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The Federal Trade Commission has given final approval to a consent agreement with Felson Builders, Inc., Diamond Crossing Associates, L.P., Elmhurst Partners, L.P., and Joseph Felson, settling charges that they made unfair and deceptive advertising claims in violation of the Federal Trade Commission Act and violated the Truth in Lending Act (TILA) and its implementing regulation, Regulation Z, in home financing promotions. In addition, Diamond Crossing and Elmhurst Partners failed to provide consumers with written disclosures of credit costs and terms in violation of the TILA. According to the FTC complaint, respondents' advertisements were made in both Chinese and English language promotions. The Commission's action makes the consent order provisions binding on the respondents.

Under the final order, Joseph Felson and the three firms will be required to comply with the full disclosure requirements of Regulation Z in advertising credit terms. For example, any advertising regarding the amount or percentage of any downpayment (in credit sales), the repayment periods, or payment amounts will require clear and accurate disclosure of:

-- the amount or percentage of the downpayment (in credit sales);

-- the terms of repayment, including the amount of any balloon payment; and

-- the annual percentage rate, or APR.

If the annual percentage rate can be increased after consummation of the credit agreement, the settlement also requires disclosure of that fact. Finally, the respondents will be required to make full written disclosure of the true costs and terms of the financing prior to consummation of credit agreements, as required by the TILA and Regulation Z.

The consent agreement was announced for a public-comment period on Feb. 9. The Commission vote to issue it in final form occurred on May 15, and was 4-0, with Chairman Robert Pitofsky not participating.

NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions by the respon- dents. Each violation of such an order may result in a civil penalty of up to $10,000.

A news release summarizing the complaint and consent agree- ment was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release and of the complaint and final order are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(FTC File No. 932 3286)

(Docket No. C-3578)