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1
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DECISION & ORDER
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EXTRACTED KEY WORDS
COMMISSION FEDERAL TRADE COMMISSION BANKRUPTCY COMPLAINT AGREEMENT ACT UNITED STATES DEPARTMENT STORES VIOLATIONS PROCEEDING DEBT CONSUMER REAFFIRMATION AGREEMENTS BANKRUPTCY COURT PRACTICES SUBSIDIARIES BANKRUPTCY PERSONNEL TERMINATE SUCCESSORS OBLIGATION APPEALING CHARGE CONSENT JURISDICTION PROVISIONS MATTER PRINCIPALS BUSINESS COMMERCE |
9823525
B260428
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
Commissioners:
Robert Pitofsky
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
In the Matter of
FEDERATED DEPARTMENT STORES, INC., a corporation.
DOCKET NO. C-3893
DECISION AND ORDER
The Federal Trade Commission having initiated an investigation of
certain acts and practices of the respondent named in the caption
hereof, and the respondent having been furnished thereafter with a
copy of a draft of complaint which the Seattle Regional Office
proposed to present to the Commission for its consideration and which,
if issued by the Commission, would charge respondent with violations
of the Federal Trade Commission Act; and
The respondent, its attorney, and counsel for the Commission having
thereafter executed an agreement containing a consent order, an
admission by the respondent of all the jurisdictional facts set forth
in the aforesaid draft of complaint, a statement that the signing of
said agreement is for settlement purposes only and does not constitute
an admission by respondent that the law has been violated as alleged
in such complaint, and waivers and other provisions as required by the
Commission's Rules; and
The Commission having thereafter considered the matter and having
determined that it had reason to believe that the respondent have
violated the said Act, and that complaint should issue stating its
charges in that respect, and having thereupon accepted the executed
consent agreement and placed such agreement on the public record for a
period of sixty (60) days, now in further conformity with the
procedure prescribed in Section 2.34 of its Rules, the Commission
hereby issues its complaint, makes the following jurisdictional
findings and enters the following order:
1. Respondent Federated Department Stores, Inc., is a Delaware
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2
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ANALYSIS
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EXTRACTED KEY WORDS
AGREEMENT CONSUMERS PROPOSED CONSENT ORDER DEBTS REAFFIRMATION AGREEMENTS COMMISSION COLLECTING COMPLIANCE DEPARTMENT STORES RESPONDENT PUBLIC RECORD CHARGES BANKRUPTCY COURTS UNITED STATES BANKRUPTCY LEGALLY BINDING BANKRUPTCY PROCEEDINGS COMPLAINT UNFAIR ACTS BANKRUPTCY PROTECTION FILING PETITION STATES BANKRUPTCY CODE LAW REDRESS MISREPRESENTING OBLIGATION ADEQUATE PRINCIPAL OBLIGATION |
Analysis of Proposed Consent Order
To Aid Public Comment
__________________________________________
The Federal Trade Commission has accepted an agreement to a proposed
consent order from Federated Department Stores, Inc. ("Federated").
Proposed respondent Federated conducts relevant business through,
among other affiliates or subsidiaries, FDS National Bank, The Bon,
Inc., Bloomingdales, Inc., Burdines, Inc., Rich's Department Stores,
Inc., Macy's East, Inc., Macy's West, Inc., and Stern's Department
Stores, Inc.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement and take other appropriate action or make
final the agreement's proposed order.
The Commission's complaint alleges several unfair or deceptive acts or
practices related to Federated's policy of inducing consumers who have
filed for bankruptcy protection to sign agreements reaffirming debts
owed to Federated prior to the filing of the bankruptcy petition. The
complaint charges that Federated: falsely represented to consumers
that signed reaffirmation agreements would be filed with the
bankruptcy courts, as required by the United States Bankruptcy Code;
falsely represented to consumers that debts associated with unfiled
reaffirmation agreements, or agreements that were filed but not
approved by the bankruptcy courts, were legally binding on the
consumers; and unfairly collected debts that it was not permitted by
law to collect.
The proposed consent order contains provisions designed to remedy the
violations charged and to prevent Federated from engaging in similar
acts in the future. The proposed consent order preserves the
Commission's right to seek consumer redress if the Commission
determines that redress to consumers provided through related legal
actions by state attorneys general and private parties is not
adequate.
Part I of the proposed order prohibits Federated from misrepresenting
to consumers who have filed petitions for bankruptcy protection under
the United States Bankruptcy Code that (A) reaffirmation agreements
will be filed in bankruptcy court; or (B) any reaffirmation agreement
is legally binding on the consumer. Part I.C of the proposed order
prohibits Federated from collecting any debt (including any interest,
fee, charge, or expense incidental to the principal obligation) that
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3
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AGREEMENT CONTAINING CONSENT
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EXTRACTED KEY WORDS
COMMISSION FEDERAL TRADE COMMISSION PROPOSED RESPONDENT AGREEMENT COMPLAINT BANKRUPTCY CONSUMERS PROCEEDING UNITED STATES DEPARTMENT STORES DRAFT COMPLAINT PURSUANT TRADE COMMISSION ACT REPRESENTATIVES OFFICERS ACCEPTANCE OBLIGATIONS DEBT REAFFIRMATION AGREEMENTS BANKRUPTCY COURT CONSENT ORDER COUNSEL SUBSIDIARIES FACTS VIOLATION PAYMENTS BANKRUPTCY PERSONNEL TERMINATE APPEALING |
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
In the Matter of
FEDERATED DEPARTMENT STORES, INC., a corporation.
FILE NO. 982-3525
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission has conducted an investigation of certain
acts and practices of Federated Department Stores, Inc. ("proposed
respondent"). Proposed respondent, having been represented by counsel,
is willing to enter into an agreement containing a consent order
resolving the allegations contained in the attached draft complaint.
Therefore,
IT IS HEREBY AGREED by Federated Department Stores, Inc., by its duly
authorized officers, and counsel for the Federal Trade Commission
that:
1. Proposed respondent Federated Department Stores, Inc., is a
Delaware corporation with its principal office or place of business at
7 West Seventh Street, Cincinnati, Ohio 45202. Proposed respondent
conducts relevant business through, among other affiliates or
subsidiaries, FDS National Bank, The Bon, Inc., Bloomingdales, Inc.,
Burdines, Inc., Rich's Department Stores, Inc., Macy's East, Inc.,
Macy's West, Inc., and Stern's Department Stores, Inc.
2. Proposed respondent admits all the jurisdictional facts set forth
in the draft complaint.
3. Proposed respondent waives:
a. Any further procedural steps;
b. The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law; and
c. All rights to seek judicial review or otherwise to challenge
or contest the validity of the order entered pursuant to this
agreement.
4. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission, it, together with the draft
complaint, will be placed on the public record for a period of sixty
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4
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COMPLAINT
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EXTRACTED KEY WORDS
DEBTS RESPONDENT CONSUMERS REAFFIRMATION AGREEMENTS FEDERAL TRADE COMMISSION DEBTOR ACT UNITED STATES CREDIT BANKRUPTCY CODE DISCHARGE PRE-PETITION DEBTS DEPARTMENT STORES BUSINESS BANKRUPTCY COURTS VIOLATES BANKRUPTCY PROCEEDINGS REPRESENTATION LEGALLY BINDING REASON ALLEGES PRACTICES COMPLAINT AFFECTING COMMERCE ENFORCE PURPOSE INJUNCTION OFFSET PROTECT |
9823525
B260428
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
In the Matter of
FEDERATED DEPARTMENT STORES, INC. , a corporation.
DOCKET NO. C-3893
COMPLAINT
The Federal Trade Commission, having reason to believe that Federated
Department Stores, Inc., a corporation ("respondent"), has violated
the provisions of the Federal Trade Commission Act, and it appearing
to the Commission that this proceeding is in the public interest,
alleges:
1. Respondent Federated Department Stores, Inc., is a Delaware
corporation with its principal office or place of business at 7 West
Seventh Street, Cincinnati, Ohio 45202. Respondent conducts relevant
business through, among other affiliates or subsidiaries, FDS National
Bank, The Bon, Inc., Bloomingdales, Inc., Burdines, Inc., Rich's
Department Stores, Inc., Macy's East, Inc., Macy's West, Inc., and
Stern's Department Stores, Inc.
2. Respondent, through one or more of its affiliates, is engaged in,
among other things, the consumer retail business. In the course and
conduct of its business, respondent has regularly extended credit
(hereinafter "consumer credit accounts") for the purpose of
facilitating consumers' purchase of respondent's products and
services.
3. The acts and practices of respondent alleged in this complaint have
been in or affecting commerce, as "commerce" is defined in Section 4
of the Federal Trade Commission Act.
THE UNITED STATES BANKRUPTCY CODE
4. Under the United States Bankruptcy Code (11 U.S.C. §§ 1-1330), a
debtor may be granted a discharge in a Chapter 7 bankruptcy proceeding
from debts that have arisen prior to the filing of the bankruptcy
petition (hereinafter referred to as "pre-petition debts"), meaning
that the debtor is no longer individually liable for these debts. The
granting of a discharge "operates as an injunction against the
commencement or continuation of an action, the employment of process,
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