples submitted, to specifications upon which the sale is consummated, or to representations made prior to securing the order, without the consent of the purchasers to such substitution, and with the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice.

§ 198.9 False invoicing.

It is an unfair trade practice to withhold from or insert in invoices any statements or information by reason of which omission or insertion a false record is made, wholly or in part of the transactions represented on the face of such invoice, with the capacity and tendency or

It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or permit or cause to be given, money or anything of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers, without the knowledge of their employers or principals, as an inducement to influence their employers or principals to purchase, or contract to purchase, products manufactured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors.

§ 198.12 Enticing away employees of competitors.

It is an unfair trade practice for any member of the industry wilfully to entice away employees of competitors with the intent and effect of thereby unduly hampering or injuring competitors in their business and destroying or substantially lessening competition: Provided, That nothing in this section shall be construed as prohibiting employees or agents from seeking or obtaining more favorable employment.

§ 198.13 Procurement of competitors' confidential information by unfair means and wrongful use thereof.

It is an unfair trade practice for any member of the industry to obtain information concerning the business of a competitor by bribery of an employee or agent of such competitor, by false or misleading statements or representations, by the impersonation of one in authority, or by any other unfair means, and to use the information so obtained

in such manner as to injure said competitor in his business or to suppress competition or unreasonably restrain trade. § 198.14 Unfair threats of infringement suits.

The circulation of threats of suit for infringement of patents or trade-marks among customers or prospective customers of competitors, not made in good faith but for the purpose or with the effect of thereby harassing or intimidating such customers or prospective customers, or of unduly hampering, injuring, or prejudicing competitors in their business, is an unfair trade practice. § 198.15 Unlawful interference.

It is an unfair trade practice for any member of the industry, by means of any monopolistic practices, or through combination, conspiracy, coercion, boycott, threats, or any other unlawful means, directly or indirectly, to interfere with a competitor's right to purchase his materials and supplies from whomsoever he chooses, or to sell to whomsoever he chooses.

§ 198.16 Selling below cost.

The practice of selling industry products at a price less than the cost thereof to the seller, with the purpose or intent, and where the effect may be, to injure, suppress, or stifle competition or tend to create a monopoly in the production or sale of such products, is an unfair trade practice. As used in this section, the term "cost" means the total cost to the seller, including the costs of acquisition, processing, preparation for marketing, sale, and delivery.

1 As used in this section, the word "commerce" means "trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the Jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States."

merce, to grant or allow, secretly or openly, directly or indirectly, any rebate, refund, discount, credit, or other form of price differential, where such rebate, refund, discount, credit, or other form of price differential, effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefits of such discrimination, or with customers of either of them: Provided, however,

(1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States;

(2) That nothing contained in this paragraph shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;

(3) That nothing contained in this paragraph shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade;

(4) That nothing contained in this paragraph shall prevent price changes from time to time where made in response to changing conditions affecting the market for or the marketability of the goods concerned, such as but not limited to obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Prohibited brokerage and commissions. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect con

trol, of any party to such transaction other than the person by whom such compensation is so granted or paid.

(c) Prohibited advertising or promotional allowances, etc. It is an unfair trade practice for any member of the industry engaged in commerce to pay or contract for the payment of advertising or promotional allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such member, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

(d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing. or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all competing purchasers on proportionally equal terms.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this section.

(f) Exemptions. The inhibitions of this section shall not apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit.

NOTE: In complaint proceedings charging discrimination in price or services or facilities furnished, and upon proof having been made of such discrimination, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged; and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing contained in this section shall pre