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The Oregon Administrative Rules contain OARs filed through September 15, 2014
 
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DEPARTMENT OF JUSTICE

 

DIVISION 20

MISLEADING PRICE REPRESENTATIONS

137-020-0010

Trade Practices Act

(1) Purpose: It is the purpose of this rule to declare as an unlawful trade practice certain representations relating to price reductions.

(2) Scope: At present, it is unlawful under ORS 646.608(1)(j) to make "false or misleading representations of fact concerning the reasons for, existence of, or amounts of price reductions." This rule is intended to define types of price comparisons which are in violation of that section, by establishing permissible types of reference price advertising. The rule does not address misrepresentations regarding the "reasons for" price reductions. The Examples provided in this rule are for illustrative purposes only.

(3) Authority: This rule is adopted pursuant to ORS Chapter 183 on authority granted to the Attorney General by ORS 646.608(1)(s) and (4).

(4) Effective Date: This rule applies to all advertisements (other than catalogues) printed, distributed, or broadcast, or offers for sale made, after September 1, 1976. Subsection (6)(e) of this rule applies to all catalogues distributed in Oregon after January 1, 1977.

(5) Definitions: As used in this rule:

(a) The definitions of terms set forth in ORS 646.605(1975) are applicable;

(b) "Catalogue" means a multi-page solicitation in which a person offers more than one specific type of goods for sale from which a consumer can order goods directly without going to the seller's place of business, and which is distributed to consumers by means other than by inclusion in a newspaper;

(c) "Competitor" means a retail outlet in the person's geographic market area with whom the person in fact competes for sales;

(d) "Offering Price" means the price at which a person represents that goods will be sold or leased, whether stated as a definite sum of money or as a determinate reduction from a reference price;

(e) "Reference Price" means any price, whether stated in dollars, in terms of a percentage or faction, or by any other method, to which a person compares the currently represented offering price of its own goods. Examples of "reference prices" include manufacturer's suggested list or suggested retail prices; a competitor's offering price for the same or similar goods; a price at which the person formerly offered for sale or sold the same or similar goods; and an unspecified price at which the person formerly offered for sale or sold the same or similar goods suggested by the use of terms such as "on sale," "reduced to," "________% off," or the like;

(f) "Readily Ascertainable Reference Price" means a reference price which is capable of being determined, from a stated offering price, by means of a simple arithmetic computation;

(g) "Similar Goods" mean goods associated with a reference price which are similar in each significant aspect, including size, grade, quality, quantity, ingredients, utility and operating characteristics, to the offered goods.

(6) Unfair or Deceptive Use of Reference Prices: A person engages in conduct which unfair or deceptive in trade or commerce when it represents that goods are available for sale or lease by it at an offering price less than a reference price unless such reference price comes within any one of the following exceptions:

(a) The reference price is stated or readily ascertainable, and is a price at which the person, in the regular course of its business, made good faith sales of the same or similar goods or, if no sales were made, offered in good faith to make sales of the same or similar goods, either:

(A) Within the preceding 30 days; or

(B) At any other time in the past which is identified.

EXAMPLE: This exception is intended to identify the most common price comparison -- to a former price charged by the seller himself. The former price must be one which was used in good faith to make or offer to make sales. Good faith is absent if the person raises his price for the purpose of subsequently claiming reductions. Comparisons to "a" legitimate former price are allowed. Thus, if a chain store reduces its price in one or two outlets to meet localized competition, its price throughout the rest of the chain can be used as a reference price. Seasonal comparisons from year-to-year are also permitted.

(b) The reference price is the price at which the person will offer the same or similar goods for sale in the future, provided that:

(A) The reference price is stated or readily ascertainable; and

(B) If the reference price will not be put into effect for more than 90 days after the representation, the effective date of the reference price is stated; and

(C) Such reference price is actually put into effect for the purpose of offering in good faith to make sales.

EXAMPLE: This exception permits introductory offering prices and the like.

(c) The reference price is stated or readily ascertainable, and is a price at which an identified or identifiable competitor is or has in the recent regular course of its business offered to make good faith sales of the same or similar goods.

EXAMPLE: A person may rely upon the recent advertised price of a competitor for the same or similar goods, if he reasonably believes the competitor was attempting to make sales at that price. Alternatively, a person can "shop" his competitor to determine the latter's recent offering price.

(d) The reference price is stated or readily ascertainable, and is required by federal or Oregon law to be affixed to the goods, and clear disclosure is made in the same representation that all sales of such goods are not necessarily made at such reference price, if such is in fact the case.

EXAMPLE: This rule is directed at claimed price reductions from the "sticker prices" of automobiles. If a person makes such a price comparison and in fact similar automobiles are sold at less than the "sticker price," that fact must be disclosed clearly in the same representation.

(e) The reference price is stated in a catalogue, so long as the person employing such reference price includes a statement, printed in a manner which a reader of the catalogue is likely to notice, explaining:

(A) The source of the reference price; and

(B) That the reference prices may not continue to be in effect during the entire life of the catalogue, if such is in fact the case. The requirements of this section are satisfied by a single disclosure statement, which applies to the catalogue as a whole, made in conjunction with the explanation to the reader of how to make a purchase from the catalogue.

(f) The reference price is stated and is a price, such as a manufacturer's list price, which the person can document as having been employed in good faith offers to sell the same or similar goods within his market area during the preceding 30 days.

EXAMPLE: Comparing one's current offering price to a manufacturer's list price is valid if the offerer can substantiate that goods have been offered or sold, in good faith, at that list price during the preceding 30 days.

(g) Notwithstanding subsections (6)(a) through (f) of this rule, a person may represent a general price reduction on a variety of merchandise without using a stated or readily ascertainable reference price, so long as:

(A) The amount of reduction is stated expressly, either in terms of a dollar amount or a percentage;

(B) The reduction is from a price or prices at which the person made good faith sales of the same or similar goods at a time in the past which is identified; and

(C) The represented reduction is true as to each item offered for sale.

EXAMPLE: This would permit advertising seasonal clearance sales and the like by means of a general representation as to price reductions, without stating specifically either the reference price or the offering price.

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.608(1)(u)
Hist.: 1AG 16, f. 7-21-76, ef. 9-1-76

137-020-0015

Misleading Use of "Free" Offers and Rebates

(1) Definitions: As used in this rule:

(a) The definitions of terms set forth in ORS 646.605 and OAR 137-020-0020 are applicable;

(b) "Free" means without charge or cost, monetary or otherwise, to the recipient and includes terms of essentially identical import, such as "at no additional cost," "1¢ sale," "2 for the price of 1" and "give away" and, in the case of real estate, goods or services described in subsection (2)(a), an offer of any combination of real estate, goods or services at a single price. A free offer in conjunction with the sale or lease of real estate, goods or services is one that conveys to consumers the message that real estate, goods, services, gift certificates, gift cards, cash cards, or any other things of value, are offered at no cost in conjunction with the purchase of other real estate, goods or services for no more than their regular price;

OFFICIAL COMMENTARY: Offers may be subject to this rule even if they do not specifically use the word "free." Any time an advertisement or solicitation is made that gives anything of value away in conjunction with the sale or lease of real estate, goods or services, the person making the offer should carefully analyze the offer to ensure compliance with this rule.

Use of the term "included in the price" may be considered a "free" offer depending upon the terms and conditions of the offer, including, but not limited to, if the real estate, goods or services that are "included in the price" are usually and customarily included with the sale of similar real estate, goods or services. A merchant may not force a consumer to unknowingly purchase other goods and services simply by listing them as "included in the price." Conversely, it is not unlawful to sell a product with an accessory included in the price, particularly if the price of the accessory is individually disclosed and a consumer knows (s)he is paying an additional amount for the accessory.There is no bright line on this issue and each offer will be evaluated in its entirety to determine if the combination of real estate, goods or services is a legitimate "free" offer. All factors will be taken into consideration, including, but not limited to, whether the consumer could purchase a similar product without the additional purchase of other goods and services or if the free item is of de minimis value, such as batteries in a toy or flashlight.

(c) "Real estate, goods or services" has the meaning given that term in ORS 646.605(6). For the purpose of this rule, it does not include loans made by a financial institution or the opening of an account that is subject to the federal Truth in Savings Act of 1991, 12 U.S.C. 4301 et seq., and implementing regulations issued by the Federal Reserve Board or the National Credit Union Administration, including, but not limited to, a savings or checking account, money market account, share certificate or certificate of deposit;

(d) "Rebate" means the return of any part of a payment made by a consumer in conjunction with the sale or lease of real estate, goods or services and includes, but is not limited to, an offer of a future cash refund, a direct or indirect payment of money to a consumer or a voucher for a future payment;

(e) "Regular Price" means the price, in the same quantity, quality and with the same service, at which the seller or advertiser of the product or service has openly and actively sold or leased the product or service in Oregon in the most recent and regular course of business, for a reasonably substantial period of time, i.e. a 30-day period, prior to the offer. For consumer products or services which fluctuate in price, if the price change was due to changes in the cost of the goods or services by the supplier or the price change is due to price reductions inherent in the pricing of seasonal or perishable goods, the "regular price" shall be the lowest price at which substantial sales were made during a reasonably substantial period of time. Except in the case of introductory offers, if no substantial sales were made, in fact, at the "regular price," the price will be presumed to be arrived at through bargaining with potential purchasers; and

(f) "Verifiable retail value" means:

(A) A price at which an offeror can demonstrate that a substantial number of free items have been sold at retail in Oregon by a person other than the offeror; or

(B) If substantiation described in this section is not available to an offeror, no more than one and one-half times the amount an offeror paid for a free item.

OFFICIAL COMMENTARY: If substantiation of verifiable retail value, as required by paragraph (2)(b)(C), is not available, and the offeror pays $10 for a free item, the verifiable retail value of that free item would be $15.

(2) Unfair or Deceptive Use of "Free" Offers: A person engages in conduct which is unfair or deceptive in trade or commerce:

(a) When the person makes a free offer in conjunction with the purchase or lease of real estate, goods or services:

(A) The price, size, quantity, or quality of which is normally arrived at through bargaining with potential purchasers, unless the "free" item is offered by a manufacturer or another party that is not the seller and there is no direct cost to the seller;

(B) When the item to be purchased or leased can be purchased or leased for a lesser price without the "free" item;

(C) At a price that is higher than the "regular price;"

(D) That is deceptive or misleading; or

(E) During a home solicitation as defined by ORS 83.710(1), unless:

(i) Exempted by ORS 83.710(2);

(ii) The goods or services are sold or leased by a person or entity that has a franchise to operate and sell or lease its goods or services by a unit of local government and pays franchise fees;

(iii) The rates or prices of the goods or services are regulated by local, state or federal government; or

(iv) The merchant making the home solicitation maintains a regular place of business where goods or services are sold or leased at a regular price and the goods or services for sale or lease during the home solicitation are being sold at their regular price or less.

OFFICIAL COMMENTARY: No advertisement or promotion for real estate, goods or services shall offer any free item in conjunction with the purchase or lease of real estate, goods or services, the price, size, quantity, or quality of which is normally determined by that seller or offeror by bargaining with potential consumers. It is the express intent of this section to prohibit the practice of advertising or offering something as "free," when in fact, the cost of the "free" item can be passed on to the consumer, in whole or in part, by raising the price of the real estate, goods or services that must be purchased in conjunction with the "free" offer or by decreasing the quality or quantity of merchandise that must be purchased in conjunction with the "free" offer. Such "free" offers are illusory.

Examples of violations of this section include, but are not limited to:

(I). A vinyl siding company offering "free" installation with the purchase of any home siding project;

(II) A construction company offering one "free" window with every other two windows purchased;

(III) A manufactured home dealer offering a "free" vacation with the purchase of a manufactured home;

(IV) A motor vehicle dealer offering a "free" car with the purchase of another car;

(V) An offer of a "free" television with the purchase of a vacuum cleaner sold during a home solicitation;

(VI) A men's clothing store offering a "free" tie with the purchase of a shirt priced at $50.00 that has a regular price of $35.00; or

(VII) A bridal dress store, selling its dresses at a convention center wedding show, marks up all of its dresses at the show by 10% over the regular price at which they are sold at the store and offers "free" flowers for the wedding of anyone who purchases a dress at the show.

(b) When the person makes a free offer and in order to qualify for the offer, the recipient will be given a presentation intended to result in the promotion of a business or sale or lease of real estate, goods or services unless the offer contains a clear and conspicuous disclosure:

(A) Identifying the business promoted and the goods or services offered for sale or lease;

(B) That the recipient must listen to a sales or promotional presentation in order to receive the free offer or that the recipient is entitled to receive the free offer after refusing to listen to the presentation, whichever is the case. If the free item described is not immediately available for delivery to the recipient after the recipient has listened to a sales or promotional presentation, the recipient shall be given the verifiable retail value of the free item in cash or by a valid check;

(C) Describing each potentially free item and its verifiable retail value;

(D) That includes, if the free item is one or more of a larger group and is received on a random basis, (in addition to compliance with subsection (2)(d)) a description of the actual odds of receiving each item based on the initial odds and revised to reflect actual current odds at the beginning of each month of use of the free promotion; if not on a random basis, a description of the method of selection used. The description of the initial odds and the current odds shall include a statement of the total number of each free item to be given away by the offeror and the total number of chances to obtain the free item being distributed by the offeror. If the promotion utilizing the free item involves distribution by more than one offeror or sponsor, the description of the initial odds and the actual current odds must also include a statement of the total number of each free item to be given away by all offerors or sponsors and the total number of chances to obtain the free item being distributed by all offerors or sponsors. The odds and verifiable retail value shall be printed in the same size type as the principal description of each free item and shall appear immediately adjacent to said description; and

(E) In a telephone or door-to-door solicitation, that includes the information required by ORS 646.608(1)(n) within 30 seconds after beginning the conversation.

(c) When the person makes a free offer in conjunction with the purchase or lease of real estate, goods or services and, in order to receive the "free" offer, the recipient is required to pay money, in addition to the cost of the real estate, goods or services purchased or leased, to the offeror, promoter or any other person in order to accept or use the "free" offer, including, but not limited to, postage, shipping, storage, handling, processing, registration or verification;

OFFICIAL COMMENTARY: An offer is not "free" if the recipient must pay a fee, over and above the actual cost of the real estate, goods or services, in order to receive the "free" offer. Examples of violations of this section include, but are not limited to:

(A) Offering "free" computer software on the internet that requires the recipient to pay a postage and handling fee in order to receive the "free" software; or

(B) Offering a "free" vacation with the sale of a living room furniture set that requires the recipient to pay a registration fee with the vacation company in order to reserve the future use of the "free" vacation.

(d) In the case of all free goods or services offered on a random basis as described in paragraph (2)(b)(D), unless it retains for at least one year a list of the names and addresses of all persons receiving free goods or services with a verifiable retail value of $10 or more; and

(e) When a person makes a free offer in conjunction with the purchase or lease of real estate, goods or services, which is subject to any terms, conditions or limitations in order to accept or use the "free" offer, and the person fails:

(A) To clearly and conspicuously display in an advertisement of the "free" offer all material terms, conditions, and limitations of accepting the "free" offer;

(B) To clearly and conspicuously disclose to the consumer all terms, conditions, and limitations of accepting the "free" offer prior to consummating any transaction; and

(C) To afford the consumer a meaningful opportunity to reject the offer.

OFFICIAL COMMENTARY: All material terms, conditions and limitations of a "free" offer must be set forth clearly and conspicuously in any advertisement in close proximity to the "free" offer. Disclosure of the terms of the offer, referenced by an asterisk and placed in a footnote at the bottom of the offer is not clear and conspicuous. Likewise, if the offer is on the internet, reference to the material terms, conditions and limitations of the offer by use of a hyperlink or only disclosing them during the checkout process is not clear and conspicuous. The definition of "clear and conspicuous" set forth in OAR 137-020-0020 has been incorporated by this rule and should be reviewed before advertising any "free" offer to ensure compliance. The complete offer, including all terms, conditions and limitations, must be fully explained to the consumer before the transaction is consummated and the consumer must be given a meaningful opportunity to reject the offer before committing to the transaction. Examples of violations of this section include, but are not limited to:

(i) A consumer shopping for an engagement ring is told he would receive a fully paid "free" vacation for two to Mexico with the purchase of a diamond ring that costs over $10,000.00. No other information is given the consumer. The consumer and his new bride are, in fact, flown to the destination for free. However, the new bride and groom are booked into a dirty, unsafe and uncomfortable hotel with poor food. Once there, the new couple is told that if they check out they will not be able to use their return tickets. The consumer is given the choice of staying in the miserable accommodations or paying an exorbitant "upgrade" fee to get into a reasonable hotel;

(ii) An electronics store advertises a "free" 3-day Caribbean Cruise for two with the purchase of a complete home entertainment center package. The advertisement fails to clearly and conspicuously disclose that the consumer must purchase his/her own airfare through the cruise company, that there are many blackout dates when the cruise is not available and that the price of a cruise with additional days is at a cost that is 50% more than the price of a comparable cruise.

(iii) A computer software company, through television advertisements, offers two "free" compact discs of educational software. The advertisements do not disclose that the consumer must actually accept delivery of three CDs in order to get the "free" offer. If, within 15 days, the consumer does not mail back the third CD that is not "free," the consumer is billed $79.95, the total regular cost of three CDs. All three examples may be violations of paragraph (2)(a)(D) because they are deceptive and misleading.

(3) Unfair or Deceptive Use of "Rebate" Offers: A person engages in conduct which is unfair or deceptive in trade or commerce when the person makes a rebate offer in conjunction with the purchase or lease of real estate, goods or services:

(a) By offering rebates that are deceptive or misleading;

(b) The price, size, quantity, or quality of which is normally arrived at through bargaining with potential purchasers, unless the rebate is offered by a manufacturer or another party that is not also the seller, independent of the seller and without the seller's participation; or

(c) When the advertisement or solicitation of the rebate fails to clearly and conspicuously display in close proximity to the rebate offer all material terms, conditions, limitations and costs of receiving the rebate.

OFFICIAL COMMENTARY: Examples of misleading or deceptive rebate offers include, but are not limited to:

(A) A motor vehicle dealer or construction company purchases cash vouchers from a third party and advertises that the voucher reduces the cost of real estate, goods or services. Strict criteria of the marketer for filing and later claiming the rebate are so onerous that it is almost impossible for the average consumer to receive anything. In addition, the amount of money retained in trust by the marketer for claims is only a small fraction of the total amount of the vouchers issued.

(B) Advertising these vouchers as rebates is misleading and deceptive because:

(i) Consumers are led to believe they are actually going to get a rebate on the cost of their purchase; and

(ii) The promotion is intentionally designed to make the consumers fail in either the initial submission of the voucher application or the claim process, which in some cases may not occur for four to five years from the initial transaction. Further, it is very possible that there will be insufficient funds to pay the entire amount of the "rebate" claims years later when the vouchers mature.In this particular example, offering such a voucher would also be an unlawful "free" offer pursuant to paragraph (2)(a)(A) because both motor vehicle sales and construction contracts are negotiable price transactions.

(C) A retail store advertises rebates for home computer systems and fails to clearly and conspicuously disclose the material terms, conditions and limitations of the rebate in close proximity to the rebate offer. Examples of such material terms, conditions and limitations include, but are not limited to:

(i) Rebates must be submitted within 7 days of purchase;

(ii) To qualify for a rebate, the consumer must subscribe for a two year internet subscription with XYZ Corp;

(iii)The rebate will not be for cash, but only merchandise from the manufacturer;

(iv) In order to qualify for the rebate, the consumer must purchase a printer at the same time (s)he buys the computer;

(v) The consumer must finance the computer system with ABC Finance Company to be eligible for the rebate;

(vi) To receive the entire rebate, the consumer must submit four different rebate forms to four different companies (in this example, the advertisement must clearly and conspicuously contain the terms for all four rebates to not be misleading or deceptive);

(vii) The rebate is limited to only one per address or household; or

(viii) The disclosure of material terms of the rebate are not in close proximity to the advertised rebate offer in the newspaper, but placed at the bottom of the page and referenced by an asterisk.

Stat. Auth.: ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u)
Hist.: 1AG 16, f. 7-21-76, ef. 9-1-76; 1AG 2-1979, f. 6-22-79, ef. 8-1-79; JD 1-1987, f. 2-5-87, ef. 2-15-87; JD 5-1990, f. 7-5-90, cert. ef. 9-1-90; DOJ 14-2007, f. 12-20-07, cert. ef. 1-2-08

137-020-0020

Motor Vehicle Price and Sales Disclosure

(1) Purpose: The purpose of this rule is to declare as unfair or deceptive in trade or commerce certain motor vehicle pricing and sales practices. Nothing in this rule, or the administrative rules to which it applies, modifies or diminishes the applicability of exemptions or limitations on enforcement of the Oregon Unlawful Trade Practices Act, including, but not limited to, those specified in ORS 646.605 and 646.612.

(2) Definitions: For purposes of this rule, the following definitions shall apply:

(a) "Advertisement," including the terms "advertise" and "advertising," means any oral, written, pictorial or graphic notice given in a manner designed to attract public attention and includes, but is not limited to, public broadcasts, mailings, publications, internet sites, other internet applications, email, facsimiles and published notices. It includes, but is not limited to, any statement or representation made in a newspaper, magazine, or other publication; or made on radio, television or internet; or appearing in any notice, handbill, sign, billboard, banner, poster, display, circular, pamphlet, letter, or other printed material; or contained in any window sticker or price tag;

(b) "Advertiser" means the person on whose behalf any advertising material is published and includes the advertising agent (if any) used by the advertiser;

(c) "Advertising agent" means any person who produces, promotes or assists in the sale, production, or placement of any advertisement or participates in a sales event directly or through its employees or agents, on behalf of any person;

(d) An "average" person, viewer or listener means a person other than one allied with or employed by the motor vehicle industry;

(e) "Broker" means a motor vehicle broker as defined by ORS 822.047;

(f) "Buy-down rate" means a financing rate which, due to a dealer's payment of finance charges to a third party, is below the prevailing market financing rate;

(g) "Buy-rate" means the lowest interest rate quoted to a dealer or broker by a financial organization for which a consumer qualifies, based upon the consumer's credit history;

(h) "Capitalized cost" means the amount the offeror places on a vehicle as the vehicle's value for the purpose of offering the vehicle for lease to the public, not including any capitalized cost reductions or taxes, title, license fees, lease acquisition, Department of Environmental Quality fees, Dealer Title and Registration Document Preparation Service Fee, insurance premiums, warranty charges, and any other product, service, or amount amortized in the lease. The capitalized cost for the purpose of this definition is the equivalent of the "offering price" for the purchase of a motor vehicle in a sales transaction;

(i) "Capitalized cost reduction" means the total amount of any rebate, cash payment, net trade-in allowance or non-cash credit that reduces the capitalized cost;

(j) "Clear and conspicuous," including the terms "clearly" and "conspicuously," means that a message, statement, information, representation or term is conveyed in a manner that is readily noticeable, will be easily understood by the audience to whom it is directed, and is in a meaningful sequence. In order for a message to be considered "clear and conspicuous," it shall, at a minimum:

(A) Not contradict or substantially alter any terms it purports to clarify, to explain or to which it otherwise relates;

(B) Be in close proximity to the message, statement, information, representation or term it clarifies, modifies or explains, or to which it otherwise relates;

(C) Use abbreviations or terms only if they are commonly understood by the average person or approved by federal or state law;

OFFICIAL COMMENTARY: Each advertisement shall be evaluated for its overall impression. The public should not have to weigh each word, hunt for the hidden meaning of each statement, or search for inconspicuous disclaimers. Advertisements which place material disclosures in small print, inconspicuously buried at the bottom of the advertisement, are not clear and conspicuous. If, on the other hand, the information does not materially change, limit or alter the offer being made, it can be placed at the bottom of an advertisement.

(D) In the case of radio advertising:

(i) Include the information required to be disclosed by law and all disclaimers, conditions and limitations shall be spoken with sufficient deliberateness, clarity, speed and volume so as to be audible and understandable by the average radio listener;

(ii) Not be obscured by sounds which interfere with or distract from the disclosure; and

(iii) Provide all necessary information regarding leases. Any information required in radio advertising by the Federal Consumer Leasing Act and Oregon law and administrative rules shall be deemed to be clear and conspicuous if the advertisement complies with 15 USC sec. 1667c(c) and also discloses the capitalized cost of the lease.

OFFICIAL COMMENTARY: 15 USC sec. 1667c(c) allows certain required lease disclosures to be given to a consumer in a radio advertisement by referring the audience to either a toll free telephone number or a written advertisement that appears in a publication in general circulation in the community served by the radio station on which such advertisement is broadcast. All lease advertisements on radio must include the following disclosures to comply with Oregon and Federal law:

(I) That the transaction advertised is a lease;

(II) The total amount of any initial payments required on or before consummation of the lease or delivery of the property, whichever is later;

(III) The number, amounts, due dates or periods of scheduled payments, and the total of such payments under the lease; and

(IV) The capitalized cost (Oregon requirement).

Before advertising a motor vehicle lease on the radio, an advertiser should review 15 USC ¦ 1667c in its entirety to ensure compliance with Oregon and Federal law. The toll free telephone number or written advertisement must include all other disclosures required by both OAR 137-020-0050 and 15 USC ¦ 1667c.

(E) In the case of television advertising:

(i) Include the information required to be disclosed by law and shall be completely disclosed audibly, visually, or using a combination thereof;

(ii) If a visual message, be presented unobscured by other images and in a size and time sufficient to allow an average viewer to read with reasonable ease;

(iii) If an audible message, be presented with sufficient deliberateness, clarity, and volume so as to be understood by the average television listener unobscured by other sounds which interfere with or distract from the disclosure;

(iv) Have as a minimum height for required superimposed written copy ("super") in a television advertisement or advertisements in any other audio-visual medium:

(I) For Standard Definition Television - no less than 22 video scanlines for capital and lower case letters together, or no less than 18 video scanlines for use of capital letters only;

(II) For High Definition Television - no less than double the scanlines required for Standard Definition Television; and

(III) The supers must appear on the screen for a duration sufficient to allow a viewer to have a reasonable opportunity to read and understand the statement, representation or term.

(v) Be sufficient if the super on-screen display time is no less than three seconds for the first line of text and one second for each additional line. This is a rebuttable presumption.

(F) In the case of printed advertising:

(i) Include the information required to be disclosed by law and shall be in close proximity to the terms it purports to clarify, to explain or to which it otherwise relates; and

(ii) Be of sufficient prominence in terms of print style, size and contrast as compared with the remainder of the advertisement so as to be readily noticeable to an average person in the audience to whom it is directed. Print size which is 8 point type or larger in display advertisements which are less than 200 square inches in size or print size which is 10 point type or larger in display advertisements which are larger than 200 square inches in size shall be rebuttably presumed to be of sufficient size to be readily noticeable.

(G) In the case of internet advertising:

(i) Include the information required to be disclosed by law near, and when technologically possible, on the same screen as the triggering claim;

(ii) Use text or visual cues to direct consumers to scroll down a Web page when it is necessary to view information;

(iii) When using hyperlinks to lead to information required to be disclosed by law:

(I) Ensure that hyperlinks are obvious;

(II) Ensure that hyperlinks appropriately convey the importance, nature and relevance of the information they lead to;

(III) Include consistent hyperlink styles and format;

(IV) Ensure that all hyperlinks are placed in close proximity to relevant information; and

(V) Ensure that hyperlinks take consumers directly to the information on the click-through page.

(iv) Be displayed prominently prior to purchase;

(v) Be prominently displayed so the information is noticeable to consumers in relation to the size, color and graphic treatment of other parts of the Web page;

(vi) Repeat information on lengthy Web sites when there are multiple or repeated claims;

(vii) Include audio disclosures when audio claims are made on the Web site and the audio disclosures must be presented in a volume and speed so that consumers can hear and understand them;

(viii) Include visual disclosures that are displayed for a duration sufficient for consumers to notice, read and understand them; and

(ix) Use clear language and syntax in such a manner that an ordinary consumer can understand the information required to be disclosed by law.

OFFICIAL COMMENTARY: For more clarification and explanation regarding internet advertising go to the Federal Trade Commission website titled "Dot Com Disclosures" at http://www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/.

(k) "Dealer" means a person who buys, sells, trades or exchanges, leases, displays or offers to buy, sell, trade or exchange motor vehicles either outright or by means of any conditional sale, bailment, lease, security interest, consignment or otherwise or who is a broker. "Dealer" does not include any person excluded by ORS 822.015;

(L) "Dealer Title and Registration Document Preparation Service Fee" means any monies or other thing of value, in an amount which is authorized by the Oregon Driver and Motor Vehicle Services Division of the Oregon Department of Transportation (DMV), which a dealer charges for preparing or processing title and registration documents and collecting DMV fees on behalf of a consumer;

OFFICIAL COMMENTARY: Oregon law and administrative rules permit dealers to act as DMV agents and dealers may elect to prepare, submit, or prepare and submit documents necessary to issue or transfer a certificate of title for a vehicle, register a vehicle or transfer registration of a vehicle, or issue a registration plate. For providing this service, dealers may charge a purchaser of a vehicle a fee for the preparation of those documents, not to exceed the amount established by DMV. See OAR 735-150-0050. Further, this fee is always negotiable; otherwise it could be classified as a tax. While a dealer has a right to prepare the DMV documents and charge the fee, the consumer may choose not to do business with a dealer who refuses to sell a vehicle without charging a Dealer Title and Registration Document Preparation Service Fee. Of course, the dealer can process the documents without charging a fee. In addition to the Dealer Title and Registration Document Preparation Service Fee, dealers may offer consumers the option of electronically filing their title and registration documents using an integrator. Dealers may charge consumers an additional fee for this service, subject to any limitations established by DMV. Consumers must knowingly agree to pay the additional fee for this electronic filing service. If a consumer does not agree to pay the additional fee for the electronic filing service, a dealer may still electronically submit title and registration documents at no additional cost to the consumer.

(m) "Extension sticker" means a label (other than a Monroney sticker or other label bearing the manufacturer's suggested retail price), affixed to a new motor vehicle, displaying the offering price of the motor vehicle;

(n) "False advertisement" means any advertisement which is false, misleading or deceptive in a material respect. In determining whether any advertisement is false, misleading or deceptive, not only representations made or suggested by statement, word, design, device, sound or any combination thereof will be taken into account, but also the extent to which the advertisement fails to reveal facts material in light of representations made;

(o) "Financial Organization" means any person who finances a sale or lease of a motor vehicle;

(p) "Manufacturer" means any entity which:

(i) Manufactures or assembles new motor vehicles for sale or distribution;

(ii) Distributes new motor vehicles through franchised dealerships;

(iii) Is engaged in the business of importing new motor vehicles for sale or distribution to dealers, through distributors, or to factory branches; or

(iv) Is a subsidiary of a manufacturer including one that offers motor vehicle financing.

(q) "Manufacturer's Suggested Retail Price" or "MSRP" means the Monroney price, or if there is no Monroney sticker, then the total price of the vehicle after all factory installed options and factory costs have been added together, less any option package savings offered by the manufacturer;

(r) "Monroney sticker" means the label required by the Automobile Information Disclosure Act, 15 USC ¦ 1232;

(s) "Motor Vehicle" means any self-propelled vehicle normally obtained for personal, family, or household purposes, including all terrain vehicles, snowmobiles, self-propelled motor homes, personal watercraft, boats and, for the purposes of this definition, any motor home, recreational vehicle or trailer pulled by a self-propelled vehicle. Motor vehicle does not include aircraft;

(t) "Negative equity" means the amount by which an existing lien on a trade-in vehicle exceeds the true market value of the trade-in vehicle;

OFFICIAL COMMENTARY: In layman's terms, if a consumer has negative equity on his/her vehicle, it means the consumer owes more on the vehicle than it is actually worth. While the "true market value" of a vehicle may vary, it can be determined by using Kelly Blue Book or NADA Book values and the average sale price of the vehicle at regional vehicle auctions. While these publications are relevant, they are not determinative. Depending upon the supply and demand for a given vehicle, it could be worth more or less than its "book" value.

(u) "Negative equity adjustment" means an equal amount which is added to both the purchase or lease price of a vehicle and the trade-in allowance for the trade-in vehicle in a transaction;

OFFICIAL COMMENTARY: Negative equity adjustments have become a common business practice in motor vehicle transactions. The practice is used when a consumer has negative equity in a trade-in and often is unable to qualify for financing without making a down payment. There are a number of possible reasons a dealer or broker may want to inflate the trade-in value on a vehicle with negative equity:

(A) to make the consumer think (s)he is receiving more for his/her trade-in than it is actually worth;

(B) to make it appear to a financial organization that the consumer is more creditworthy than is true; or

(C) to create a down payment from trade-in equity when none exists. While a dealer is free to determine the actual cash value (ACV) on a vehicle taken as a trade-in, if the ACV exceeds the true market value, it could be an indication that the dealer has engaged in a negative equity adjustment and be a reason for further scrutiny of the transaction.

(v) "Offering price" means the full cash price for which a dealer will sell or lease a motor vehicle to every consumer or member of the general public without exception, excluding only taxes, license and registration costs, Department of Environmental Quality (DEQ) fees and a Dealer Title and Registration Document Preparation Service fee;

OFFICIAL COMMENTARY: Examples of correctly calculated offering prices are as follows:

(A) A car's MSRP is $10,000, license and registration are $100, undercoat is $100, dealer-added options are $2,000 and the Dealer Title and Registration Document Preparation Service fee is $50. A financial organization offers a $1,000 rebate to qualified consumers. The offering price of the vehicle is $12,100. The offering price cannot include the $50 service fee or the $1,000 rebate that is not available to all consumers without exception.

(B) A motorcycle's MSRP is $5,000, license and registration are $50, delivery, assembly and setup costs the dealer $250, custom accessories are $500 and the Dealer Title and Registration Document Preparation Service fee is $50. The offering price of the vehicle is $5,750. The costs of delivery, assembly, setup and all accessories must be included in the offering price in any advertisement or quoted offering price given during the sales negotiation of the motorcycle and cannot be added in as fees or extras after the selling price of the motorcycle is agreed upon between the dealer and consumer. The advertised offering price does not need to include the license and registration or Dealer Title and Registration Document Preparation Service fee. While the dealer may now choose to prepare title and registration documents and may charge a fee for this service, nothing in this or any other rule requires a dealer to charge any Title and Registration Preparation Service fee. Whether the consumer will pay any fee for this service and, if so, its amount, up to the maximum allowed by law, is always negotiable between the consumer and the dealer.

(w) "Person" means natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity except bodies or officers acting under statutory authority of this state or the United States and includes, but is not limited to, dealers, brokers, manufacturers, publishers, advertisers or advertising agents;

(x) "Personal Watercraft" means a jet ski or other aquatic device of similar design;

(y) "Publish" means to disseminate, mail, or otherwise make available to the public at large, or any section of the public, in whatever form and by whatever means any information;

(z) "Publisher" means any person who publishes any advertisement;

(aa) "Rebate" means:

(i) The payment of money to a consumer or payment to a person on behalf of a consumer on the condition that the consumer purchase or lease a motor vehicle; or

(ii) The return of any part of a payment made by a consumer in conjunction with the sale or lease of real estate, goods or services and includes, but is not limited to, an offer of a future cash refund, a direct or indirect payment of money to a consumer or a voucher for future payments.

(bb) "Recreational vehicle" has the meaning given that term in ORS 650.300;

(cc) "Sale," "Sell" or "Buy" means any transaction for the sale, purchase, trade, exchange or lease of a motor vehicle;

(dd) "Spot Delivery" or "Spot Delivered" means that a consumer has taken possession of a motor vehicle from a dealer or broker and the consumer has committed to buy or lease the vehicle, whether or not there is a finalized transaction or final approval of financing;

OFFICIAL COMMENTARY: Spot delivery occurs when a consumer signs a purchase order, installment sales contract or lease agreement for a motor vehicle and the consumer takes possession of the vehicle "on the spot," prior to the consumer being approved by a financial organization to pay for the transaction.

(ee) "Taxes, license and registration costs" means those usual taxes, charges and fees payable to or collected on behalf of governmental agencies and necessary for the transfer of any interest in a motor vehicle or for the use of a motor vehicle;

(ff) "Used vehicle" means any vehicle which has been previously:

(i) Delivered to any person for his/her discretionary use for personal or business purposes and for more than a test drive before a contemplated purchase or preparation for sale;

(ii) Titled or registered to any person, whether or not it was used for the person's own discretionary personal or business purposes; or

(iii) Spot delivered.

OFFICIAL COMMENTARY: Vehicles that would be considered "used" include, but are not limited to:

(a) New vehicles that are delivered to a consumer on a purchase order, lease agreement or retail installment contract or spot delivered, then subsequently returned to the dealer for any reason, including, but not limited to, the inability to obtain financing;

(b) Demonstrators and company cars that have never been sold to a retail customer, but have been driven for purposes other than test drives or moving, including use by the dealer, the dealer's employees, the dealer's corporate officers or anyone else; and

(c) All vehicles that have been driven more than the limited use necessary in moving or test driving a new vehicle prior to purchase or delivery to a consumer. The intent of this definition is to conform the applicability of the rule to the maximum extent permitted by ORS 646.608 and Weigel v. Ron Tonkin Chevrolet Co., 298 Or 127, 690 P2d 488 (1984).

(gg) "Vehicle identification number" or "VIN" means a number, a letter, a character, a datum, a derivative, or a combination thereof, used by the manufacturer or a Department of Motor Vehicles for the purpose of uniquely identifying a motor vehicle. For the purpose of this definition, any time a motor vehicle advertisement requires the publication of a "vehicle identification number," use of the last six numbers, letters or other characters will constitute compliance with the rule;

OFFICIAL COMMENTARY: Requiring the use of only the actual vehicle identification number or its last six numbers or characters in all advertising ensures positive identification of all advertised vehicles. Some deceptive advertisements have used fictitious stock numbers to advertise vehicles that did not exist. The implementation of this change will allow any consumer to identify a specific advertised vehicle at a dealership simply by looking in the vehicle's front window.

(hh) "Wholesale" means the sale of motor vehicles, goods or services for resale by a dealer, broker or other person, as opposed to the sale of motor vehicles, goods or services to the ultimate consumer;

(ii) "Yield Spread Premium" means the difference between a higher interest rate quoted to a consumer by a dealer or broker and the buy rate offered to the dealer or broker by a financial organization.

(3) Violations: Failure by a person, in the course of the person's business, vocation or occupation, to comply with this rule constitutes unfair or deceptive conduct in trade or commerce.

(a) Mandatory Posting of Offering Price - Any motor vehicle offered for sale or lease in an advertisement that states an offering price or capitalized cost for the motor vehicle shall have affixed to it a clear and conspicuous label or extension sticker that states the advertised offering price of the motor vehicle listed in the advertisement. If a motor vehicle bears a label which states a MSRP and the MSRP is the offering price or capitalized cost for the vehicle, no additional label or extension sticker is required;

OFFICIAL COMMENTARY: This rule requires every dealer who advertises an offering price for a motor vehicle in any media to post the advertised offering price on the vehicle in a clear and conspicuous manner.

(b) Extension Sticker -- Any motor vehicle offered for sale bearing a Monroney sticker or a label stating a MSRP shall have an extension sticker affixed stating the offering price of the vehicle if the offering price is greater than the Monroney sticker price or the stated MSRP;

(c) Offering Price -- Any price stated in an advertisement or in a written or oral price quotation given to a consumer shall be the offering price, excluding only taxes, license, registration costs, DEQ fees and a Dealer Title and Registration Document Preparation Service fee;

OFFICIAL COMMENTARY: The purpose of this rule is to ensure that dealers do not add in hidden or undisclosed costs after the price for a vehicle has been advertised or negotiated with a consumer. Examples of potential violations are as follows:

(A) A vehicle is advertised or offered for sale at the dealership for $10,000. After the consumer accepts the dealer's offer and agrees to purchase the vehicle, the dealer learns that the consumer has a poor credit history. The lending company charges the dealer a premium of $500 to accept the retail installment contract. The dealer then tries to add this $500 to the contract with the consumer as a "loan fee." This practice is unlawful;

(B) A person advertises a vehicle for $20,000 in the local newspaper. The vehicle has $1,500 worth of after-market accessories on the vehicle. When the consumer arrives at the dealership and wants to purchase the vehicle, the salesperson tells the consumer that the price is $21,500 with the added accessories. This practice is unlawful. If the dealer wants reimbursement for these options, the dealer should ensure that amount is included in any advertised price; and

(C) A motorcycle dealer charges $350 to set up and assemble a motorcycle. This amount must be included in any offering price advertised and cannot be noted only by disclosure at the bottom of the advertisement with the use of an asterisk. Further, any price displayed on the motorcycle or price quoted to a consumer during negotiations must include this amount.

(d) Limitations on Offering Price -- An extension sticker shall accurately itemize and describe the charge(s) added to or subtracted from the MSRP to reach the offering price. No charge may be added for goods or services not actually provided. No charge may be added for services required by the manufacturer or distributor which are performed by a dealer prior to delivery of a motor vehicle to a retail consumer. No charge may be added for any overhead expense such as warehousing, flooring, advertising, and clerical costs. No charge may be added for transportation costs charged by the manufacturer or distributor to the dealer and included in the MSRP. In the case of inland freight, setup and dealer preparation, the charge listed must be the dealer's actual cost for freight from the port of entry to the dealership, and the actual cost of setup and dealer preparation and not included in the MSRP;

(e) Additional Dealer Mark-up - If the offering price is greater than the MSRP, the portion of the difference shown on the extension sticker between the offering price and the MSRP not representing additional goods or services shall be described as "additional dealer profit," "additional mark-up" or by a term of similar import;

(f) Unconscionable Add-on Pricing - A person may not make false or misleading representations concerning the nature or amounts of charges for additional goods, accessories, services, products or insurance sold in conjunction with the sale or lease of a motor vehicle by selling them at a price which is unconscionably higher than the price used by the person for the sale of the same or substantially similar goods, accessories, services, products or insurance to other consumers;

OFFICIAL COMMENTARY: While the average consumer knows that a motor vehicle is a negotiated price item, many expect that the cost of extended service contracts, protective coating products, credit life insurance or other additional products are sold at fixed non-negotiable prices. Some unscrupulous dealers and brokers, however, have charged as much for these products as they can, based upon the susceptibility of the customer. Unfortunately, sometimes the most vulnerable consumers, such as those with problems such as illiteracy, a physical infirmity, a mental handicap, an inability to understand the English language or other limitations, are charged well in excess of the fair market value. This rule does not limit a dealer's ability to mark up or down the selling price of a product or service in the normal course of business. This includes offering special discounts to repeat customers or volume discounts to purchasers of large quantities of products or services.

(g) Disclosing Document Fee -- The Dealer Title and Registration Document Preparation Service fee may be separately stated in all advertisements and sales documents. If separately stated, the disclosure shall be clear and conspicuous;

(h) Document Fee Not Government Required -- A person shall not represent a Dealer Title and Registration Document Preparation Service fee as a governmental fee or one required by government;

(i) Vehicle Availability -- A dealer or broker may not advise prospective customers that an advertised vehicle is available when the vehicle is not available for sale, or that an advertised vehicle is not available for sale when the vehicle is available for sale;

(j) Undisclosed Price Packing -- A dealer or broker may not sell or lease a motor vehicle to a consumer with the cost of any additional goods, accessories, services, products or insurance added to the sale or lease, without the consumer's actual knowledge, written consent and individual itemization of all such additional costs listed on any purchase or lease agreement;

(k) Undisclosed Fee Payments -- A dealer who sells or leases a motor vehicle to a consumer and makes any payment to any non-employee third-party in conjunction with the sale or lease, other than a referral fee of $100 or less (also known as a "bird-dog" payment), must specifically itemize such payment on the consumer's lease or purchase agreement;

(L) False Representations Regarding Financing or Goods -- A person may not falsely represent to a consumer that the person:

(A) Will not sell or lease a motor vehicle to the consumer; or

(B) Cannot provide financing for the consumer unless the consumer purchases additional goods, accessories, services, products or insurance or that such additional goods, accessories, services, products or insurance are free or included in the price of a motor vehicle or the financing;

OFFICIAL COMMENTARY: Due to many changes in the motor vehicle industry, including lower profit margins on the actual motor vehicle transaction, dealers and brokers have had to focus more on higher profits in the sale of additional goods, accessories, services, products or insurance. This rule ensures a consumer is not misled into purchasing anything other than the motor vehicle, without the consumer's informed knowledge and consent. Nothing in this rule prohibits a dealer from ensuring that a consumer has motor vehicle insurance required by law or according to the terms of financing in order to protect the collateral financed. No person, however, can make false statements regarding any requirement to purchase products or services. This rule does not prohibit dealers from adding accessories, which enhance the value and marketability of a vehicle to some of their inventory, and including them in the offering price of the vehicle. If a dealer adds high profit aftermarket products, including, but not limited to, paint protector, door edge guards and glass etching, to its vehicles which do not correspondingly increase the actual cash value of the vehicles, such practice would be carefully scrutinized as a possible violation of this rule.

(m) Payment Price Packing -- During negotiations for the sale or lease of a motor vehicle, a dealer or broker may not quote to a consumer a monthly payment or total price for the sale or lease of a motor vehicle that includes the cost of any additional goods, accessories, services, products or insurance, including, but not limited to, extended warranties, security products, protectants, credit life or gap insurance, that are sold in conjunction with the sale or lease of a motor vehicle, unless the dealer or broker also clearly and conspicuously separately discloses in writing, during negotiations and prior to any purchase or lease agreement being executed by a customer:

(A) The individual price of each additional good, accessory, service, product or insurance; and

(B) The total cost of the lease or sale of the vehicle and the monthly payment, without such additional items included.

OFFICIAL COMMENTARY: This rule addresses the practice that is commonly referred to as "packing," or the "presumptive sale." "Packing" is the deceptive practice of misrepresenting monthly payments or total cost of a vehicle to consumers during motor vehicle sales and lease negotiations in order to surreptitiously facilitate the sale of additional motor vehicle related goods, accessories, services, products or insurance. Consumers are entitled to be dealt with in a fair and non-deceptive manner during negotiations to buy or lease a motor vehicle, including the right to receive timely, accurate and non-misleading information about the cost of the vehicle and all related goods, accessories, services, products or insurance they are buying or leasing. Some dealers have used "packed" payment schemes and poor disclosures to trick consumers into believing that services such as credit insurance, vehicle service contracts, chemical protection, and security devices are included at no additional cost or provided "free" in the purchase or lease agreement; or that they are discounted when they are not. Others have quoted monthly payments calculated upon interest rates far in excess of what they believe will be the final interest rate or simply add an extra $40 or more to the monthly payment than what is needed to cover the price of the vehicle. They use this inflated quote in order to build in some "legroom" to later add other optional products and services to the transaction with the extra cost hidden or appearing lower to the consumer. Because the monthly payment does not increase and because the consumer believes the products are "free" or discounted, most consumers do not object when the products are included in the final contract.

(n) Disclosure of Service Contract Coverage -- A dealer may not misrepresent or fail to clearly and conspicuously disclose the following terms or conditions of an extended service contract sold in conjunction with the sale or lease of a motor vehicle: the length of the coverage, what parts or systems of the vehicle are covered by the contract, any exclusions in the coverage, and that there may be an existing manufacturer's warranty which provides the same or similar coverage. If the dealer advertises that a vehicle has an existing manufacturer's warranty or the dealer knows a vehicle has an existing manufacturer's warranty, the dealer must disclose the terms of the remaining warranty coverage;

(o) Disclosure of Material Nonconformities and Defects -- A dealer or broker shall disclose existing material nonconformities and defects about which the dealer or broker knows or negligently disregarded when the dealer or broker should have known, prior to sale or lease of a motor vehicle;

OFFICIAL COMMENTARY: Unless explicitly disclosed prior to a sale or lease, a motor vehicle that is offered for sale or lease to the public is represented, either directly or by implication, to be roadworthy when it is sold, to have an unbranded title and to have no undisclosed material defects. The dealer is in a superior position to inspect and determine the condition of a vehicle prior to marketing the vehicle. It is an easy matter, through a number of industry and internet sources, for a dealer or broker to review a vehicle's title, damage and ownership history. The intent of this rule is to conform its applicability to the maximum extent permitted by ORS 646.608 and the holding in State ex rel. Redden v. Discount Fabrics, Inc., 289 Or 375, 615 P2d 1034 (1980): "Under the terms [of the Unlawful Trade Practices Act] a defendant is liable for misrepresentations made negligently, without evidence that it was attended by either conscious ignorance or reckless indifference to its truth or falsity, whereas evidence that a misrepresentation was made negligently is insufficient in an action for common law fraud. In other words, the term 'wilful,' as defined by ¦ 646.60, requires no more than proof of ordinary negligence by a defendant in not knowing, when it should have known, that a representation made by him was not true." ORS 646.608 (2) states: "A representation under subsection (1) of this section or ORS 646.607 may be any manifestation of any assertion by words or conduct, including, but not limited to, a failure to disclose a fact."

This rule does not change the existing laws regarding warranties on used vehicles nor does it place any new requirements on dealers or brokers. Dealers and brokers should understand, however, that simply because they comply with the FTC "As-Is" rule it does not relieve them of their obligation to disclose material defects they knew or should have known about. A dealer is not required to guarantee, warrant or represent that a used vehicle will not have any mechanical problems or undetected material defects once the vehicle is sold. Further, a dealer need not create an exhaustive list of every ding, paint scratch, fabric tear or discoloration clearly visible upon inspection by an average consumer. Examples of negligent disregard of some things that should put a dealer on notice and trigger its duty to disclose might include, but is not limited to, a large pool of oil or antifreeze under the vehicle, dark colored smoke coming from an exhaust pipe, water stains on carpet or doors, a different color paint than the body under the hood or in the trunk or tires that are worn very unevenly.

(p) False or Unsubstantiated Representations -- A dealer or broker may not make a misrepresentation or a false or incomplete statement of fact in conjunction with the sale or lease of a motor vehicle, or any other representation or statement which the dealer or broker does not have sufficient information upon which a reasonable belief in the truth of the representation could be based;

(q) False Statement of Broker Fees -- A broker may not misrepresent the source or nature of any profit, compensation or fee which the broker will receive for its services or cause a consumer to believe the services are free or at no cost to the consumer, when they are not;

OFFICIAL COMMENTARY: Brokers are a fiduciary of a consumer on whose behalf they have agreed to negotiate the purchase or lease of a vehicle. Unlike a dealer, a broker is not engaging in an "arm's length" transaction. Brokers market their services to act in the consumer's best interest. They are in an agency relationship. The consumer has a right to rely on that relationship. For example, a broker who tells a consumer that the broker may be receiving compensation from a dealer as part of the transaction, when the funds for that payment were part of the total amount paid by the consumer as part of the purchase or lease, is misrepresenting the nature of the transaction and making a false statement as to the source of the funds the broker will be receiving. The correct disclosure would be that the broker has added its fee to the price which it negotiated with the seller on behalf of the consumer. While ORS 822.047 does not require the broker to disclose the amount of its profit, once the broker undertakes to act on behalf of a consumer, or do anything that could cause a consumer to believe the broker is acting on the consumer's behalf, the dealer or broker may no longer engage in self-dealing, but must act in the consumer's best interest. Further, if a consumer asks what the fee is for the service, the broker may not misrepresent the amount of the fee being charged. In no case may the broker misrepresent the nature of the charge, the amount of the fee or in what way the fee for the broker's service is paid.

(r) Disclosure of Dealer/Broker Status - A dealer or broker may not misrepresent or fail to disclose whether it is acting as a dealer or broker when it has done anything to cause a consumer to believe it is acting as a broker for the consumer in the purchase or lease of a motor vehicle;

OFFICIAL COMMENTARY: It is well established in law that a broker is in a fiduciary relationship with its client. Fiduciary duties can be grouped into three categories:

(A) Duty of Loyalty. A fiduciary must act in accordance with the interests of the beneficiary, and not his own interests;

(B) Duty of Candor. A fiduciary must not withhold information from the beneficiary, particularly with respect to the fiduciary's dealings with the beneficiary; and

(C) Duty of Care. A fiduciary must act with some degree of care with respect to the beneficiary. This is usually formulated as a duty to exercise the care that an ordinarily prudent person would in similar circumstances. When representing a consumer, a broker acts as an agent for the consumer and is in a fiduciary relationship with the consumer. As such, a broker occupies a position of such power and confidence with regard to the property of another that the law requires brokers to act solely in the interest of the person whom they represent and in good faith. In Oregon, only one type of dealer license is required, whether the licensee acts as a dealer or broker. This can lead to confusion by a consumer. If the consumer believes the person the consumer contacted was a broker, the consumer expects that person to act in the consumer's best interest. Brokers have an obligation to ensure the consumer knows what the broker's business status is in relation to the transaction and whether the consumer is dealing with it as a broker or a dealer. Some non-franchised dealers have added to the confusion by simultaneously advertising that they are new and used vehicle dealers and brokers. Such advertising places the burden upon such a business to ensure it clearly discloses in what capacity it is dealing with the consumer. If a consumer first contacts a dealer who does not have a vehicle in its own inventory that the consumer wishes to buy or lease, and the dealer agrees to find, negotiate or arrange the purchase or lease of a specific vehicle for the consumer from a third party, a broker relationship may be created. If the dealer, without placing any obligations on the consumer, finds the desired vehicle, purchases it and places it into the dealer's own inventory, the dealer may thereafter negotiate and sell or lease the vehicle to the consumer and still remain a dealer. However, a dealer may become a broker under several circumstances, including, but not limited to, the following: the dealer places a contractual or monetary obligation on the consumer in order to arrange or negotiate the purchase or lease of the vehicle; the dealer makes any statement which could cause an average consumer to believe the dealer was acting as an agent of the consumer (such as saying the dealer would negotiate the best price for the transaction); or the dealer arranges the transaction for the consumer through another dealer and receives any compensation from the consumer or other dealer.

(s) False Credit Applications -- No person shall for any motor vehicle transaction:

(A) Knowingly prepare, participate or assist in the preparation or submission of a false, misleading or deceptive credit application;

(B) Direct any person to prepare or submit a false, misleading or deceptive credit application;

(C) Request or allow a consumer to sign a blank or incomplete credit application; or

(D) Knowingly accept or submit a false, misleading or deceptive credit application.

(t) Illusory or Deferred Down-Payments -- Hold Check Agreements -- In any transaction for a motor vehicle:

(A) No person shall request or accept from a consumer as payment for any part of a purchase or lease, or list the same as a down payment on any purchase order, lease agreement, retail installment contract, or credit application, any of the following:

(i) A promissory note for future payment, without clearly disclosing on the purchase order, lease agreement, retail installment contract, or credit application: the amount of the promissory note given by the consumer, the terms of repayment, any interest rate and that such amount is in the form of a promissory note;

(ii) A check that the person knows or should have known is drawn upon an account with insufficient funds, without clearly disclosing on the purchase order, lease agreement, retail installment contract, or credit application: the amount of such check, the terms of repayment, that there were insufficient funds in the checking account at the time the check was drawn and the date the check is expected to have sufficient funds available for its payment; or

(iii) A post-dated check that the consumer has given the person for payment at a future date, without clearly disclosing on the purchase order, lease agreement, retail installment contract, or credit application: the amount of such check, that the check is post-dated, and the date the check is due and payable.

(B) No person shall accept any check listed in (t)(A)(ii) or (iii) above without having a written hold check agreement, clearly disclosing on the purchase order, lease agreement or retail installment contract all terms and conditions of the hold check agreement, and disclosing the fact that there is a hold check agreement to any financial organization to which credit is requested;

(C) No person shall accept any payment listed in (t)(A)(i), (ii) or (iii) above without properly listing and identifying such payment in any retail installment contract or lease agreement; and

(D) No deferred portion of a down payment may be treated as part of the down payment if it is payable later than the due date of the second otherwise regularly scheduled payment and is not subject to a finance charge.

OFFICIAL COMMENTARY: This rule addresses appropriate disclosure in accordance with the single document rule (ORS 83.020), Regulation Z, specifically 12 CFR Sec. 226.2(a)(18), and Regulation M. It also ensures that the actual nature and terms of any deferred payment made on a purchase or lease of a motor vehicle are clearly disclosed on not only the purchase or lease agreement and retail installment contract, but also on any credit application. Sometimes when a consumer does not have sufficient funds, which may be required as a down payment from a financial organization, a dealer will request a promissory note or a post-dated check from a consumer. It is not uncommon for the check to be drawn on an account with insufficient funds at the time it is written. The promissory note or check is then listed as a down payment on a purchase or lease agreement and/or the credit application without disclosing the actual form of the payment to the potential lender. This makes it falsely appear that the consumer has paid a sum certain at the time of the transaction when the dealer or broker has not yet received those funds. Often the consumer also gives the dealer or broker explicit instructions not to deposit the check until some date in the future. This may be done in order to make the consumer appear more creditworthy than his/her actual financial status would substantiate. Then, not only is the consumer required to make future monthly payments on the motor vehicle, the consumer is also under the burden of paying additional future payments for a check or promissory note that the consumer may or may not be able to afford. A dealer or broker might also cash the check earlier than agreed upon, or as directed by the consumer, causing the consumer's account to be overdrawn and damaging the consumer's credit. Listing a deferred payment on a credit application as a down payment, without disclosing its actual terms and conditions, is fraud upon the financial organization, which bases its decisions on the information supplied by the dealer or broker. It is not uncommon to later find the consumer in default on the loan, which may not have been approved had honest information been disclosed on the credit application.

(u) Yield Spread Premium Disclosure -- Any dealer or broker that charges a consumer a yield spread premium for arranging financing for the consumer:

(A) Shall clearly and conspicuously disclose in writing, prior to the consumer applying for credit or executing a purchase or lease agreement:

(i) That the dealer or broker may receive additional compensation from the consumer for arranging the financing which may be in the form of a fee or additional loan points; and

(ii) That interest rates quoted by the dealer or broker may be negotiable; and

(B) Shall not, during the negotiation for the sale or lease of a motor vehicle, quote a monthly payment calculated using an interest rate that is more than three points higher than the buy rate, unless the dealer or broker discloses in writing the yield spread premium to the consumer, if the dealer or broker quoting the rate knows the consumer's credit score or has the ability to obtain the consumer's credit score at the time the monthly payment is quoted.

OFFICIAL COMMENTARY: This rule is only applicable when a dealer or broker arranges financing for a consumer buying or leasing a motor vehicle and charges a fee or yield spread premium. When a dealer or broker arranges vehicle financing for a consumer it often charges a fee or adds points to the buy-rate charged by the financial organization. This mark-up to the cost of financing may cost consumers thousands of dollars over the term of a loan or lease. Without disclosure, many consumers are unaware that the dealer or broker is making a profit for arranging the consumer's financing. Many consumers believe that the dealer or broker is getting them the best rates for which they qualify. This rule gives the consumer the most basic information regarding costs incurred when the consumer finances his/her transaction through a dealer or broker. Subsection (u)(B) of this paragraph addresses an unlawful practice known as "rate packing." The dealer runs the credit of a prospective buyer and, knowing the buyer's credit score, calculates the monthly payment using an interest rate that is excessively more than what the consumer's credit score would qualify for and often much higher than what the financial organization would be willing to allow on a point yield premium. Once the deal is closed, the dealer has effectively left plenty of "legroom" in the deal for finance personnel. Finance personnel will then drop the rate down to the maximum rate the financial organization allows for a point yield premium, usually two or three points, and include additional products or insurance in the deal with the consumer not aware the cost was added to the price of the vehicle. The consumer is then presented with expensive options or service contracts "for only a few extra dollars per month" or "for no extra charge."

(v) Misleading or Deceptive Tying Requirements -- No person shall represent or imply that the person requires a consumer to purchase anything additional, in conjunction with the sale or lease of a motor vehicle, including, but not limited to, any goods, accessories, services, products, insurance, extended service or maintenance contracts, in order to:

(A) Purchase or lease a motor vehicle, unless the person requires all consumers to purchase the same additional items in order to purchase or lease any vehicles from that person; or

(B) Obtain financing for a motor vehicle unless the person requires all consumers to purchase the same additional items in order to obtain financing for that person's motor vehicles; and

(C) The person will not sell, lease or obtain financing for any motor vehicles without the sale of such additional items to any other consumer, whatsoever.

OFFICIAL COMMENTARY: A tying arrangement is one in which a person conditions the sale or financing of one product to the purchase of another product. This rule makes it clear that a person may not falsely represent that the person will not or cannot sell or finance a motor vehicle without the consumer purchasing additional items when in fact the person does sell or finance vehicles in the course of its business without such requirements in each and every transaction. This rule does not prohibit a dealer from requiring or ensuring that a consumer has purchased motor vehicle insurance as may be required by law or the terms of a lease or purchase agreement.

(w) Deceptive Financing Representations -- No dealer or broker shall falsely represent that a transaction is conditioned upon the consumer financing the transaction with or through the dealer or broker when in fact the consumer is able to finance through other means or sources;

(x) Unlawful Spot Delivery - No dealer or broker shall spot deliver a vehicle to any consumer unless the dealer or broker has a reasonable basis to believe the consumer could qualify for the terms of financing quoted to the consumer at the time of delivery;

(y) Misrepresentation Regarding Failure to Finance -- No dealer or broker, who has spot delivered a vehicle to a consumer and thereafter fails to complete the transaction in accordance with the terms offered in the purchase order, lease agreement or retail installment contract, shall misrepresent to a consumer the reason that the consumer does not qualify for financing or misrepresent why the transaction cannot be completed according to the terms offered;

OFFICIAL COMMENTARY: This rule addresses the unlawful business practice commonly known as "yo-yo financing" or "bushing." In a yo-yo transaction, a dealer quotes the consumer finance terms that are not yet accepted by a financial organization in order to get the consumer to take delivery of the vehicle "on the spot." Later, when the dealer either cannot get the quoted terms funded or cannot make the expected profit from added points, the dealer tells the consumer that the deal did not go through and that the dealer needs to rewrite the transaction on terms usually less favorable to the consumer. It is a common practice of dealers and brokers to quote financing terms that include an undisclosed yield spread premium when they spot deliver a vehicle. When a dealer engages in the practice of unwinding a transaction even though the consumer is qualified for the original quoted terms, simply so the dealer can add interest points or make more profit, it is one of the most egregious forms of the yo-yo scam. If there is a financial organization that will fund the quoted rate, the dealer or broker will never be justified in unwinding the transaction because the rate is not low enough to allow the dealer or broker to add a yield spread premium. A dealer or broker either knows, or has the ability to find out, prior to the time it spot delivers a motor vehicle and quotes finance terms: the available buy-rates, the consumer's credit history, and the consumer's credit score. Dealers who "spot deliver" motor vehicles are in fact the originating creditors extending the finance terms to the consumer. In today's credit market, a dealer can almost always find a financial organization that will accept the transaction. The only question is whether the dealer will take a loss, break even or make a profit on the financing. The primary targets of this rule are dealers and brokers who offer terms and availability of financing without having a good faith basis based upon the consumer's credit worthiness, simply to have the consumer accept spot delivery. This rule should deter brokers or dealers from knowingly quoting rates to consumers _ which they know the consumer will not be approved for _ simply to get the consumer to take delivery of the vehicle. Not all transactions in which a credit application is not approved are scams. Sometimes a consumer does not have strong enough credit to quality for the most attractive financing offers, has a change in financial circumstances or has provided incomplete or false information on the credit application.

(z) Anti-Bushing Rule - In any transaction in which the dealer or broker has spot delivered a vehicle to a consumer and the consumer does not qualify for the terms offered, the dealer or broker shall, prior to offering, negotiating or entering into new terms for the purchase or lease of a vehicle:

(A) Inform the consumer that the consumer is entitled to have all items of value received from the consumer as part of the transaction, including any trade-in and down payment, returned to the consumer;

(B) If the consumer is physically present when the dealer or broker informs the consumer that the consumer does not qualify for the terms offered, return all items of value received from the consumer as part of the transaction; and

(C) If the dealer or broker informs a consumer by telephone or other means, without the consumer present, that the consumer did not qualify for the terms offered, clearly disclose the consumer's right to receive the immediate return of all items of value given by the consumer as part of the transaction when the consumer returns the spot delivered vehicle. Simply informing a consumer of the consumer's right to get back his/her down payment and trade-in and having the consumer sign a waiver or rescission form, without the actual ability for the consumer to have his/her down payment back and take possession of his/her trade-in, does not comply with ORS 646.877. The consumer's down payment and trade-in must be actually available to the consumer should the consumer wish to rescind the transaction and not enter into a new transaction. If a consumer has paid a down payment with a check, the dealer is not required to refund the down payment until the consumer's check has cleared.

OFFICIAL COMMENTARY: This rule clarifies the Oregon "Anti-bushing" statute, ORS 646.877, so that dealers and brokers clearly understand its requirements. This statute gives both dealers and consumers specific rights when it is necessary to unwind a spot delivery transaction. While the statute clearly states "the seller shall return to the buyer all items of value received from the buyer as part of the transaction," many dealers and brokers do not actually give or even offer the consumer the down payment and trade-in back before the dealer or broker tries to get the consumer to sign a new contract. Many dealers and brokers do not even have the down payment or trade-in readily available when they inform the consumer that the consumer needs to enter into a new contract. Simply offering to return the items of value and having a consumer agree to rescind the prior deal is not in compliance with the statute. The consumer has an absolute right to walk away from the deal if the original offer is not going to be honored. Without having actual ability to take possession of the trade-in and down payment, the seller has the ability to pressure a consumer into entering into a less favorable contract and has an uneven bargaining position. Having a refund check presently available and giving the consumer his/her keys with the trade-in vehicle immediately available is necessary for compliance.

(aa) Unlawful Negative Equity Adjustment -- No person shall make a negative equity adjustment in the sale or lease of a motor vehicle;

OFFICIAL COMMENTARY: Both federal and Oregon law prohibit the practice of negative equity adjustments. On April 6, 1998, the Board of Governors of the Federal Reserve System (the Federal Reserve) published, as a final rule, revisions to the Official Staff Commentary to Regulation Z, 12 CFR Part 226, Supplement I-Official Staff Commentary. See 63 Fed. Reg. 16669. The revisions to the Federal Reserve's Official Staff Commentary to Regulation Z became effective March 31, 1998. Compliance with the Official Staff Commentary became mandatory on October 1, 1998.

The final rule states, in part: Under Regulation Z, the term "down payment" refers to an amount paid to a seller to reduce the "cash price" in a credit sale transaction. Comment 2(a)(18)-3 gives guidance on how a creditor discloses the down payment if a trade-in is involved in the sale and if the amount of an existing lien exceeds the value of the trade-in. The comment clarifies that creditors should disclose the down payment as zero and not a negative amount. The comment addresses a credit sale and financed down payment treated as a single transaction; it does not affect creditor's ability to disclose them as two transactions. 63 Fed. Reg. 16669. Section 2(a)(18)-3 of the Official Staff Commentary provides:"3. Effect of existing liens. In a credit sale, the 'down payment' may only be used to reduce the cash price. For example, when the existing lien on an automobile to be traded in exceeds the value of the automobile, creditors must disclose a zero on the down payment line rather than a negative number. To illustrate, assume a consumer owes $10,000 on an existing automobile loan and that the trade-in value of the automobile is only $8,000, leaving a $2,000 deficit. The creditor should disclose a down payment of $0, not -$2,000." Several states, including Oregon, specifically permit negative equity to be included in the amount financed or principal balance of a retail installment contract and mandate that negative equity appear as an other amount financed, not as a component of the cash price or down payment. Chapter 83 of the Oregon Revised Statutes sets forth the requirements and limitations for every retail installment contract and mandates where negative equity must be disclosed on the contract and does not allow negative equity adjustments to be made to the cash sale price. First, Oregon law defines the applicable terms:

ORS 83.010(1): "'Cash sale price' means the price for which the seller would have sold or furnished to the buyer, and the buyer would have bought or obtained from the seller, the goods or services which are the subject matter of a retail installment transaction, if the sale had been a sale for cash. The cash sale price may include any taxes, registration and license fees and charges for transferring vehicle titles, delivery, installation, servicing, repairs, alterations or improvements."

ORS 83.010(4): "'Principal balance' means the cash sale price of the goods or services which are the subject matter of a retail installment contract less the amount of the buyer's down payment in money or goods or both, plus the amounts, if any, included therein, if a separate identified charge is made therefor and stated in the contract, for insurance and official fees."

Finally, Oregon law specifies the contents, sequence and location of the required disclosures in the contract:

ORS 83.030: "Contents of contract. The retail installment contract shall contain the names of the seller and the buyer, the place of business of the seller, the residence or other address of the buyer as specified by the buyer and a description or identification of the goods sold or to be sold, or services furnished or rendered or to be furnished or rendered. The contract also shall contain the following items, which shall be set forth in the sequence appearing below; however, additional items may be included to explain the calculations involved in determining the balance to be paid by the buyer:

(A) The cash sale price of each item of goods or services;

(B) The amount of the buyer's down payment, identifying the amounts paid in money and allowed for goods traded in;

(C) The difference between subsections (1) and (2) of this section;

(D) The aggregate amount, if any, included for insurance, specifying the type or types of insurance and the terms of coverage;

(E) The aggregate amount of official fees;

(F) The principal balance, which is the sum of subsections (3), (4) and (5) of this section;" There is no question but that the state and federal laws clearly contemplate the disclosure of negative equity. The use of a "negative equity adjustment" is sometimes referred to as "creative financing." The reality is that the practice consists of committing fraud in reporting to a financial organization regarding the true value of the trade-in and misrepresenting the actual amount of the down payment made in order to get financing on the new transaction. The California case of Reta Thompson v. 10,000 RV Sales, Inc., 130 Cal.App.4th 950, 979, 31 Cal. Rptr. 3d 18. (Ct. App. 2005) succinctly explained why this practice is unlawful: "Although financing properly disclosed negative equity is permissible under the (California Automobile Sales Finance Act (ASFA)) and Regulation Z, it is not permissible to include the over-allowance in the cash price of a vehicle. This interpretation of the ASFA is consistent with its remedial purpose of protecting consumers from inaccurate and unfair credit practices through full and honest disclosures. Allowing a dealer to include over-allowances on trade-in vehicles in the cash price of vehicles being purchased adversely affects consumers who are funded long-term loans for which they otherwise may not qualify and which they may not be able to afford. Additionally, this practice negatively impacts lenders who extend credit for sales misrepresented to them based on fictitious values of vehicles being financed. As the evidence at trial showed, lenders cannot determine fraud from the face of a contract when the numbers have been manipulated. Finally, and of no less import, enforcing the ASFA's disclosure requirements protects dealership competitors who are at a disadvantage if they quote a true trade-in value rather than an inflated one. Requiring a meaningful disclosure of credit terms both protects consumers and enhances fair business competition. (15 U.S.C. ¦ 1601(a))."

Oregon law, as well as Regulation Z, permit the financing of prior credit balances on trade-in vehicles as long as the amount financed is clearly and separately disclosed and properly identified. (See Official staff interpretation, 12 CFR ¦ 226.18(c) (Supp. I 2005).) To engage in any negative equity adjustment not only violates Oregon Revised Statutes Chapter 83 disclosures and Regulation Z, but is a violation of the Oregon Unlawful Trade Practices Act in several sections which make it unlawful when a dealer or broker:

(A) "Makes false or misleading representations concerning credit availability or the nature of the transaction or obligation incurred," ORS 646.608(1)(k); or

(B) "Makes false or misleading representations of fact concerning the offering price of, or the person's cost for real estate, goods or services,"

ORS 646.608(1)(s).

This rule requires that a consumer be clearly informed that the negative equity in his/her trade-in has been added to his/her purchase or lease. Compliance with this rule will eliminate those situations where a consumer believes (s)he has purchased a vehicle at one price, only to discover after closer examination of the deal documents that the negative equity has been added to the cost of the new transaction. The consequences are enormous. The added cost of financing can add up to thousands of extra dollars for a consumer, plus makes it even harder to trade-in the new vehicle at a later date because the negative equity on the new vehicle is even more than the original trade-in.

This rule creates no new law. It simply states that dealers and brokers must obey the laws that have been in effect for years. All of the published purchase agreements and retail installment contracts printed and distributed by the different Oregon dealer associations added a disclosure line for negative equity after the changes to Regulation Z became effective. The time has come that they be used honestly in every transaction.

(bb) Negative Equity Disclosure -- Any negative equity of a vehicle taken in trade as part of any motor vehicle transaction shall be clearly and conspicuously disclosed in any purchase order, lease agreement or retail installment contract.

Stat. Auth.: ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u)
Hist.: 1AG 6-1979, f. & ef. 12-19-79; JD 4-1993, f. 8-6-93, cert. ef. 8-16-93; JD 3-1996, f. 10-18-96, cert. ef. 10-23-96; DOJ 10-2001(Temp), f. & cert. ef. 10-17-01 thru 4-14-02; DOJ 3-2002, f. & cert. ef. 4-22-02; DOJ 15-2007, f. 12-20-07, cert. ef. 1-2-08

137-020-0025

Mobile Home Consignment

(1) Purpose: The purpose of this rule is to declare as unfair or deceptive in trade or commerce the practice of selling mobile homes on consignment without complying with this rule.

(2) Authority: This rule is adopted pursuant to ORS Chapter 183 on authority granted to the Attorney General by 646.608(1)(u) and (4).

(3) Effective Date: This rule applies to consignment sales agreements entered into on or after January 1, 1980.

(4) Definitions: For purposes of this rule:

(a) The definitions of terms set forth in ORS 646.605 are applicable;

(b) "Mobile Home Dealer" means a person who regularly engages in the sale of mobile homes as defined by this rule;

(c) "Mobile Home" means a non-self propelled structure, transportable in one or more sections, which is designed to be used as a permanent family dwelling;

(d) "Consignment Seller" means the owner of a mobile home who enlists the assistance of a mobile home dealer to offer his or her mobile home for sale to a third party and where the mobile home dealer receives consideration for such assistance. For purposes of this rule, it does not matter that the mobile home dealer does not take possession of the mobile home;

(e) "Minimum Net Agreement" means an agreement characterized by an arrangement in which a consignment seller agrees to accept a fixed dollar amount as his or her share of the proceeds regardless of the total sale price of the unit sold.

(5) Unfair or Deceptive Mobile Home Consignment Practices: A mobile home dealer engages in conduct which is unfair or deceptive in trade or commerce when it fails to deliver to a consignment seller the written agreements in compliance with the following:

(a) A mobile home dealer shall provide a mobile home consignment seller with a copy of a written consignment agreement prior to the date that the mobile home is offered for sale;

(b) The written consignment agreement shall contain the following:

(A) Identification of the mobile home offered for sale;

(B) The length of the term of the consignment agreement;

(C) If the mobile home dealer advises the consignment seller of an estimated retail value of the mobile home, a statement of that value shall be included;

(D) Identification of any class of expenses, including, but not limited to, taxes, repairs, transportation cost or tear down expenses, to be deducted from the consignment seller's portion of the proceeds of the sale in addition to the mobile home dealer's commission;

(E) The mobile home dealer's commission, stated in terms of a dollar amount or percentage of the sales price, unless it is a minimum net agreement;

(F) In the event of a minimum net agreement, the amount to be paid to the consignment seller shall be so stated;

(G) A statement of whether or not the consignment seller will have the right to approve the final purchase price; and

(H) The signature of the consignment seller.

(c) The mobile home dealer shall promptly deliver to the consignment seller a copy of the purchase agreement, which shall include the sales price, after the purchase agreement has been executed by the third party purchaser.

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.608(1)(u)
Hist.: 1AG 3-1979, f. 10-11-79, ef. 1-1-80

137-020-0030

Updating

(1) Purpose: It is the purpose of this rule to define as an unfair trade practice the failure to disclose the year in which a motor vehicle or motor vehicle chassis was actually manufactured.

(2) Authority: This rule is adopted pursuant to ORS Chapter 183 on authority granted to the Attorney General by 646.608(1)(s) and (4).

(3) Definitions: For purposes of these rules:

(a) "Person" is defined in ORS 646.605(4);

(b) "Motor Vehicle" means a self-propelled vehicle intended for use upon public highways which is or may be used or bought primarily for personal, family, or household purposes. For purposes of this rule, the term "motor vehicle" includes mobile homes, motor homes and recreational vehicles, but does not include automobiles and motorcycles;

(c) "Motor Vehicle Chassis" means the frame assembly, power plant, and all other appurtenances necessary to make a motor vehicle self-propelled.

(4) This rule is effective on and after September 1, 1976.

(5) Failure to Disclose Year of Manufacture:

(a) It is unfair or deceptive conduct in trade or commerce to sell, or offer for sale, a motor vehicle to its first purchaser for purposes other than resale without disclosing prior to the time of entering into any binding sales agreement:

(A) The month and year in which such motor vehicle was manufactured; and

(B) If the motor vehicle chassis was manufactured in a month or year different from that of the completed motor vehicle, the month and year in which such motor vehicle chassis was manufactured.

(b) Providing a prospective purchaser with a copy of certificate of origin issued by the manufacturer of the motor vehicle or motor vehicle chassis which sets forth the month and year of manufacture shall constitute adequate disclosure for purposes of this rule.

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.608(1)(u)
Hist.: 1AG 16, f. 7-21-76, ef. 9-1-76

137-020-0040

Adoption of FTC Used Car Rule, Federal Truth-in-Lending Act, and Federal Consumer Leasing Law

(1) For purposes of this rule, the following definitions shall apply:

(a) "Truth-in-Lending Act" means the Federal Truth-in-Lending Act, as amended and in effect as of January 2, 2008, including 15 U.S.C. 1601-1665(a), and any regulations which have been adopted thereto and in effect as of January 2, 2008, including but not limited to Regulation Z (12 CFR 226);

(b) "Federal Consumer Leasing Law" means the consumer leasing portions of the Truth-in-Lending Act, 15 USC ¦1667 et seq., as amended and in effect as of January 2, 2008 and all regulations which implement this section including but not limited to Regulation M (12 CFR 213);

(c) "FTC Used Car Rule" means the Federal Trade Commission Used Motor Vehicle Trade Regulation Rule, 16 CFR ¦ 455 et seq., as amended and in effect as of January 2, 2008;

(d) "Person" refers to those individuals and entities as defined in ORS 646.605(4);

(e) "Real Estate, Goods or Services" refers to those items defined in ORS 646.605(7);

(f) "Consummation" means the time at which a consumer becomes contractually obligated on a credit transaction. The time the obligation arises is a matter determined under state law; and

(g) The definitions set forth in OAR 137-020-0020.

(2) It is unfair or deceptive conduct in trade or commerce for a person to advertise, offer credit or extend credit related to the purchase of real estate, goods or services in violation of the Truth-in-Lending Act or the Federal Consumer Leasing Law.

(3) It is unfair or deceptive conduct in trade or commerce for a person to advertise, display for sale or lease, or sell or lease a motor vehicle in violation of the FTC Used Car Rule.

OFFICIAL COMMENTARY: Many advertisements for sales and leases, in particular those for motor vehicles, use one or more of the Regulation Z or Regulation M triggering terms and then fail to make the required disclosures. All three acts also have very specific disclosure requirements which must be given to the consumer prior to the execution of a sales, credit or lease agreement. This rule makes it clear that failure to comply with these federal regulations is a violation of the Oregon Unlawful Trade Practices Act. Each of these three acts is discussed below:

(a) "Regulation Z" Advertising. The Truth-in-Lending Act and accompanying regulations govern credit advertising. An advertisement for closed-end credit which contains a "triggering term" must disclose other major terms, including the annual percentage rate. This rule is intended to ensure that all important terms of a credit plan, not just the most attractive ones, appear in an advertisement.

(b) The following triggering terms require certain disclosures to be made in an advertisement for closed-end credit (12 CFR 226.24):

(A) The amount of the down payment (expressed as either a percentage or dollar amount), in a "credit sale" transaction; Examples: "10% down" "$1000 down" "90% financing" "trade-in with $1000 appraised value required"

(B) The amount of any payment (expressed as either a percentage or dollar amount); Examples: "Monthly payments less than $250 on all our loan plans" "Pay $23.44 per $1000 amount borrowed" "$210.95 per month"

(C) The number of payments or the period of repayment; or "Up to four years to pay" "48 months to pay" "30-year mortgages available"

(D) The amount of any finance charge. Examples: "Financing costs less than $300 per year" "Less than $1200 interest" "$2.00 monthly carrying charge"

(c) If any one of the triggering terms appears, it would be an unfair or deceptive trade practice to fail to clearly and conspicuously disclose in the advertisement:

(A) The amount or percentage of the down payment;

(B) The terms of repayment; and

(C) The "annual percentage rate," using that term or the abbreviation "APR." If the annual percentage rate may be increased after consummation of the credit transaction, that fact also must be stated. The amount or percentage of the "down payment" need not be shown directly, as long as it can be determined from the advertisement. For example, "10% cash required from buyer" or "credit terms require minimum $1000 trade-in" would satisfy the disclosure requirement. The "terms of repayment" may be expressed in a variety of ways, as long as they convey the required information. For example, an automobile finance company might use unit cost to disclose repayment terms: "48 monthly payments of $23.44 for each $1000 borrowed." Similarly, the length of the loan can be expressed as the number of payments or the time period of the loan. Disclosures provided on credit contracts. Creditors must give the required disclosures to the consumer in writing, in a form that the consumer may keep, before consummation of the transaction. See Sec. 226.17(a)(1) and (b). Sometimes the disclosures are placed on the same document with the credit contract, as permitted under comment 17(a)(1)-(3). In such cases, the timing requirement is satisfied if the creditor gives a copy of the document containing the unexecuted credit contract and the disclosures to the consumer to read and sign, and the consumer is free to take possession of and review the document in its entirety before signing. It is not sufficient, however, if the document containing the disclosures is merely shown to the consumer before the consumer signs and becomes obligated; the creditor must give the document to the consumer. If after receiving the document, the consumer signs it and becomes obligated, the consumer may return it to the creditor to execute or process, provided the consumer is also given a copy at that time to keep. http://www.fdic.gov/regulations/laws/rules/6500-1700.html#6500226.17.

"Regulation M" Advertising. If an advertisement promoting a "consumer lease" contains any of the following triggering terms, then five specific disclosures must also be clearly and conspicuously included in the advertisement. It is an unfair or deceptive trade practice to fail to clearly and conspicuously make all five disclosures.

(d) The triggering terms are:

(A) A statement of any capitalized cost reduction or other payment required before or at lease consummation, or by delivery if delivery takes place after consummation, or that no payment is required; or

(B) The amount of any payment.

(e) If any triggering term is used in a consumer lease advertisement then all five of the following disclosures must be in the advertisement:

(A) A statement that the transaction advertised is a lease;

(B) The total amount of any payment (such as security deposit or capitalized cost reduction) required before or at the consummation of the lease, or by delivery if delivery takes place after consummation, or a statement that no such payment is required;

(C) The number, amounts and due dates or periods of scheduled payments under the lease;

(D) Whether or not a security deposit is required; and

(E) In leases where the consumer's liability is based on the difference between the property's residual value and its realized value at the end of the lease term, that an extra charge may be imposed at the end of the lease term. For further information on advertising consumer credit or consumer leases, see the Federal Trade Commission website titled: "How to Advertise Consumer Credit & Lease Terms" at http://www.ftc.gov/bcp/conline/pubs/buspubs/creditad.htm.

Disclosure. Regulation M mandates that all required disclosures be given prior to the consummation of a consumer lease. "FTC Used Car Rule" - Motor vehicle dealers must post a Buyers Guide, also known as an "As-Is" disclosure, in every used vehicle which they display for sale or lease as required under the FTC guidelines. If a used car transaction is conducted in Spanish, the seller must post a Spanish language Buyers Guide on the vehicle before it is displayed or offered for sale. Dealers must post a Buyers Guide before they "offer" a used vehicle for sale. A vehicle is offered for sale when it is displayed for sale or a dealer lets a customer inspect it for the purpose of buying it, even if the car is not fully prepared for delivery. This requirement also applies to used vehicles for sale on a dealer's lot through consignment, power of attorney, or other agreement. At public auctions, dealers and the auction company must comply. The Rule does not apply at auctions that are closed to consumers.

(f) Previously titled or not, any used vehicle that meets the following specifications must post a Buyers Guide. (See OAR 137-020-0020 for the Oregon definition of a used vehicle.) Previously titled or not, any vehicle driven for purposes other than moving or test driving is considered a used vehicle, including light-duty vans, light-duty trucks, demonstrators, and used cars that meet the following specifications:

(A) A gross vehicle weight rating (GVWR) of less than 8,500 pounds;

(B) A curb weight of less than 6,000 pounds; and

(C) A frontal area of less than 46 square feet.

(g) Exceptions to the Rule are:

(A) Motorcycles;

(B) Any vehicle sold for scrap or parts if the dealer submits title documents to the appropriate state authority and obtains a salvage certification; and

(C) Agricultural equipment. FTC "Dealer's Guide to the Used Car Rule" http://www.ftc.gov/bcp/conline/pubs/buspubs/usedcarc.htm FTC consumer guide to "Buying a Used Car" http://www.ftc.gov/bcp/edu/pubs/consumer/autos/aut03.shtm

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u)
Hist.: JD 1-1987, f. 2-5-87, ef. 2-15-87; JD 9-1994(Temp), f. & cert. ef. 11-23-94; JD 5-1995, f. & cert. ef. 4-7-95; DOJ 16-2007, f. 12-20-07, cert. ef. 1-2-08

137-020-0050

Motor Vehicle Advertising

(1) For purposes of this rule, the definitions specified in OAR 137-020-0020 shall apply.

(2) Violations: It is unfair or deceptive in trade or commerce for any person to advertise motor vehicles if:

(a) Trade-in Value -- The advertisement represents that motor vehicles or other property to be received in trade in conjunction with the purchase of a motor vehicle:

(A) Will be valued at a specific amount, range of amounts or guaranteed minimum amount; or

(B) Uses a multiple, such as "double," or other type of increased trade-in allowance;

OFFICIAL COMMENTARY: It is a violation of this rule to guarantee any monetary amount or other value on any vehicle or property used as a trade-in on a motor vehicle transaction. This includes any reference to any trade publication valuation, for example, it would be unlawful to state that a trade-in would be valued at "Kelley Blue Book" or like publication.

(b) Dealer Rebates -- The advertisement represents that purchasers of vehicles will receive a cash rebate, discount certificate, coupon, cash card for products or services or other similar promotion unless it is offered by a manufacturer or another party, independent of the dealer and without dealer participation.

OFFICIAL COMMENTARY: Rebates controlled by the dealer may be illusory because the dealer may simply increase the offering price or limit the dealer's negotiated price by the same amount as the ostensible value of the rebate. The rule eliminates this possibility by prohibiting such rebates. Therefore, no monetary or similar form of remuneration to a consumer is allowed in the offering of a motor vehicle, unless it is a promotion paid for by a party wholly independent of the dealer and that third party is not paid by the dealer for offering the promotion.

(c) Clarification of sale or lease -- The advertisement includes lease and sale offers in the same advertisement without making a clear and conspicuous distinction as to which terms apply to the sale and which apply to the lease;

(d) Invoice advertising -- The advertisement represents that motor vehicles are offered for sale at a price that is compared in any manner to the dealer's "cost" or terms of essentially identical import unless the advertisement:

(A) Exclusively uses the term "invoice" or "invoice price"; and

(B) Complies with the following:

(i) The invoice price shall be the final price listed on the manufacturer's invoice after subtracting any amount identified on the invoice as being held back for the dealer's account, and after subtracting any advertising fees or manufacturer to dealer rebates or incentives;

(ii) Purchasers shall be able to purchase any vehicle described by the advertisement at the offering price;

(iii) The invoice shall be readily available for inspection by prospective customers;

(iv) The advertisement clearly and conspicuously states that the invoice price for the sale of the vehicle is the dealer's actual cost after subtracting all holdbacks, incentives, manufacturer to dealer rebates, advertising incentives, promotional fees or any other consideration which will be paid by the manufacturer to the dealer;

(v) A manufacturer to consumer rebate is not included in the formula to arrive at the "invoice price." Consumers are entitled to any such rebate in addition to any savings advertised with the "invoice price" offer; and

(vi) The vehicles being so advertised have not had aftermarket items, including, but not limited to, additional goods, accessories, services, products or insurance added to them at a price higher than the dealer's actual cost.

OFFICIAL COMMENTARY: This rule mandates the use of the word "invoice" or "invoice price" when any advertisement is compared to a dealer's cost. The rule makes it clear that all holdbacks and other funds the dealer will get from the manufacturer must be subtracted from the offering price. The rule does not require the vehicle be sold for the invoice price, but only that the invoice price be the reference price used as a starting point. For example, it is lawful to state a certain model of car is for sale at $500 over invoice price, as long as the referenced adjusted invoice price is after all of the appropriate subtractions. Also, manufacturer to consumer rebates belong to the consumer and the consumer is entitled to those rebates in addition to the advertised "invoice price." This rule does not require the dealer to subtract promotional and sales incentives that are not known to the dealer at the time of the advertisement or listed on the invoice, such as volume sales incentives or special promotional manufacturer to dealer incentives and incentives that are calculated based upon special criteria. A dealer or broker may not, however, offer a vehicle for sale referenced to the invoice price and simply pack the price of the vehicle by adding aftermarket items not sold at true invoice price. This practice would simply add back profit on the vehicle and the consumer's cost would not be the invoice price. A vehicle advertised at invoice must be sold at invoice.

(e) Buy-Down Rates -- The advertisement represents that financing is available for the purchase of motor vehicles at a buy-down rate unless the advertisement includes a clear and conspicuous disclosure that the interest rate is not sponsored by the manufacturer, if such is the case, the amount of the buy-down is reflected in the Federal Truth in Lending Statement, and the advertisement clearly and conspicuously states that "the cost of the buy-down may increase the price of the vehicle." If the buy-down will increase the cost of the vehicle, the dealer shall offer the consumer the option of purchasing the vehicle without the buy-down rate at the offering price less the cost of the buy-down. If any specific terms must be met in order to qualify for the advertised buy-down rate, they shall be clearly and conspicuously disclosed. Examples are large down payments, only available to the highest credit ratings, hidden finance charges, unusual terms of the loan or higher selling prices;

(f) Clear and Conspicuous/Complete Offer -- The advertisement:

(A) Fails to incorporate a material statement or fails to use any disclosure or disclaimer which is required by law or by these rules, or without which the advertisement would be false, incomplete, inaccurate, deceptive or misleading;

(B) Fails to incorporate a material statement or uses any disclosure or disclaimer which is not presented in a clear and conspicuous manner;

(C) Uses one or more footnotes or asterisks which, alone or in combination, confuse, contradict, materially modify or unreasonably limit the material terms or availability of any advertised statement; or

(D) Uses images, words, phrases, initials, abbreviations or any other items which are not clear and conspicuous.

OFFICIAL COMMENTARY: An advertiser must review any advertisement before publication to ensure it is truthful and "clear and conspicuous." Advertisers are not allowed to fabricate information or use false, misleading or unsubstantiated representations in advertisements. It is important that advertisers understand that in order for material information to be "clear and conspicuous," it must be in close proximity to the information it defines or clarifies and not in an obscure location of the advertisement.

When an advertisement is presented in a visual format, disclosures must be large enough to be read by the average person viewing the advertisement. The size and type of media used will dictate the required size of a disclosure. The definition of clear and conspicuous, in OAR 137-020-0020, details the requirements for television, radio, print and internet disclosures. Other visual media, including, but not limited to, billboards, hand-held posters or handbills, must also comply with the same standards as other visual media. Each advertisement shall be evaluated for its overall impression. The public should not have to weigh each word, hunt for the hidden meaning of each statement, or search for inconspicuous disclaimers. Advertisers shall not advertise by placing important disclosures in small print, inconspicuously buried at the bottom of the advertisement, or speaking so fast or softly that an average person cannot understand what is being said.

An advertisement shall not contain material that is not commonly understood by an average person who is not involved in the motor vehicle industry. An asterisk may be used to give additional or qualifying information about a word or term. Asterisks or other reference symbols, however, may not be used as a means of contradicting, disclaiming or substantially changing the meaning of any advertised statements. Multiple asterisks must be clearly explained and the information for each must be separated from other referenced disclosures. Use of multiple reference symbols which combine all information together in one paragraph at the bottom of an advertisement in small print is not clear and conspicuous.

(g) Bait and Switch Rules -- An advertisement offers vehicles for sale or lease, vehicles at a specific or discounted price, or specific interest rates or finance terms when such assertions are deceptive, false, misleading or not sincere good faith offers, including, but not limited to, the following:

(A) Statements or illustrations used in any advertisement which create a false impression of the grade, quality, year of model, size, usability, origin, price, interest rate, down payment, monthly payment, make, value or model of the product offered, or which misrepresent the product, interest rate or terms of sale or lease in such a manner that later, on disclosure of the true facts, the purchaser may be switched from the advertised vehicle to another vehicle or to a higher interest rate or different finance offer (See 16 CFR ¦ 238, FTC Guides Against Bait Advertising);

(B) Except as otherwise allowed by subsection (2)(j) of this rule, advertising a motor vehicle for sale or lease when it is not in the possession of the dealer, willingly shown to the consumer or sold at the advertised price and terms. If already sold or leased, the advertiser shall, upon request of a consumer, show proof of the sale or lease of the motor vehicle which was advertised;

(C) Using a headline or major theme in an advertisement to make an offer of a low or special interest rate, down payment or monthly payment which makes it appear that the special offer applies to all or a majority of vehicles offered in the advertisement when it only applies to a limited number of vehicles;

(D) Using discount or loss leader price advertising, unless the advertisement lists, in close proximity in print type no less than half as large as the offering price, the number of vehicles available at the offering price. The listed number of vehicles must be available on the day the offer is advertised at the offered price;

(E) Using a deceptive, false or misleading offer to secure the first contact or interview, even if the true facts are subsequently made known to the consumer;

(F) Using any act or practice to discourage the purchase of the advertised vehicle as part of a scheme to sell another vehicle;

(G) Using any act or practice as part of a scheme to raise the interest rate, the down payment or the monthly payment to one higher than advertised;

(H) Advertising limited availability of vehicles, such as "only 1 at this price," in order to induce consumers into a dealership when the dealership has other similar vehicles available for sale at the same price or for the same terms;

(I) Offering finance terms, including, but not limited to, low down payments, low monthly payments or low interest rates or finance terms, which the advertiser cannot provide, does not intend to provide, does not want to provide, or which the advertiser knows or should know are not available or cannot be provided as advertised. The purpose of the offer is to switch borrowers from the advertised finance offer to other finance terms, usually at a higher interest rate or on a basis more advantageous to the person making the offer;

(J) Offering a low monthly lease payment based upon a capitalized cost reduction that is so large the advertiser knows or should have known:

(i) It is not a bona fide offer; or

(ii) It is so much more than an average capitalized cost reduction that most consumers would not be expected to make such a large payment for the advertised vehicle.

OFFICIAL COMMENTARY: Bait advertising is an alluring but insincere offer to sell a product or service that the advertiser in truth does not intend or want to sell. It can also be in the form a finance offer, such as low monthly payments, low down payments or low interest rates when the advertiser knows most consumers will not qualify for the finance terms offered. A bait advertisement may also be an offer that does not apply to the majority of vehicles advertised. The purpose is to switch consumers from buying the advertised vehicle, in order to sell another vehicle, usually at a higher price. It may also be designed to have the consumer agree to finance terms different from the terms advertised on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying a vehicle of the type so advertised or in securing financing at terms that are not available to the market group to which the advertisement is directed.

(h) Limited Offers of Vehicles, Discounts or Financing -- The offering price or an offer to lease, a rebate, a discount offer or a special finance offer applies to a specific vehicle, or to a specific or limited number of vehicles of a specific model or type, unless:

(A) The exact number of vehicles available for which the offer is being made and the specific models to which the offer applies are clearly and conspicuously disclosed in type no less than half the size of the type used for the offer;

(B) Each vehicle is clearly and conspicuously identified in the advertisement by its vehicle identification number if there are less than six such vehicles advertised; and

(C) Any advertised vehicle is available for sale on the day it is advertised.

OFFICIAL COMMENTARY: This rule is triggered only when there are a "limited" number of vehicles to which the offer applies. If the offer applies to an unlimited number of vehicles advertised, all the additional identifying information outlined in the rule is not required. If there are a limited number of vehicles to which the offer applies, the advertisement must clearly state any limitations. "Up to" savings claims which fail to disclose the specific number and identification of the vehicles to which the discount applies would violate this rule. This rule should be read in conjunction with the Bait and Switch Rule.

(i) Offer Limited to Only Eligible Consumers -- An offer, including, but not limited to, one for special finance or payment terms, rebates or any other special offer made in an advertisement, applies to a specific or limited number of consumers, unless the following information is clearly and conspicuously disclosed:

(A) The exact model vehicles for which the offer is being made; and

(B) All limitations and conditions of eligibility for the offer, including, but not limited to, the minimum credit score upon which the offer is based, are clearly and conspicuously disclosed.

OFFICIAL COMMENTARY: This rule is triggered when there are a "limited" number of consumers to whom an offer applies. If there are a limited number of consumers to whom the offer applies, the advertisement must clearly disclose any limitations. If the offer is only available to consumers with a particular credit score, then the advertisement must clearly and conspicuously disclose the required minimum credit score. It is important to remember that to be clear and conspicuous requires the disclosure be in close proximity to the offer.

(j) Vehicles Not Immediately Available -- The advertisement uses terms which state or imply that motor vehicles are in stock or otherwise available for immediate delivery when they are not. If a motor vehicle is not available for immediate delivery, the advertisement must clearly and conspicuously state the vehicle's availability such as it is in transit, on order, or obtainable only by special order or dealer trade, and that it is not in stock;

(k) Used Vehicle Offers -- The advertisement is for a used vehicle, which was manufactured less than four years prior to the date of the advertisement, without designating the vehicle as "used." Other descriptive terms may be substituted for the term used, but not so as to create ambiguity as to whether the vehicle is new or used. Used vehicles, such as "dealer demos" or late model vehicles, cannot be displayed in an advertisement with new vehicles in such a manner that it is difficult to determine if they are used or new;

OFFICIAL COMMENTARY: Examples of alternative terms include "lease return," "pre-owned," "dealer demonstrator" or "rental return."

(L) Program and Certified Vehicles -- The advertisement uses the word "program," "certified" or terms of essentially similar import, unless the advertisement clearly and conspicuously discloses the nature and benefits of the "program" or "certification" that is offered with the motor vehicle and the origin and prior use of the vehicle. If there is an additional cost to the consumer to obtain the program or certification, that cost must be clearly and conspicuously disclosed in the advertisement and it must be listed on any purchase or lease agreement;

OFFICIAL COMMENTARY: Dealers and advertisers have used the words "program" and "certified" to designate a wide variety of late model used vehicles. This rule prohibits use of the terms unless there is a verifiable benefit which attaches with the program or certification. The only time these words may be used are if the manufacturer or dealer actually has a special program that attaches to the sale of the used vehicle, such as a complete inspection for defects, repair of the defects that are discovered, and/or an additional warranty that is more extensive than the vehicle would otherwise have without the program. If any program or certification is used in an advertisement, the advertisement must clearly and conspicuously disclose the terms and cost, if any, of the program or certification, if that amount is not already included in the advertised offering price.

(m) Non-negotiable Offers -- The advertisement offers or the dealer posts on any vehicle or uses any words which imply that the offering price of the vehicle is non-negotiable or that no negotiations are necessary unless in fact the dealer:

(A) Does not negotiate the offering price of the advertised vehicles;

(B) Maintains the same price for all consumers for equivalent vehicles;

(C) Maintains such price unless a general price adjustment is made which is applicable to all consumers;

(D) Posts the non-negotiable price on all such vehicles; and

(E) Does not falsely inflate the value of any trade-in vehicle by such an amount that the claim that it is a non-negotiable transaction is a sham.

OFFICIAL COMMENTARY: Dealers who engage in any advertisement that claims that the offering price is not negotiable, that the advertised price is so low that it is unnecessary to negotiate, or terms of similar import may not negotiate the offering price of the vehicle once the car has been offered at a price with such a claim. The non-negotiable price must be clearly posted on all such vehicles. The dealer may not alter the vehicle price offered in a particular transaction. Altering a vehicle price includes "reappraising" a trade-in vehicle, changing the terms of sale, or changing vehicle features or options where the effect is to alter the net offered price. The majority of trade-ins today have negative equity. If a dealer does not truthfully list the negative equity on the transaction documents, falsely inflates the trade-in value or adds the negative equity to the purchase price, the dealer will violate not only this rule, but Regulation Z and OAR 137-020-0040.

(n) Limited Offers -- The advertisement offers any vehicle without disclosing material limitations of the terms listed in the offer, including, but not limited to, the length of time that the offering price is in effect. Advertisements which do not list any effective dates will be presumed to offer advertised vehicles at the "advertised price" until such time as the vehicles are subsequently advertised at different terms or for a period of 30 days, whichever comes sooner;

(o) Identification as a dealer -- The advertisement, including, but not limited to, those on the internet, offers any vehicle for sale and does not prominently identify the dealer or broker by the complete business name that the dealer or broker uses in the normal course of its business. When the advertisement is a classified line advertisement, the dealer or broker may use the word "dealer" or abbreviation "DLR." The dealer or broker must also display its business name prominently at any off-site sale location. In the case of an internet advertisement, the advertisement must state the full name of the dealer, the dealer's address, telephone number and Oregon dealer license number. If the internet advertisement is an online auction or small classified line advertisement with limited space, a hyperlink or web address which leads to all dealer information may be used. This rule does not apply to dealers providing vehicles for display purposes only under ORS 822.040(4), but only if the dealer complies with ORS 822.040(4) and all rules promulgated pursuant to that statute;

OFFICIAL COMMENTARY: In any advertisement, the complete business name of the dealer or broker must be clearly and conspicuously displayed. It should be noted that this rule applies even in the case of special event or off-site sales, such as mall sales or sales conducted using the name of another prominent business at that business' location. The dealer or broker must always display its commonly used business name prominently in any advertisement or at any off-site sale. Creation and use of an assumed business name that is not used in the normal course of business is misleading as to what entity is actually offering the vehicles. Some dealers have used their corporate business name or the name of a mall or large retail store in order to make consumers believe that some different company is conducting the sale. Other dealers have published advertisements that list the name of their advertising agent so that it appears the agent and not the dealer is conducting the sales event; for example: "For 3 days only XYZ Event Promotions will be in Salem to sell these 200 vehicles." Purchasers have an absolute right to know the dealership with which they are doing business and who is actually conducting the sale. If more than one dealership is involved, all dealerships participating in the event must be named. If an advertisement is by a new vehicle regional dealer group, only the name of the regional group need be identified, not the individual names of all the dealers in the group.

(p) Reference Pricing -- The advertisement claims, implies or could cause a reasonable consumer to believe that:

(A) A vehicle is reduced in price from the dealer's former price, or that the price is a percentage or dollar amount of savings from the dealer's former price, or words to that effect, unless the dealer actually advertised or has records to substantiate that the vehicle has been offered for sale at the former price, for no less than 10 days in the prior 30 days; and

(i) For new vehicles, the advertisement lists the MSRP; or

(ii) For used vehicles, the advertisement lists the Kelley Blue Book or NADA Used Car Guide based upon the year, mileage, condition and accessories of the vehicle advertised. The advertisement must specify if it is referencing a retail or wholesale guide; or

(B) A dealer is conducting a sales promotion or marketing event at which prices have been reduced, when in fact prices have not been reduced.

OFFICIAL COMMENTARY: Unlawful reference price advertising is a variation on "bait" advertising, using a multitude of supposed reductions or special offers for a unique sales event or implying special price reductions, when in fact the vehicles are offered at prices that are not reduced from normal sale prices.

(q) Used Car Reference to New MSRP -- A used vehicle advertisement references the original MSRP of the vehicle when it was new in comparison to its present sales price;

OFFICIAL COMMENTARY: An average motor vehicle depreciates in value from the day it is purchased. Its fair market value is based upon many factors: wear and tear, mileage, availability of like vehicles and other market conditions. The MSRP is a term of art specifically authorized for use in the sale of new cars. There are too many variables in used vehicles that make any comparison to its original MSRP meaningless and deceptive. A reference may be made to any of the professional used car pricing guides, but then only if the advertisement clearly and conspicuously discloses if the guide is a "retail" or "wholesale" guide. If an offering price is advertised using a guide, it must be calculated based upon all applicable additions and subtractions listed in the guide. This rule does not make it unlawful to give a consumer access to original MSRP information about a vehicle, such as using a hyperlink on an internet advertisement. It is meant to stop reference pricing the sale price to the MSRP as a comparison to show savings.

(r) Comparison Price Advertising -- The advertisement explicitly or implicitly claims that the dealer's offering price is lower than another dealer or dealers', unless the dealer can clearly show, through verifiable statistical analysis of other prices in the target market and records of the dealership, that such is the case;

(s) Adjustable Interest -- The advertisement offers an interest rate that is adjustable without clearly and conspicuously disclosing that the interest rate is adjustable;

(t) Price Reduction Advertising -- The advertisement states the offering price of a new vehicle as discounted or in any way reduced by a specified amount below the MSRP or the dealer's sale price unless the MSRP, the amount of any discount, rebate, or other price reduction and the final offering price are clearly and conspicuously displayed in figures. Each figure shall be labeled with a clear and conspicuous description;

OFFICIAL COMMENTARY: The clearest way to comply with this rule is to post this information in the form of a mathematical type equation.

(u) Range of Prices Advertising -- The advertisement states that any vehicles are available for sale at a range of prices, a range of percentage or fractional discounts, a specific down payment or a specific monthly payment using the words "as low as" or "starting at" or words to that effect, unless:

(A) The advertisement clearly and conspicuously states the number of vehicles available at the lowest offered term in type no less than half the size of the type used for the offer;

(B) Each vehicle, to which the offer is applicable, is clearly and conspicuously identified in the advertisement by make, model, year of manufacture and its vehicle identification number, if less than 25% of the vehicles advertised are eligible for the lowest offer. This subsection is not applicable to advertisements published by a motor vehicle manufacturer;

(C) The highest price or lowest discount in the range is clearly and conspicuously disclosed in the advertisement in the same type size;

(D) The offer is not a major theme or headline in the advertisement, except for when a majority of the vehicles advertised are eligible for the offer; and

(E) The financing criteria are clearly and conspicuously disclosed, if a consumer must meet certain minimum credit criteria to qualify for the offer.

(v) Limited Rebate Offers -- An advertised offering price includes any rebates or reductions, unless such rebates and reductions are available to every purchaser or member of the general public without exception. Rebates or reductions which are not available to every purchaser or member of the general public, such as "commercial rebate," "college graduate rebate," "loyalty rebate," "financing company rebate," or "first time buyer's rebate," may be listed in the advertisement, but may not be subtracted from the price so as to reduce the offering price. The offering price, which is available to every purchaser or member of the general public, must be prominently displayed in type which is greater than any other reduced offering price listed in the advertisement that is not available to the general public;

OFFICIAL COMMENTARY: Manufacturers and financial organizations offer discounts or rebates to limited groups of purchasers for a variety of reasons. The rule prohibits the subtraction of those amounts from the offering price of the vehicle, unless every person in the public is eligible for the discount or rebate. The advertisement can list an offering price with these special reductions, but only in addition to and in smaller print type than the offering price that is available to everyone.

(w) Factory Sales -- The advertisement uses the terms "factory or manufacturer authorized sale," "factory discount outlet," or similar terms indicating that the dealer has been granted special pricing or distribution privileges by a motor vehicle manufacturer, unless the dealer is specifically authorized to do so by the motor vehicle manufacturer. The dealer using such an offer must have written substantiation before publishing such an advertisement;

(x) Misleading Reasons for Sale -- An advertised sale is one being conducted in a dealer or broker's normal course of business and a person uses terms or illustrations in the advertisement which are false or have the capacity or tendency to deceive or mislead consumers as to the nature of or reason for the sale, including, but not limited to, using:

(A) The terms "liquidator," "auction sale," "liquidation sale," "urgent," "disposal sale," "total inventory reduction sale," "close out," "final clearance," "bank asset sale," "repossession sale," "disposal sale," "reprocessed vehicle sale," "authorized distribution center," "factory authorized sale" or any similar terms;

(B) The term "public notice" or similar terms when used in such a manner that it appears to be a publication of any type of legal notice, court notice or government notice; or

(C) Any terms which imply the sale is an event of urgent status or the vehicles have unique qualities or benefits or were specially obtained inventory.

OFFICIAL COMMENTARY: Emergency or distress sales, including, but not limited to, bankruptcy, inventory reduction, liquidation and going out of business sales, or any other specific reason for a sale shall not be advertised unless the stated or implied reason is true. "Selling out," "closing out sale," and similar terms shall not be used unless the business publishing the advertisement is actually going out of business. The term "liquidation sale" means that the advertiser's business or inventory is in the process of being liquidated prior to actual closing. Using a business name or advertising agent that incorporates the term "liquidator," or term of similar import, in its business name in conjunction with the sale of motor vehicles has the tendency to mislead consumers as to the nature of the sale and is deceptive, unless the dealer is actually going out of business. When a dealer purchases a vehicle for its inventory, the source of its purchase does not superimpose any special benefit or pricing status upon the vehicle. The fact that the vehicle was previously a lease or rental return, sold at auction or repossessed by a lender does not allow the dealer to falsely imply that the consumer will get a better price on the vehicle because of its prior stature. It is simply a vehicle being sold in the dealer's normal course of business. A new motor vehicle dealer may use the terms such as "close-out" or "final clearance" for the sale of inventory that is no longer being manufactured or for year-end vehicles that are not going to be restocked by the manufacturer. Words may not be used that have the tendency to deceive or confuse a consumer as to the exact nature of the sale of the vehicles. This rule does not prohibit offers of special sales events held in conjunction with a specific financial organization, such as a local credit union.

(y) Misrepresenting Down Payment -- Any down payment required for the vehicle transaction is referred to in an advertisement as a "transfer fee," "reassignment fee," "assumption fee" or any other words of similar import that do not clearly specify that the amount referenced is in fact a down payment; or the monthly payment is referred to by any other term that is not commonly used to describe a monthly payment;

OFFICIAL COMMENTARY: The terms "down payment" and "monthly payment" are normal terms understood by the average consumer. Advertisements which refer to these terms by use of a term that is not commonly understood to mean the same can confuse and deceive the average consumer as to the actual nature of the payment and the type of offer. It is deceptive to use alternate terms which imply the consumer is assuming a pre-existing loan or "taking over payments" from some other obligee.

(z) Deceptive Format or Layout -- The advertisement uses any format, layout, headline, assertion, illustration or type size which has a tendency to mislead or deceive its intended audience regarding the prices, finance terms, availability or applicability of any offer made in the advertisement;

OFFICIAL COMMENTARY: Some advertisements incorporate large amounts of information that, if taken individually, might communicate valid information regarding the offering of a vehicle. When combined, however, the combination of inconsistent information makes it difficult to determine what information is applicable to any other information or vehicles. Some advertisements create a false sense of urgency or simply confuse the viewer. Other advertisements contain multiple offers that are not available in combination or are inconsistent with each other. The composition and layout of advertisements should minimize the possibility of misunderstanding by the reader. Prices, illustrations, or descriptions should be displayed in an advertisement in such a manner that it is clear to which vehicles they apply. It is misleading to use a prominent theme or headline in an advertisement when that offer applies to only one or a limited number of vehicles and the offer is not applicable to the majority of the vehicles included in the sale.

This rule follows the Federal Trade Commission's policy statement on deception which was succinctly stated by the Third Circuit. "The tendency of the advertising to deceive must be judged by viewing it as a whole, without emphasizing isolated words or phrases apart from their context." Beneficial Corp. v. FTC, 542 F2d 611, 617 (3d Cir 1976), cert denied, 430 US 983 (1977). "Depending on the circumstances, accurate information in the text may not remedy a false headline because reasonable consumers may glance only at the headline. Written disclosures or fine print may be insufficient to correct a misleading representation. Other practices of the company may direct consumers' attention away from the qualifying disclosures. Oral statements, label disclosures or point-of-sale material will not necessarily correct a deceptive representation or omission. Thus, when the first contact between a seller and a buyer occurs through a deceptive practice, the law may be violated even if the truth is subsequently made known to the purchaser. Pro forma statements or disclaimers may not cure otherwise deceptive messages or practices." FTC Policy Statement on Deception, appended to Cliffdale Associates, Inc., 103 FTC 110, 174 (1984).

(aa) False or Misleading Statements -- The advertiser or advertising agent makes any representation or statement of fact in an advertisement if the advertiser or advertising agent knows or should know that the representation or statement is false, confusing or misleading or the advertiser or advertising agent does not have sufficient information upon which to base a reasonable belief in the truth of the representation;

OFFICIAL COMMENTARY: Statements made in an advertisement must be true and specifically applicable to the sale or offer being made in the advertisement. An example of a violation of this rule is an advertisement that stated, "National Rental Car Company Files Bankruptcy - Liquidation Companies Across the County Move to Eliminate Inventory." While some rental car company may once have filed bankruptcy, the dealerships and advertising agent which published this advertisement had no vehicles from the rental car company to sell. Further, no liquidation companies were liquidating vehicles from a rental car company and none were in any dealers' inventories. An advertisement may not be false, manipulate the truth or use language that does not correctly describe the nature of the sale, or the source of ownership of the vehicles for sale. Superlative advertising claims are objective (factual) or subjective (puffery):

Objective claims relate to tangible qualities and performance values of a product or service which can be measured against accepted standards or tests. As statements of fact, such claims can be proved or disproved and the advertiser should possess substantiation; and

Subjective claims are expressions of opinion or personal evaluation of the intangible qualities of a product or service. Individual opinions, statements of corporate pride and promises may sometimes be considered puffery and not subject to a test of their truth and accuracy. Subjective superlatives which tend to mislead should be avoided and can be violations of this rule.

Particular care is needed with superlative claims. Measurable criteria, e.g., "the cheapest," must be confirmed. As particular factual claims, superlatives must be placed directly alongside the area where supremacy is claimed and proven. General superiority claims like "the best" may only be used in clear puffery, and not on the basis of selective comparisons. The repeated insistence of superlatives within a script might in itself amount to a claim of supremacy which would need to be verified. Qualitative claims of superiority (e.g., "we simply sell for less") which are open to challenge and/or which are impossible to measure conclusively should be avoided, except for appropriate mentions in a way which allows that rival brands may also make the same claim (e.g., "we simply try to sell for less").

(bb) Zero Down Advertisements -- The advertisement uses the phrase "zero down ($0 down)," "no money down," "a penny down" or words of similar meaning, when a down payment of any kind is, in fact, required, including, but not limited to:

(A) The consumer must use the vehicle's rebate as the down payment;

(B) The consumer must use the equity from the consumer's trade-in as a down payment; or

(C) The consumer must pay a security deposit, first month's payment, acquisition fee or any other amount, other than taxes, license and registration costs or a Dealer Title and Registration Document Preparation Service Fee which are clearly and conspicuously disclosed in the advertisement, at the inception of the transaction.

OFFICIAL COMMENTARY: If a down payment or fee of any amount is required at the time of the transaction it is not a "no money down" offer. This is especially a problem in lease advertising where it is common to require the first month's payment, a security deposit, and an acquisition fee at lease inception. If any government fees are required to be paid at the time of sale or lease, including, but not limited to, title or registration fees, this information must be clearly and conspicuously disclosed in the advertisement.

(cc) Rebate Offers -- The advertisement offers the availability of a manufacturer's, lender's or other third party's rebate unless such advertisement clearly and conspicuously discloses:

(A) The amount of any applicable rebate;

(B) Any conditions, restrictions or limitations placed on the rebate; and

(C) To which model the rebate applies. If multiple rebates are applicable in the same advertisement, the models that each respective rebate applies to must be identified;

(dd) Withdrawal of Advertisement -- An advertisement for the sale or lease of a specific motor vehicle is not withdrawn or the words "sold" superimposed over the advertisement as fast as technologically and reasonably possible, based upon the media used for the advertisement and the frequency of publication, after the motor vehicle is sold or is no longer available for sale or lease to the general public;

OFFICIAL COMMENTARY: Dealers, advertisers and advertising agents have the responsibility to monitor their advertisements and ensure that after a vehicle is sold or leased, or otherwise no longer available to the public, any advertisement for the vehicle is removed from the media in which it is published, including, but not limited to, television, radio, newspapers or the internet. This has become a particularly egregious problem on the internet because of the transmission of advertisements to different websites through a central internet advertising distributor. This rule makes it clear that the obligation to ensure timely removal of advertisements for vehicles which are sold or no longer available is upon all parties involved with its publication. If an internet vehicle advertising company, an advertising agent or any other publisher has received notice from a dealer that a vehicle is sold or no longer available, it must remove the advertisement or superimpose the words "sold" over the advertisement as fast as possible based upon the type of media in which the advertisement is placed and the frequency of its publication.

(ee) Sale Offer May Not be Reduced by Down Payment -- The advertised offering price or monthly payment for the sale of a motor vehicle is calculated by reducing the offering price by the amount of a down payment, minimum trade-in amount, deposit or other payment to be made by the purchaser;

OFFICIAL COMMENTARY: A monthly payment or offering price displayed in an advertisement for the sale of a motor vehicle cannot be calculated using a formula that includes any reduction that the purchaser must pay towards the offering price of the vehicle in order to arrive at some lower monthly payment or offering price. This deceptive practice is used in sales advertisements to make it appear that a vehicle has an extremely low monthly payment or an offering price that is less than the true price of the vehicle. The actual terms of the offer are usually in fine print, which disclose that a down payment or minimum trade-in value is required. For example, a headline of "$79 a month" as an enticement in an advertisement for a $10,000 car, which was calculated by using a required down payment of $5,000 is deceptive and a classic unlawful "bait" technique. Any amount of manufacturer's rebates that are deducted to arrive at the offering price shall not be considered as "made by the purchaser" for the purpose of this rule. This rule does not prohibit the listing of a minimum down payment that may be required by a financial organization to accept a finance offer or for any other valid purpose; however, it is unlawful to prominently display a monthly payment that was calculated using a down payment reduction so as to make the monthly payment appear lower than if calculated based upon the full offering price. It is also unlawful to display an offering price based upon the subtraction of a down payment. This rule should be read in conjunction with OAR 137-020-0020(2)(v) and (3)(c) regarding what fees are allowed to be excluded from any offering price.

(ff) Price Matching Offers -- The advertisement uses terms "we will meet your best offer" or "we won't be undersold," or terms of similar import which suggest that a dealer will beat or match a competitor's price unless:

(A) The advertisement clearly and conspicuously discloses the price matching policy and any limitations; and

(B) Such policy does not require the presentation of any evidence which places an unreasonable burden on the consumer.

OFFICIAL COMMENTARY: Dealers may not encourage consumers to make and break contracts in an attempt to offer them a price lower than the price which they already negotiated with another dealer. A dealer may always offer to beat another advertised price, but to require a written quote from another dealer puts a consumer in the position of entering and breaking a valid contract in order to get a lower price. Requiring a consumer to present a purchase order, sales documents or other written proof of an offer from another dealer is an unreasonable burden on the consumer.

(gg) False Credit Advertisements -- The advertisement makes a false or misleading offer of credit or makes any false or misleading statement in connection with an offer of credit, including, but not limited to:

(A) Failing to clearly and conspicuously disclose all material limitations or conditions of the offer of credit;

(B) Stating that "no credit application is refused," "no credit application rejected," "all credit applications are accepted," "we finance anyone," or words of similar import, unless the offeror can substantiate that all credit applications received by the offeror have been approved for credit; or

(C) Stating that a consumer is "approved" or "pre-approved" for an offer of credit, or words of similar import, if:

(i) The offer of credit is qualified by conditions other than the specific criteria used in making a firm offer of credit pursuant to the Fair Credit Reporting Act or otherwise allowed by FCRA;

(ii) The offer is not a "firm offer of credit" made pursuant to FCRA; or

(iii) The offer made is false.

OFFICIAL COMMENTARY: An advertisement for an offer of credit must be truthful and state all facts accurately. This rule is not intended to limit, reduce, modify or effect the FCRA, but to identify unfair or deceptive acts or practices under the Oregon Unlawful Trade Practices Act. FCRA permits a financial organization to obtain a consumer's confidential credit information from a credit reporting agency for the purpose of making a firm offer of credit. The offer may be qualified by the consumer's present credit status after the offer is made to a consumer and several other exemptions listed in FCRA (See 15 USC ¦ 1681a). Some examples of violations of this rule include, but are not limited to, the following:

(a) A false offer which appears bona fide, but in fact is a subterfuge to get consumers into a dealership. This would be the case if financing was not actually offered or available by the stated lender listed in the advertisement or the dealership or advertising agent never intended to use the stated lender to finance any of the vehicle transactions during the advertised promotion. It is not only a clear violation of FCRA to obtain consumer information from a credit reporting company to get names for a mailing list without making a valid "firm offer of credit," but could also be a violation of this rule if it was a false offer of credit by a dealer or advertising agent;

(b) A false offer that states consumers are qualified for a loan of $30,000 when in fact the offeror knew the credit scores used to obtain the names of consumers would only qualify for loans of a lesser amount. When a valid "firm offer of credit" is made to a varied group of consumers with different credit scores, the offeror should separate its mailers and only list the amount available to the consumer receiving the offer;

(c) An offer of credit is made, but a large list of conditions which allow the withdrawal of the offer are buried at the bottom or back of the advertisement in small or illegible print;

(d) An offer of credit is made claiming that consumers are approved or pre-approved for credit when the offeror did not obtain credit scores or the offeror has no basis upon which to claim a consumer will be approved for credit; and

(e) A false advertisement that uses language implying all consumers are able to receive credit when not all will be approved.

(hh) Alternative Offer Limitations -- An advertisement offers the sale or lease of a motor vehicle with either a special finance rate or a manufacturer's rebate and fails to clearly and conspicuously disclose that the consumer is only entitled to receive one or the other and not both;

OFFICIAL COMMENTARY: It is common for a manufacturer to offer a special low finance rate or a rebate on a vehicle at the same time; however, the consumer must make a choice of one or the other. Advertisements must clearly and conspicuously state, when such a situation exists, that the consumer may only receive one or the other.

(ii) Misleading Use of Illustrations -- An advertisement uses inaccurate photographs, descriptions or illustrations when describing specific automobiles. However, an advertiser may use stock illustrations or photos which are substantially similar when an exact match is not available;

OFFICIAL COMMENTARY: Examples of improper advertisements include advertising a fully-loaded motor vehicle when the advertisement actually refers to a minimally-equipped motor vehicle in the text and a photograph of a four door pickup truck when the advertisement refers to an extended cab truck. Use of a deceptive illustration is not legitimized by stating in the advertisement "photo for illustration purposes only" or similar language.

(jj) False Advertising -- The advertisement is a false advertisement;

(kk) Misleading Initial Term Offers -- The advertisement offers adjustable terms of payment with no payments or low payments in the beginning of a loan or lease, which then increase after a term of months unless:

(A) The offer is by a manufacturer or financial organization as part of a specific loan or lease offer and no rebates, incentives or other funds that the consumer is entitled to receive are used to fund the reduction; or

(B) The offer is made by any person using rebates, incentives or other funds that the consumer is entitled to receive to fund the reduction and the advertisement clearly and conspicuously discloses that the offer is available only by using rebates, incentives or other funds that the consumer is entitled to receive and the use of the rebates, incentives or other funds as a down payment may be more financially beneficial to the consumer over the term of the loan or lease.

OFFICIAL COMMENTARY: It is deceptive and misleading for an advertisement to make it appear that a consumer is getting special low payments or no payments for the beginning term of a loan or lease without disclosing to the consumer how that reduction is accomplished, when in fact the person simply applied a manufacturer's rebate or incentive, which the consumer is entitled to receive, to achieve the lower payments. The consumer is actually making or reducing the payments for the initial period with his/her own funds, which could have been used to reduce the balance owed, thereby reducing the total cost of the loan to the consumer over its term, or simply taken by the consumer as cash. If the rebate was used to reduce the principal balance, the total amount paid for the vehicle over the course of the loan could be thousands of dollars less.

(LL) Broker Fiduciary Obligation -- Any person advertises as, holds themselves out as, or engages in the conduct of a broker and fails to act in a fiduciary capacity for the consumer;

OFFICIAL COMMENTARY: Some consumers do not want to personally be involved in negotiating and arranging the purchase or lease of their own of motor vehicle and employ the services of a motor vehicle broker to perform this function for them. In other instances, a dealer, who does not have a particular vehicle sought by a consumer, becomes a broker by negotiating the purchase or lease of a vehicle for a consumer from another dealer. Oregon law allows a fee to the broker for its services and requires that a broker act only as an agent for the consumer; ORS 822.047. The Oregon Unlawful Trade Practices Act makes it unlawful for a person to make false or misleading representations of fact concerning: the offering price of, or the consumer's cost for the person's services, 646.608(1)(s); the nature of the transaction, 646.608(1)(k); or the status of their relationship, 646.608(1)(e). A dealer or other person cannot act as or cause a consumer to believe it is a broker, directly or by failing to clarify the relationship, and then act in its own self interest. (See also Official Commentary, OAR 137-020-0020, "Broker.")

(mm) Use of Abbreviations -- An advertisement uses any abbreviation which is deceptive, misleading or not commonly understood by the general public or approved by federal law or state law;

OFFICIAL COMMENTARY: Examples of abbreviations commonly understood: AC, AM/FM, AUTO, AIR, 2DR, CYL, MSRP, DOC, DOC. PREP. FEE, or TITLE/REG. PROCESS FEE; abbreviations not commonly understood: WAC, OAC, PEG.

(nn) Misleading Business Names - Any words are used in a company name or advertisement which would mislead the public either directly or by implication regarding the nature or affiliation of a dealer or broker's business. Use of the term "wholesale" or "wholesaler" shall not be used in a company name affiliated with motor vehicle sales or leases after the effective date of this rule unless the person actually owns and operates a motor vehicle business that only sells vehicles wholesale. Any Oregon dealer or broker that used the term "wholesale" or "wholesaler" in its business name prior to the effective date of this rule may continue to use that word, except it must clearly and conspicuously state in any advertisement or display of its name at its business location words that convey to the public that it is a retail, not wholesale, motor vehicle business. Use of the term "liquidator" shall not be used in a company name to sell or advertise motor vehicles, unless the company is solely in the business of liquidating assets of persons going out of business and in fact the sale is a going out of business sale;

OFFICIAL COMMENTARY: This rule ensures that words are not incorporated into a business name that would tend to mislead a consumer as to the affiliation or nature of a business, the source of its goods or the type of business being conducted. Examples, other than wholesale, include: "factory" or "manufacturer," which should not be used in a company name, unless the advertiser actually owns and operates or directly and absolutely controls the manufacturing facility that produces the advertised products.

Incorporating in the dealer's name any term or designation which has a tendency to mislead others as to the true nature of the business, such as the use of "wholesale," when a dealer's business is substantially retail, or "discount" when the price and policy of a dealer does not provide substantial discounts.

(oo) Negative Equity Trade-in Disclosure -- The advertisement offers to "pay off" any motor vehicle taken in trade, or words of similar import, unless the advertiser will actually pay off the outstanding debt, without including the cost as negative equity as part of the new transaction. If the advertisement makes any statements regarding accepting any vehicle in trade for the purchase or lease of another vehicle, the following disclaimer must be used:

"NOTICE: Trading in a vehicle will not eliminate your debt. Negative equity will be added to any purchase or lease."

OFFICIAL COMMENTARY: If a consumer owes $2,000 on his/her car, but its actual cash trade-in value is only $1,500, that person has $500 of negative equity that will be added to the purchase price or capitalized cost of a lease agreement. An advertisement that offers to "pay off" the balance on a trade-in can easily mislead a consumer to believe that the dealer is going to "pay off" the negative equity as well.

(3) Lease Advertisements: It is unfair or deceptive in trade or commerce for a person to advertise the lease of any motor vehicle unless the following information is clearly and conspicuously disclosed:

(a) Except for the name and model of the vehicle advertised, the following information shall be displayed most prominently and in the largest type in the advertisement for the lease:

(A) The monthly lease payment and the amount due at inception by the consumer (not including any rebate used to reduce the capitalized cost) in the same size font; and

(B) The term of the lease and that the offer is for a "lease," displayed, with the amounts listed in paragraph (3)(a)(A) above, in a font no less than half the size of those amounts or the minimum size described to be clear and conspicuous based on the media, as outlined in OAR 137-020-0020(j), whichever is larger.

(b) The MSRP and the capitalized cost if different than the MSRP;

(c) The capitalized cost reduction (either by cash down payment or trade equity), acquisition fee, initial payment, security deposit, Dealer Title and Registration Document Preparation Service Fee, any rebates which reduce the capitalized cost and any other additional costs due at the time of delivery, and the total of those amounts (also known as "amount due at inception");

(d) The total lease charge, which includes:

(A) The total of the monthly payments;

(B) Any lease acquisition fees;

(C) The total of the amounts listed in (3)(c); and

(D) Any required lease disposition or termination fee.

(e) The residual value of the vehicle at the end of the lease term;

(f) Any lease return fee which a consumer must pay if the consumer chooses not to purchase the vehicle at the end of the lease; and

(g) If the advertised monthly lease payment requires the consumer to pay a cash amount or have a trade equity at the inception of the lease of more than 10% (ten percent) of the MSRP, the monthly payment without the deduction of the cash or trade equity and it shall be included in the information which is disclosed under paragraph (3)(a)(A) above.

OFFICIAL COMMENTARY: This rule gives the consumer the basic information (s)he needs to accurately compare the benefits of an offered lease, or to evaluate the benefits between a lease and sale of the same vehicle. It also addresses misleading monthly payment advertisements, which have been calculated using higher than normal consumer down payments or required equity on trade-ins in order to make the monthly payments appear lower.

(4) Used Vehicle Rule: It is unfair or deceptive in trade or commerce to advertise or otherwise represent, sell or lease a vehicle as new if:

(a) The vehicle has been previously spot delivered to a buyer or lessee;

(b) The vehicle has been previously titled or registered;

(c) The vehicle was previously used by any person for its discretionary use; or

(d) The vehicle is a used vehicle.

OFFICIAL COMMENTARY: This section makes it clear that a used vehicle may not be advertised as new. It does not prohibit a dealer or broker from titling a vehicle as a new vehicle that has been previously spot delivered, but not previously titled or registered; or providing new vehicle financing or warranty coverage for a used vehicle, such as a dealer demo, if the vehicle is otherwise still eligible for new vehicle financing or warranty coverage. The consumer must be informed, however, that (s)he is buying or leasing a used vehicle. Also, if a vehicle was erroneously titled or registered by an honest clerical error, the vehicle is still considered a new vehicle.

(5) The Advertised Price Must be the Sales Price: It is unfair or deceptive in trade or commerce for a dealer to sell a vehicle to a consumer for more than an advertised price or fail to disclose the sale price of a vehicle as advertised in any media or advertisement.

OFFICIAL COMMENTARY: In addition to this rule, OAR 137-020-0020(3)(a) requires the use of an extension sticker on any vehicle offered for sale or lease in an advertisement stating the offering price of the motor vehicle listed in the advertisement. A dealer must post any advertised sale price on the window or use a "hang tag" stating the advertised price.

Stat. Auth.: ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u)
Hist.: JD 1-1987, f. 2-5-87, ef. 2-15-87; JD 3-1996, f. 10-18-96, cert. ef. 10-23-96; DOJ 17-2007, f. 12-20-07, cert. ef. 1-2-08

137-020-0100

Plain Language

(1) Definitions: For purposes of this rule:

(a) "Department" is defined as Oregon Department of Justice;

(b) "Consumer Contract" is defined in ORS 180.540(3) and does not include contracts which state agencies other than the Department may review under 180.540(2);

(c) "Reasonable Fees" includes the prevailing billing rate which the Department has established in OAR 137-008-0010.

(2) Application: Any seller or extender of credit may submit a consumer contract to the Department by:

(a) Completing an application for review. The application may be obtained by calling or writing the Financial Fraud Section, 100 Justice Building, Salem, OR 97310, (503) 378-4732;

(b) Including a $250 fee for each contract to be reviewed, and such additional "reasonable fees" as the Department determines is necessary to review the contract;

(c) Submitting three copies of the contract to be reviewed;

(d) Underlining in red any words, phrases or provisions which are specifically required, recommended or endorsed by a state or federal statute, rule or regulation.

(3) Review: After a contract is submitted the Department will:

(a) Return the contract and the fee if the Department determines that the contract submitted for review is not a consumer contract; or

(b) Certify the consumer contract meets Oregon Plain Language guidelines if it meets the standards set forth in ORS 180.540, et seq.;

(c) Inform the person submitting the contract that the contract does not comply with Oregon's Plain Language Standard. The Department shall provide a brief explanation of its determination. The explanation need not include every reason for non-compliance and corrections of each stated deficiency will not assure compliance;

(d) Return any fees charged over and above the initial $250 filing fee to the extent the fee exceeded the cost of review.

(4) Certification: Certification of a consumer contract under this rule is not an approval of the contract's legality or legal effect. The fact that a consumer contract has been certified or not certified shall not be admissible in any action to interpret or enforce a contract or any term of a contract.

(5) No person may use a contract which represents it meets Oregon's Plain Language guidelines unless the person has received certification of the contract pursuant to this rule.

(6) Any oral or written reference to the Department's certification must be accompanied by the following statement: The Department of Justice Certification of a contract under the Plain Language Contract Act is not an approval of the contract's legality or legal effect.

Stat. Auth.: ORS 180.540, ORS 183.310 - ORS 183.550 & ORS 646
Stats. Implemented: ORS 180.540, ORS 180.545 & ORS 180.555
Hist.: JD 5-1985, f. 12-20-85, ef. 1-1-86; JD 13-1992, f. & cert. ef. 6-5-92

Gasoline Advertising

137-020-0150

Gasoline Price Advertising

(1) Definitions: For the purposes of OAR 137-020-0150 to 137-020-0160 the following definitions apply:

(a) “Clear and conspicuous” means in a form that is readily visible to and easily readable by a customer or potential customer who would be materially affected by the information and means in a location that a person who would be materially affected by the information ought to notice the information displayed.

(b) “Condition” means any payment method (e.g., credit), service level (e.g., full service or mini service), or any other modifying circumstance affecting the price per unit of measurement of motor vehicle fuel from the lowest cash price;

(c) “Diesel” means a refined middle distillate suitable for use as a fuel in a compression-ignition (diesel) internal combustion engine;

(d) “Display” means to post information on a street sign or price sign;

(e) “Full service” includes services such as washing windshields, windows and headlights, checking fluid levels, checking or adjusting tire pressure and inspecting belts and hoses but does not include a car wash;

(f) “Gasoline” means any fuel sold for use in spark ignition engines whether leaded or unleaded;

(g) “Grade” means the automotive fuel rating as defined in OAR 603-027-0410;

(h) “Lowest cash price” means the offering price available to all customers that pay in cash;

(i) “Mini service” means providing only the dispensing of motor vehicle fuel into a customer’s vehicle;

(j) “Motor vehicle fuel” means gasoline, diesel or other fuel used for the generation of power in an internal combustion engine, except aviation jet fuels;

(k) “Other fuel” means gasoline-ethanol blends with greater than 10% by volume ethanol, 100% other renewable diesel (100% Biomass-Based Diesel), renewable diesel blends, B100 Biodiesel, Biodiesel Blends, E85 Fuel Ethanol, M85 Fuel Methanol, E15, or any other liquid product used for the generation of power in an internal combustion engine that is sold to be used in a motor vehicle, except for gasoline and diesel;

(l) “Price sign” means any sign, billboard, digital signage or other medium that provides the price charged for motor vehicle fuel, is visible from a dispensing device and is not a street sign;

(m) “ODOT diesel” means undyed diesel sold for use in motor vehicles, which may be purchased without the tax provided the purchaser has valid credentials issued by ODOT under ORS 825 or ORS 319. ODOT diesel was formerly known as PUC diesel;

(n) “Retailer” means any person who operates a service station, business or other place for the purpose of retailing and delivering gasoline, diesel or other fuel into the tanks of motor vehicles;

(o) “Street sign” means any sign, billboard, digital signage or other medium that provides the price charged for motor vehicle fuel and is located near and is visible from a street or highway, such as a freeway pole sign or a monument sign; and

(p) “Unit of measurement” means a United States gallon or liter as defined in the National Institute of Standards and Technology (NIST) Handbook 44 entitled “Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices” as adopted in OAR 603-027-0635.

(2) Advertising: A retailer is not required to display prices charged for motor vehicle fuel.

(3) Displayed Prices: A retailer may display a price for motor vehicle fuel. If a retailer displays a price for motor vehicle fuel:

(a) The retailer must clearly and conspicuously display on each street sign the lowest cash prices charged for the sale of the lowest grade of each type of motor vehicle fuel sold or offered for sale to all customers or potential customers;

(b) Notwithstanding subparagraph (a) above, if a retailer only sells or offers for sale ODOT diesel and no other motor vehicle fuel (including other diesel), the retailer may display only the ODOT diesel price on the street sign and does not need to post a price sign;

(c) The retailer must clearly and conspicuously display on each price sign all prices charged for the sale of all grades of motor vehicle fuel sold or offered for sale;

(d) If the lowest cash prices are available only under some conditions:

(A) The retailer must clearly and conspicuously display all conditions on each street sign, price sign and dispensing device (e.g., cash only, mini serve);

(B) The retailer must ensure the following for each distinct street sign:

(i) All words or symbols of condition are in equal size and must be equally visible to a customer or potential customer;

(ii) All words or symbols of condition are in no less than one-third the size as the words or symbols setting forth the cash price; and

(iii) All words or symbols setting forth the prices applicable to the condition are in equal size and must be equally visible to a customer or potential customer as the words or symbols setting forth the cash price.

(C) The retailer must ensure the following for each distinct price sign:

(i) All words or symbols of condition are in equal size and must be equally visible to a customer or potential customer;

(ii) All words or symbols of condition are in equal size as the words or symbols setting forth the cash price; and

(iii) All words or symbols setting forth the prices applicable to the condition are in equal size and must be equally visible to a customer or potential customer as the words or symbols setting forth the cash price.

(D) The retailer must clearly identify the area where each price is available, if the lowest cash price is available only in a certain area of the service station or business. The identification may be placed on the canopy above the island, if it is visible from each side of the island, or at the entry points of the island. The identification must be clear and conspicuous from a driver’s position;

(E) For full service, the retailer must state what specific services are included in its full service at the entry points of the island where full service is available; and

(F) The retailer may only charge a price greater than the lowest cash price if the retailer provides the condition or the condition is offered in a designated location and the customer affirmatively rejects the condition (e.g., the retailer either provided full service or the retailer offered to perform all services included in that retailer’s full service in a location designated as full service and the customer rejected the services offered).

(e) The retailer may offer a discount from the lowest cash price for customers that enroll in a loyalty program, membership program or other similar program where a customer must affirmatively enroll in the program. If the discounted program is not available to all members of the general public, the retailer does not need to display the discounted program price under subsection (3)(c).

(f) The retailer must arrange all prices in a meaningful and consistent order;

(g) The retailer must clearly and conspicuously identify each grade of motor vehicle fuel that corresponds with each price;

(h) The retailer may not display prices for products other than motor vehicle fuel in a manner that creates a likelihood of confusion or misunderstanding with the price of motor vehicle fuel;

(i) The retailer may not require as a condition of buying motor vehicle fuel at the displayed price that a customer purchase a specific quantity (e.g., 8 gallons or a full tank) or dollar amount of motor vehicle fuel; and

(j) The retailer may display on the street sign all of the information required to be displayed on the price sign under subsection (5)(d)(B).

(4) Dispensing Devices: In regards to its motor vehicle fuel dispensing devices, a retailer must:

(a) Ensure that the price per unit of measurement and the unit of measurement for each grade of motor vehicle fuel are the same on each street sign, price sign and dispensing device used for delivering that kind of fuel into the tanks of motor vehicles;

(b) Ensure that computing-type dispensing devices automatically compute the full sales price for all motor vehicle fuel prices sold or offered for sale through the dispensing devices;

(c) Ensure that dispensing devices are set to display and compute all unit prices for each grades of motor vehicle fuel sold. A retailer may not use a dispensing device to dispense motor vehicle fuel at one or more unit prices the dispensing device cannot compute;

(d) Calibrate all dispensing devices in the same unit of measurement;

(e) Charge the customer only the total amount registered on the dispensing device at the selected unit price;

(f) If the lowest cash prices are available only under some conditions, ensure the dispensing device clearly and conspicuously states all conditions.

(A) The words or symbols of condition may be posted on the upper 50 percent of the dispensing device panel or on top of the dispensing device (“pump topper”); and

(B) The retailer must ensure that the letters stating the conditions are in block lettering type at least one inch in height and one-half inch stroke (width of type) in distinct contrasting color to the background.

(5) Price signs:

(a) In regards to its price signs, a retailer must:

(A) Ensure that at least one price sign is visible at or near each dispensing device; and

(B) Ensure that the information displayed on each price sign is clear and conspicuous from a driver’s position.

(b) A retailer may place a price sign on top of the dispensing device (“pump topper”), on the island or on the side of the retailer’s building;

(c) A retailer may post price signs in multiple locations in order to comply with subsection (5)(a) (e.g., a retailer may use pump toppers for one island and a sign on the side of the building for another island). Each price sign must comply with subsections (5)(d) and (e);

(d) If the price sign is on top of the dispensing device, the retailer must ensure:

(A) That the letters and numerals on the sign are in block lettering type at least one inch in height and one-half inch stroke (width of type) in distinct contrasting color to the background; and

(B) That the following information is displayed on the price sign:

(i) All words or symbols of condition; and

(ii) Immediately adjacent to the words or symbols of condition, either:

(I) The whole unit price of any condition for each grade of motor vehicle fuel; or

(II) The additional price per unit of measurement for any condition in whole cents (e.g., “credit price + 3¢/gal” or “full service additional 10¢/gal”) for each grade of motor vehicle fuel. If the additional price per unit of measurement for a specific condition (e.g., credit) for each grade of motor vehicle fuel is the same, then only one price reference is required under this subparagraph.

(e) If the price sign is on the island or on the side of the retailer’s building, the retailer must ensure:

(A) That the letters and numerals on the sign are in block lettering type at least three inches in height and one and one-half inch stroke (width of type) in distinct contrasting color to the background; and

(B) That the following information is displayed on the price sign:

(i) All words or symbols of condition; and

(ii) Immediately adjacent to the words or symbols of condition, the whole unit price of any condition for each grade of motor vehicle fuel.

(6) Effective date: If a retailer that displays a price for motor vehicle fuel complies with this subsection on January 1, 2011, the retailer does not need to comply with subsection (5) unless and until the retailer purchases a new street sign or modifies its street sign;

(a) The retailer clearly and conspicuously displays on each street sign the lowest cash prices for the sale of all grades of motor vehicle fuel sold or offered for sale;

(b) Notwithstanding subparagraph (a) above, if a retailer only sells or offers for sale ODOT diesel and no other motor vehicle fuel (including other diesel), the retailer may display only the ODOT diesel price on the street sign;

(c) If the lowest cash prices are available only under some conditions:

(A) The retailer clearly and conspicuously displays all conditions on the street sign and dispensing device;

(B) The retailer ensures the following for the street sign:

(i) All words or symbols of condition are in equal size and are equally visible to a customer or potential customer;

(ii) All words or symbols of condition are in no less than one-third the size as the words or symbols setting forth the cash price; and

(iii) All words or symbols setting forth the prices applicable to the condition are in equal size and are equally visible to a customer or potential customer as the words or symbols setting forth the cash price.

(C) Immediately adjacent to the words or symbols of condition, the retailer displays on the street sign either:

(i) The whole unit price of any condition for each grade of motor vehicle fuel; or

(ii) The additional price per unit of measurement for any condition in whole cents (e.g., “credit price + 3¢/gal” or “full service additional 10¢/gal”) for each grade of motor vehicle fuel. If the additional price per unit of measurement for a specific condition (e.g., credit) for each grade of motor vehicle fuel is the same, then only one price reference is required under this subparagraph.

(D) The retailer clearly identifies the area where each price is available, if the lowest cash price is available only in a certain area of the service station or business. The identification may be placed on the canopy above the island, if it is visible from each side of the island, or at the entry points of the island. The identification must be clear and conspicuous from a driver’s position;

(E) For full service, the retailer states what specific services are included in its full service at the entry points of the island where full service is available; and

(F) The retailer only charges a price greater than the lowest cash price if the retailer provides the condition or the condition is offered in a designated location and the customer affirmatively rejects the condition (e.g., the retailer either provided full service or the retailer offered to perform all services included in that retailer’s full service in a location designated as full service and the customer rejected the services offered).

(d) The retailer may offer a discount from the lowest cash price for customers that enroll in a loyalty program, membership program or other similar program where a customer must affirmatively enroll in the program. If the retailer displays the discounted program price, it complies with subsection (6)(c);

(e) The retailer arranges all prices in a meaningful and consistent order;

(f) The retailer clearly and conspicuously identifies each grade of motor vehicle fuel that corresponds with each price;

(g) The retailer does not display prices for products other than motor vehicle fuel in a manner that creates a likelihood of confusion or misunderstanding with the price of motor vehicle fuel; and

(h) The retailer does not require as a condition of buying motor vehicle fuel at the displayed price that a customer purchase

a specific quantity (e.g., 8 gallons or a full tank) or dollar amount of motor vehicle fuel.

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.608(1)(u) & 1985 c.751 (2)
Hist.: JD 7-1985, f. 12-31-85, ef. 1-1-86; DOJ 20-2010, f. 12-30-10, cert. ef. 1-1-11

137-020-0160

Sales Practices

(1) A retailer may not limit the price advertised for a particular grade of motor vehicle fuel to a customer purchasing or receiving goods or services in addition to the motor vehicle fuel except for full services. For purposes of this rule, a customer does not include customers who purchase ODOT diesel.

(2) The location at which any grade of motor vehicle fuel is dispensed or at which any condition is applicable will not be changed except for a bona fide reason and will not be changed within 60 days of another change except for an emergency or legal necessity.

(3) Violation of OAR 137-020-0150 and this rule is a violation of the Unlawful Trade Practices Act, ORS 646.608(1)(u).

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.608(1)(u) & 1985 c.751 (2)
Hist.: JD 7-1985, f. 12-31-85, ef. 1-1-86; DOJ 21-2010, f. 12-30-10, cert. ef. 1-1-11

Registration of Telemarketers

137-020-0200

Definitions

For purposes of OAR 137-020-0200 through 137-020-0203:

(1) "Telephonic Seller" applies to all persons required to register with the Oregon Department of Justice pursuant to ORS 646.551 through 646.565.

(2) "Doing Business in This State" means making telephonic solicitations of prospective purchasers from locations in this state or making telephonic solicitations of prospective purchasers who are located in this state.

(3) "Department" means Department of Justice.

(4) "Item" means any goods and services and includes coupon books which are to be used with businesses other than the seller's business.

(5) "Owner" means a person who owns or controls ten percent or more of the net income of a telephonic seller.

(6) "Person" includes an individual firm, association, corporation, partnership, joint venture, or any other business entity.

(7) "Principal" means an owner, an executive officer of a corporation, a general partner of a partnership, a sole proprietor of a sole proprietorship, a trustee of a trust, or any other individual with similar supervisory functions with respect to any person.

(8) "Purchaser" or "Prospective Purchaser" means a person who is solicited to become or does become obligated to a telephonic seller.

(9) "Salesperson" means any individual employed, appointed or authorized by a telephonic seller, whether referred to by the telephonic seller as an agent, representative, or independent contractor, who attempts to solicit or solicits a sale on behalf of the telephonic seller. The principals of a seller are themselves salespersons if they solicit sales on behalf of the telephonic seller.

(10) "Newspaper of General Circulation" is a newspaper published for the dissemination of local or telegraphic news and intelligence of a general character, and which has been established, printed and published at regular intervals in the state, county, or city where publication, notice by publication, or official advertising is to be given or made for at least one year preceding the date of the publication, notice or advertisement.

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.551
Hist.: JD 4-1989, f. & cert. ef. 10-3-89

137-020-0201

Registration

(1) Not less than ten days prior to doing business in this state, a telephonic seller shall register with the Department of Justice by filing the information required by OAR 137-020-0202 and a filing fee of $400. A seller shall be deemed to do business in this state if the seller solicits prospective purchasers from locations in this state or solicits prospective purchasers who are located in this state.

(2) The information required by OAR 137-020-0202 shall be submitted on a form provided by the Department of Justice and shall be verified by a declaration signed by each principal of the telephonic seller under penalty of perjury. The declaration shall specify the date and location of signing. Information submitted pursuant to 137-020-0202(12) or (13) shall be clearly identified and appended to the filing.

(3) Registration of a telephonic seller shall be valid one year from the effective date thereof and may be annually renewed by making the filing required by OAR 137-020-0202 and paying a filing fee of $400.

(4) Whenever, prior to expiration of a seller's annual registration, there is a material change in the information required by OAR 137-020-0202, the seller shall, within ten days, file an addendum updating the information with the Department of Justice. However, changes in salespersons soliciting on behalf of a seller shall be updated by addenda filed, if necessary, in quarterly intervals computed from the effective date of registration. The addendum shall provide the required information for all salespersons who are currently soliciting or have solicited on behalf of the seller at any time during the period between the filing of the registration, or the last addendum, and the current addendum, and shall include salespersons no longer soliciting for the seller as of the date of the filing of the current addendum.

(5) Upon receipt of a filing and filing fee pursuant to section (1) or (3) of this rule, the department shall send the telephonic seller a written confirmation of receipt of the filing. If the seller has more than one business location, the written confirmation shall be sent to the principal business location identified in the seller's filing in sufficient number so that the seller has one for each business location. The seller shall post the confirmation of receipt of filing, within ten days of receipt thereof, in a conspicuous place at each of the seller's business locations and shall have available for inspection by any governmental agency at each location a copy of the entire registration statement which has been filed with the department. Until confirmation of receipt of filing is received and posted, the seller shall post in a conspicuous place at each of the seller's business locations within this state a copy of the first page of the registration form sent to the department. The seller shall also post in close proximity to either the confirmation of receipt of filing, or until the confirmation is received, the first page of the submitted registration form, the name of the individual or individuals in charge of each location from which the seller does business in this state, as defined in OAR 137-020-0200(2).

Stat. Auth.: ORS Ch. 646
Stats. Implemented: ORS 646.553
Hist.: JD 4-1989, f. & cert. ef. 10-3-89

137-020-0202

Filing Information

Each filing pursuant to OAR 137-020-0201(1) through (5) shall contain the following information:

(1) The name or names of the seller, including the name under which the seller is doing or intends to do business, if different from the seller's, and the name of any parent or affiliated organization that will engage in business transactions with purchasers relating to sales solicited by the seller or that accepts responsibility for statements made by, or acts of, the seller relating to sales solicited by the seller.

(2) The seller's business form and place of organization and, if the seller is a corporation, a copy of its articles of incorporation and bylaws and amendments thereto: or, if a partnership, a copy of the partnership agreement; or if operating under a fictitious business name, the location where the fictitious name has been registered. All the same information shall be included for any parent or affiliated organization disclosed pursuant to section (1) of this rule.

(3) The complete street address or addresses of all locations, designating the principal location from which the telephonic seller will be conducting business. If the principal location of the seller is not in this state, then the seller shall also designate which of its locations within this state is its main location in the state.

(4) A listing of all telephone numbers to be used by the seller and the address where each telephone using each of these telephone numbers is located.

(5) The name of, and the office held by, the seller's officers, directors, trustees, general and limited partners, sole proprietor, and owners, as the case may be, and the names of those persons who have management responsibilities in connection with the seller's business activities.

(6) The complete address of the principal residence, the date of birth and the driver's license number and state of issuance of each of the persons whose names are disclosed pursuant to section (5) of this rule.

(7) The name and principal residence address of each person the telephonic seller leaves in charge at each location from which the seller does business in this state, as defined in OAR 137-020-0200(2), and the business location which each of these persons is or will be in charge of.

(8) A statement, meeting the requirements of this rule, as to both the seller, whether a corporation, partnership, firm, association, joint venture, or any other type of business entity (and whether identified pursuant to section (5) or (7) of this rule or not), and as to any person identified pursuant to sections (5) and (7) of this rule, who:

(a) Has been convicted of a felony or misdemeanor involving fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property. For purposes of this paragraph, a plea of nolo contendere is a conviction;

(b) Has had entered against him or her a final judgment or order in a civil or administrative action, including a stipulated judgment or order, if the complaint or petition in the civil or administrative action alleged acts constituting a violation of the Unlawful Trade Practices Act, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property, the use of untrue or misleading representations in an attempt to sell or dispose of real or personal property, or the use of unfair, unlawful or deceptive business practices;

(c) Is subject to any currently effective injunction or restrictive court order relating to business activity as the result of an action brought by a federal, state, or local public agency or unit thereof, including, but not limited to, an action affecting any vocational license;

(d) Has at any time during the previous seven tax years filed for bankruptcy, been adjudged a bankrupt, been reorganized due to insolvency, or been a principal, director, officer, trustee, general or limited partner, or had management responsibilities of any other corporation, partnership, joint venture, or business entity that has so filed or was so adjudicated or reorganized during or within one year after the period that the person held that position. For purposes of subsections (a), (b) and (c) of this section, the statement required by this subdivision shall identify the seller or person, the court or administrative agency rendering the judgment or order, the docket number of the matter, the date of the judgment or order, and the name of the governmental agency, if any, that brought the action resulting in the judgment or order. For purposes of this subsection, the statement required by this subdivision shall include the name and location of the seller or person filing in bankruptcy, adjudged a bankrupt, or reorganized due to insolvency, and shall include the date thereof, the court which exercised jurisdiction, and the docket number of the matter.

(9) The name of the financial institution and account number for each of the seller's demand accounts; checking accounts; and merchant accounts used for the deposit of any credit card charge slips, including but not limited to credit cards issued by VISA, MasterCard, Discover Card, American Express, Diners Club or Carte Blanche.

(10) Every pseudonym or alias ever used or now being used by a salesperson, manager or principal of the telephonic seller's business.

(11) A list of the names and principal residence addresses of salespersons who solicit on behalf of the telephonic seller and the names the salespersons use while so soliciting.

(12) A description of the items the seller is offering for sale and a copy of all sales scripts the telephonic seller requires salespersons to use when soliciting prospective purchasers, or if no sales script is required to be used, a statement to that effect.

(13) A copy of all sales information and literature (including but not limited to scripts, outlines, instructions, and information regarding how to conduct telephonic sales, sample introductions, sample closings, product information, and contest or premium-award information) provided by the telephonic seller to salespersons or of which the seller informs salespersons, and a copy of all written materials the seller sends to any prospective or actual purchaser.

(14) If the telephonic seller represents or implies, or directs salespersons to represent or imply to purchasers that the purchaser will receive certain specific items (including a certificate of any type which the purchaser must redeem to obtain the item described in the certificate) or one or more items from among designated items, whether the items are denominated as gifts, premiums, bonuses, prizes, or otherwise, the filing shall include the following:

(a) A list of the items offered;

(b) The value or worth of each item described to prospective purchasers and the basis for the valuation;

(c) The price paid by the telephonic seller to its supplier for each of these items and the name, address, and telephone number of each item's supplier;

(d) If the purchaser is to receive fewer than all of the items described by the seller, the filing shall include the following:

(A) The manner in which the telephonic seller decides which item or items a particular prospective purchaser is to receive;

(B) The odds a single prospective purchaser has of receiving each described item;

(C) The name and address of each recipient who has, during the preceding 12 months (or if the seller has not been in business that long, during the period the telephonic seller has been in business) received the item having the greatest value and the item with the smallest odds of being received.

(e) All rules, regulations, terms, and conditions a prospective purchaser must meet in order to receive the item.

(15) If the telephonic seller is offering to sell any metal, stone, or mineral, the filing shall include the following:

(a) The name, address, and telephone number of each of the seller's suppliers and a description of each metal, stone, or mineral provided by the supplier;

(b) If possession of any metal, stone, or mineral is to be retained by the seller or will not be transferred to the purchaser until the purchaser has paid in full, the filing shall include the following:

(A) The address of each location where the metal, stone, or material will be kept;

(B) If not kept on premises owned by the seller or at an address or addresses set forth in compliance with section (3) of this rule, the name of the owner of the business at which the metal, stone, or mineral will be kept;

(C) A copy of any contract or other document which evidences the seller's right to store the metal, stone, or mineral at the address or addresses designated pursuant to paragraph (A) of this subsection.

(c) If the seller is not selling the metal, stone, or mineral from its own inventory, but instead purchases the metal, stone, or mineral to fill orders taken from purchasers, the filing shall include copies of all contracts or other documents evidencing the seller's ability to call upon suppliers to fill the seller's orders;

(d) If the seller represents to purchasers that the seller has insurance or a surety bond of any type relating to a purchaser's purchase of any metal, stone, or mineral from the seller, the filing shall include a complete copy of all these insurance policies and bonds;

(e) If the seller makes any representations as to the earning or profit potential of purchases of any metal, stone, or mineral, the filing shall include data to substantiate the claims made. If the representation relates to previous sales made by the seller or a related entity, substantiating data shall be based on the experiences of at least 50 percent of the persons who have purchased the particular metal, stone, or mineral from the seller or related entity during the preceding six months (or if the seller or related entity has not been in business that long, during the period the seller or related entity has been in business) and shall include the raw data upon which the representation is based, including, but not limited to, all of the following:

(A) The length of time the seller or related entity has been selling the particular metal, stone, or mineral being offered;

(B) The number of purchasers thereof from the seller or related entity known to the seller or related entity to have made at least the same earnings or profit as those represented;

(C) The percentage that the number disclosed pursuant to paragraph (B) of this subsection represents of the total number of purchasers from the seller or related entity of the particular metal, stone, or mineral.

(16) If the telephonic seller is offering to sell an interest in oil, gas, or mineral fields, wells, or exploration sites, the filing shall include disclosure of the following:

(a) The seller's ownership interest, if any, in each field, well, or site being offered for sale;

(b) The total number of interests to be sold in each field, well, or site being offered for sale;

(c) If, in selling an interest in any particular field, well, or site, reference is made to an investigation of these fields, wells, or sites by the seller or anyone else, the filing shall include the following:

(A) The name, business address, telephone number, and professional credentials of the person or persons who made the investigation;

(B) A copy of the report and other documents relating to the investigation prepared by the person or persons.

(d) If the seller makes any representation as to the earning or profit potential of purchases of any interest in these fields, wells, or sites, the filing shall include data to substantiate the claims made. If the representation relates to previous sales made by the seller or a related entity, the substantiating data shall be based on the experiences of at least 50 percent of the purchasers of the particular interests from the seller or the related entity during the preceding six months (or if the seller has not been in business that long, during the period the seller or related entity has been in business) and shall include the raw data upon which the representation is based, including, but not limited to, all of the following:

(A) The length of time the seller or related entity has been selling the particular interests in the fields, wells, or sites being offered;

(B) The number of purchasers of the particular interests from the seller or related entity known to the seller to have made at least the same earnings as those represented;

(C) The percentage which the number disclosed pursuant to paragraph (B) of this subsection represents of the total number of purchasers of the particular interests from the seller or related entity.

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.553
Hist.: JD 4-1989, f. & cert. ef. 10-3-89

137-020-0203

Information to Be Provided Each Prospective Purchaser

In addition to complying with the requirements of OAR 137-020-0202, as applicable, each telephonic seller, shall, at the time the solicitation is made and prior to consummation of any sales transaction, provide all of the following information to each prospective purchaser:

(1) If the telephonic seller represents or implies that a prospective purchaser will receive, without charge therefor, certain specific items or one item from among designated items, whether the items are denominated as gifts, premiums, bonuses, prizes, or otherwise, the seller shall provide the following:

(a) The information required to be filed by OAR 137-020-0202(14)(d)(A) and (B), and (e);

(b) The complete street address of the location from which the salesperson is calling the prospective purchaser and, if different, the complete street address of the telephonic seller's principal location;

(c) The total number of individuals who have actually received from the telephonic seller, during the preceding months (or if the seller has not been in business that long, during the period the telephonic seller has been in business), the item having the greatest value and the item with the smallest odds of being received.

(2) If the telephonic seller is offering to sell any metal, stone, or mineral, the seller shall provide the following information:

(a) The complete street address of the location from which the salesperson is calling the prospective purchaser and, if different, the complete street address of the telephonic seller's principal location;

(b) The information specified in OAR 137-020-0202(15)(b)(A) and (B) and (e).

(3) If the telephonic seller is offering to sell an interest in oil, gas, or mineral fields, wells, or exploration sites, the seller shall provide the following information:

(a) The complete street address of the location from which the salesperson is calling the prospective purchaser and, if different, the complete street address of the telephonic seller's principal location;

(b) The information required to be filed by OAR 137-020-0202(16)(a), (b) and (d) and (c)(A).

(4) If the telephonic seller represents that office equipment or supplies being offered are offered at prices which are below those usually charged for these items, the seller shall provide the following information:

(a) The complete street address of the location from which the salesperson is calling the prospective purchaser and, if different, the complete street address of the telephonic seller's principal location;

(b) The name of the manufacturer of each of the items the telephonic seller has represented for sale and in which the prospective purchaser expresses interest.

Stat. Auth.: ORS 646
Stats. Implemented: ORS 646.557
Hist.: JD 4-1989, f. & cert. ef. 10-3-89

137-020-0204

Refusal to Issue or Renew Registration; Revocation or Suspension of Registration

(1) The Department may refuse to issue or renew a registration to a telephonic seller or may revoke or suspend the registration of a telephonic seller upon a finding of any of the causes listed in ORS 646.553(6). Opportunity for a hearing shall be afforded as provided in ORS 183.310 to 183.550.

(2) Except as otherwise specifically provided herein, the requirements of OAR 137-003-0001 to 137-003-0092 shall apply to all hearings held pursuant to this rule.

(3) The Department shall send a notice to the telephonic seller and their authorized representative by certified mail of the Department's intent to refuse to issue or renew a registration or to revoke or suspend a registration. The notice to the telephonic seller shall be sent to the principal business location of the telephonic seller, as shown on the filing information provided under ORS 137-020-0202.

(4) In addition to the notice requirements under OAR 137-003-0001, the notice provided under section (3) of this rule shall include a statement that an answer to the Department's assertions or charges will be required, and listing the consequences of failure to answer. A statement of the consequences of failure to answer may be satisfied by enclosing a copy of section (6) of this rule with the notice.

(5) A hearing request and answer shall be made in writing to the Department by the telephonic seller or their authorized representative. Except as otherwise provided by sections (7) and (8) of this rule, a hearing request and answer must be received within 21 calendar days from the date the notice to the applicant was mailed by the Department to be considered timely.

(6) An answer shall include the following:

(a) An admission or denial of each factual matter alleged in the Department's notice;

(b) A short and plain statement of each relevant affirmative defense the telephonic seller may have;

(c) A short and plain statement of each legal issue the telephonic seller may have;

(d) Except for good cause:

(A) Factual matters alleged in the notice and not denied in the answer shall be presumed admitted;

(B) Failure to raise a particular defense or legal issue in the answer shall be considered a waiver of such defense or legal issue;

(C) New matters alleged in the answer that were not alleged in the notice (affirmative defenses) shall be presumed to be denied by the Department; and

(D) Evidence shall not be taken on any issue not raised in the notice and answer.

(7) A telephonic seller or their authorized representative may submit a written request for an extension in which to file an answer to the Department's notice. To be considered timely, the extension request must be received within 21 calendar days from the date the notice to the applicant was mailed by the Department. The Department shall grant extensions only upon a showing of good cause.

(8) A telephonic seller or their authorized representative may submit written amendments to their answer. To be considered timely, the amendments must be received by the Department no less than 21 calendar days prior to the contested case hearing. The Department shall allow amendments to answers only upon a showing of good cause.

Stat. Auth.: ORS 646.553(7)
Stats. Implemented: ORS 646.553(7)
Hist.: DOJ 4-2000(Temp), f. & cert. ef. 6-15-00 thru 7-31-00

137-020-0205

Refusal to Issue or Renew Registration; Revocation or Suspension of Registration

(1) The Department may refuse to issue or renew a registration to a telephonic seller or may revoke or suspend the registration of a telephonic seller upon a finding of any of the causes listed in ORS 646.553(6). Opportunity for a hearing shall be afforded as provided in ORS 183.310 to 183.550.

(2) Except as otherwise specifically provided herein, the requirements of OAR 137-003-0001 to 137-003-0092 shall apply to all hearings held pursuant to this rule.

(3) The Department shall send a notice to the telephonic seller and their authorized representative by certified mail of the Department's intent to refuse to issue or renew a registration or to revoke or suspend a registration. The notice to the telephonic seller shall be sent to the principal business location of the telephonic seller, as shown on the filing information provided under ORS 137-020-0202.

(4) In addition to the notice requirements under OAR 137-003-0001, the notice provided under section (3) of this rule shall include a statement that an answer to the Department's assertions or charges will be required, and listing the consequences of failure to answer. A statement of the consequences of failure to answer may be satisfied by enclosing a copy of section (6) of this rule with the notice.

(5) A hearing request and answer shall be made in writing to the Department by the telephonic seller or their authorized representative. Except as otherwise provided by sections (7) and (8) of this rule, a hearing request and answer must be received within 60 calendar days from the date the notice to the applicant was mailed by the Department to be considered timely.

(6) An answer shall include the following:

(a) An admission or denial of each factual matter alleged in the Department's notice;

(b) A short and plain statement of each relevant affirmative defense the telephonic seller may have;

(c) A short and plain statement of each legal issue the telephonic seller may have;

(d) Except for good cause:

(A) Factual matters alleged in the notice and not denied in the answer shall be presumed admitted;

(B) Failure to raise a particular defense or legal issue in the answer shall be considered a waiver of such defense or legal issue;

(C) New matters alleged in the answer that were not alleged in the notice (affirmative defenses) shall be presumed to be denied by the Department; and

(D) Evidence shall not be taken on any issue not raised in the notice and answer.

(7) A telephonic seller or their authorized representative may submit a written request for an extension in which to file an answer to the Department's notice. To be considered timely, the extension request must be received within 21 calendar days from the date the notice to the applicant was mailed by the Department. The Department shall grant extensions only upon a showing of good cause.

(8) A telephonic seller or their authorized representative may submit written amendments to their answer. To be considered timely, the amendments must be received by the Department no less than 21 calendar days prior to the contested case hearing. The Department shall allow amendments to answers only upon a showing of good cause.

Stat. Auth.: ORS 646.553(7)
Stats. Implemented: ORS 646.553(7)
Hist.: DOJ 8-2000, f. & cert. ef. 8-14-00; DOJ 12-2000, f. 12-4-00, cert. ef. 12-5-00

137-020-0250

Loan Brokers and Misleading Activities

(1) Definitions: As used in this rule:

(a) The definitions of terms set forth in ORS 646.605 are applicable;

(b) "Advance Fee" means any consideration which is assessed or collected, prior to the closing of a loan, by a loan broker and includes, but is not limited to, payments to information providers as defined under ORS 759.700 et seq.;

(c) "Advertise" means any form of solicitation including but not limited to newspaper, radio and television advertisements;

(d) "Borrower" means a person obtaining or attempting to obtain a loan of money or a line of credit for personal use;

(e) "Loan Broker" means any person who:

(A) For or in expectation of consideration arranges or attempts to arrange or offers to find a loan of money or a line of credit;

(B) For or in expectation of consideration assists or advises a borrower in obtaining or attempting to obtain a loan of money, a line of credit, or related guarantee, enhancement, or collateral of any kind or nature; or

(C) Acts for or on behalf of a loan broker for the purpose of soliciting borrowers;

(D) "Loan broker" does not include:

(i) Any person making a direct loan to a consumer;

(ii) Any bank or savings and loan association, trust company, building and loan association, credit union, mutual bank and savings bank, consumer finance company, securities broker-dealer, real estate broker or salesperson, attorney, Federal Housing Administration or Veterans' Administration approved lender, mortgage broker or lender, or insurance company, provided that the person excepted is licensed by or approved by and subject to regulation or supervision of any agency of the United States or this state and is acting within the scope of the license or approval; and also excepting subsidiaries of licensed or chartered consumer finance companies, banks, credit unions, savings and loan associations;

(iii) Mortgage brokers exempt from licensing under ORS Chapter 59 or as defined in ORS 59.015(10);

(iv) Mortgage bankers as defined in ORS 59.015(9);

(v) A person making a retail installment sales;

(vi) Any person who has a contractual correspondent agreement with any qualified lender to deliver first or second mortgages secured by real estate; and

(vii) Any employee of the above exempted persons.

(f) "Principal" means any officer, director, partner, joint venturer, branch manager, or other person with similar managerial or supervisory responsibilities for a loan broker;

(g) "Qualified Lender" means any bank or savings and loan association, trust company, building and loan association, credit union, consumer finance company, retail installment sales company, Federal Housing Administration or Veterans' Administration approved lender or person who has available through a state or federally regulated financial institution $250,000 which the person has agreed to use to finance loans and who has executed a written contract with a loan broker according to this rule.

(2) It is unfair or deceptive in trade or commerce for a loan broker to charge an advance fee unless the loan broker:

(a) Prior to accepting any advance fees, provides to the prospective borrower a written contract which includes:

(A) The names of the loan broker and any parent organizations under which the parent organization is doing business;

(B) The length of time the loan broker has been in business;

(C) A full and detailed description of the actual services that the loan broker will perform for the prospective borrower;

(D) The number of contracts that the loan broker has entered into in the past 12 months;

(E) The number of loans that have been made to consumers through contracts with the loan broker in the past 12 months and the dollar amount of those loans;

(F) The name of the bank into which the borrower's advance fees will be deposited;

(G) Information concerning who the advance fees are paid to and for what service;

(H) The names of the qualified lenders that are providing loans to the loan broker's customers and the criteria that the qualified lenders are using to determine whether to make a loan to prospective borrowers referred to them by the broker; and

(I) A provision outlining the refund requirement set forth in subsection (3)(a) of this rule.

(b) Has a written contract from a qualified lender agreeing to accept or reject a loan within the time specified in this rule and agreeing to make a loan if an individual meets specified criteria set forth in the contract;

(c) Notifies the borrower within 14 days of receipt of the application whether the loan has been accepted or rejected and provides the loan within seven days of acceptance;

(d) Provides to the borrower, upon request, all correspondence and written materials with the qualified lender concerning the loan application;

(e) Submits the borrower's application within five days of receiving the application to a qualified lender with whom the loan broker has a written contract;

(f) Place any advance fees in an escrow account; and

(g) Complies with the provisions of section (3) of this rule.

(3) It is unfair and deceptive in trade or commerce for a loan broker to:

(a) Fail to refund within 48 hours of rejecting a loan the advance fees paid;

(b) Advertise or represents that all or most borrowers will qualify for a loan or that persons with bad credit histories or no credit histories will qualify for a loan;

(c) Fail to substantiate to the Oregon Department of Justice, within 14 days of a request, representations made regarding any offer to obtain a loan;

(d) Spend any advance fees until the loan has been granted; and

(e) Advertise loan brokering services without disclosing as a part of that advertisement:

(A) Any material restrictions regarding obtaining a loan;

(B) The qualified lenders who will provide the loans;

(C) The dollar amount of loans which the loan broker has obtained for borrowers;

(D) The cost of the service; and

(E) The maximum period of time the loan broker will take to obtain a written commitment from a qualified lender to loan money.

Stat. Auth.: ORS 183.310 - ORS 183.550, ORS 183.335(5) & ORS 646.608(1)(u) & (4)
Stats. Implemented: ORS 646.608(1)(u)
Hist.: JD 1-1992(Temp), f. & cert. ef. 2-13-92; JD 9-1992, f. & cert. ef. 4-15-92

137-020-0300

Unordered Real Estate, Goods, or Services

(1) As used in OAR 137-020-0300:

(a) "Goods" includes real estate and services;

(b) "Mistake" means unintentionally providing or sending goods to consumers;

(c) "Person" includes individual, corporation, partnership, association or any other legal entity;

(d) "Real Estate, Goods or Services" has the same meaning as ORS 646.605(7);

(e) "Send" includes delivery, mail, provide, or caused to be delivered, mailed or provided;

(f) "Unordered Goods" means any real estate, goods or services which are sent without prior expressed request or consent from the person receiving the goods;

(g) "Unordered Goods" do not include:

(A) Goods sent or services performed by mistake;

(B) A gift given free of charge to a consumer;

(C) Additions to existing services or levels of services already provided to consumers for which there is no separate and specific charge for such additions;

(D) Restructuring, after notice pursuant to section (2) of this rule of existing goods or services or levels of services already provided, where the restructuring does not result in a substantial change in goods or services;

(E) Goods sent pursuant to an agreement that is in compliance with 16 CFR § 425.

(2) A person satisfies the notice requirement of paragraph (1)(g)(D) of this rule when:

(a) The consumer receives one notice separate from the provider's regular billings, at least 30 but not more than 45 days, in advance of the effective date of the delivery of the new goods, clearly and conspicuously:

(A) Describing the specific goods to be delivered;

(B) Stating the price of the goods to be delivered;

(C) Informing the consumer that the goods will be delivered unless the consumer informs the provider that the goods are not wanted; and

(D) Informing the consumer of at least two methods, at least one of which is expense-free to the consumer, by which the consumer can inform the provider of the consumer's desire not to receive the goods.

(b) The first bill, containing a charge for the goods, clearly and conspicuously, and in direct proximity to an itemized listing of the new charge on the face of the bill, advises the consumer of the inclusion of the new charge on the bill for the new goods and of the consumer's right to cancel those goods within ten days of the receipt of the bill at no cost to the consumer for the period during which those goods were provided prior to effective cancellation.

(3) The notice required by section (2) of this rule shall not require the consumer to cancel the goods to avoid the charge prior to ten days after the consumer's receipt of the first bill containing the charges for goods.

(4) For purposes of this rule, cancellation by mail shall be effective upon the date of mailing the request for cancellation.

(5) It shall be unfair and deceptive in trade or commerce for any person to:

(a) Send a consumer unordered goods unless the person sending the goods proves the goods were sent by mistake, as a gift, or as a result of the consumer's prior expressed request or consent;

(b) Send any bill to a consumer for any unordered goods;

(c) Interrupt, delay, terminate, cancel, or deny delivery of or other provision of goods to a consumer because the consumer has not paid for or returned unordered goods;

(d) Require a consumer to consent to or authorize the receipt of unordered goods as a condition of doing business with the person.

Stat. Auth.: ORS 183.310 - ORS 183.410, ORS 646.608(1)(u) & ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u)
Hist.: JD 3-1991(Temp), f. & cert. ef. 5-31-91; JD 9-1991, f. & cert. ef. 11-26-91

Contest, Sweepstakes and Prize Notification Rules

137-020-0410

Definitions and Exemptions

(1) Purpose: The purpose of OAR 137-020-0410 to 137-020-0440 is to declare as unfair or deceptive in trade or commerce certain practices in promotions.

(2) Authority: OAR 137-020-0410 to 137-020-0440 are adopted pursuant to ORS Chapter 183 on authority granted to the Attorney General by 646.608(4) and 646.608(1)(u).

(3) Definitions: For purposes of OAR 137-020-0410 to 137-020-0440:

(a) The definitions set forth in ORS 646.605 are applicable.

(b) "Advertisement" or "solicitation" means any oral, written or graphic notice given in a manner designed to attract public attention and includes without limitation, public broadcasts, and notices published in the electronic press as well as telephone and mail solicitations used to encourage any type of action by the person solicited relating to a promotion.

(c) "Clear and conspicuous" means the message is conveyed in a manner that is reasonably apparent to the audience to whom it is directed. In order for a message to be considered clear and conspicuous, it shall, at a minimum:

(A) Not contradict or substantially alter any terms it purports to clarify, explain or otherwise relate to; and

(B) In the case of printed advertising or solicitations:

(i) Be in close proximity to the terms it purports to clarify, explain or otherwise relate to; and

(ii) Be of sufficient prominence in terms of placement, font or color contrast as compared with the remainder of the advertisement or solicitation so as to be reasonably apparent to the audience to whom it is directed.

(d) "Contest" means a procedure where a prize is awarded or offered in which the outcome depends on the skill of the contestant and includes puzzles, games, and competitions. "Contest" includes any such procedure in which a person is required to purchase anything, pay anything of value or make a donation. "Contest" includes also any such procedure which is advertised in a way creating the reasonable impression that a payment of anything of value, purchase of anything, or making a donation is a condition of awarding a prize or receiving, using, competing for, or obtaining information about a prize.

(e) "Prize" means a gift, award, cash award, or other thing of value offered or awarded to a person in a promotion.

(f) "Promotion" means any contest, sweepstakes or scheme. "Promotion" does not include any contest, sweepstakes or scheme in which the sole act required for entry, participation, or receipt of a prize is that the participant mail or deposit a form or game piece with the sponsor, place a call to a local or toll free number, or, mail a request or place a call to a local or toll-free number to obtain a game piece or form which the entrant can then return by mail or deposit at a local retail establishment, provided:

(A) That the fact that no purchase or payment of anything of value to the sponsor is required is clearly and conspicuously disclosed in each advertisement or solicitation; and

(B) No advertisements or solicitations for the contest, sweepstakes, or scheme create the reasonable impression that a payment of anything of value, purchase of anything, or making a donation is a condition of awarding a prize or receiving, using, competing for, or obtaining information about a prize.

(g) "Personal Financial Data" means personal financial data about the person, including but not limited to income, credit card ownership, bank account information, or similar financial information.

(h) "Scheme" means any advertisement or solicitation which requires a person to pay anything of value, make a donation, or creates the reasonable impression that a payment of anything of value, purchase of anything, or making a donation is a condition of awarding a prize or receiving, using, competing for, or obtaining information about a prize.

(i) "Sponsor" means any person who, in connection with any promotion, awards or offers another person a prize or who allows the person to receive, use, compete for, or obtain information about a prize.

(j) "Sweepstakes" means a procedure based on chance of awarding a prize. "Sweepstakes" includes any such procedure in which a person is required to purchase anything, pay anything of value or make a donation as a condition of awarding a prize or receiving, using, competing for, or obtaining information about a prize. "Sweepstakes" includes also any such procedure which is advertised in a way creating the reasonable impression that a payment of anything of value, purchase of anything, or making a donation, is a condition of awarding a prize or receiving, using, competing for, or obtaining information about a prize.

(k) "Verifiable Retail Value" has the meaning given in OAR 137-020-0015(1)(c).

(4) OAR 137-020-0410 to 137-020-0440 apply only to promotions. These rules do not apply to:

(a) Any activity by the State of Oregon or by a private person acting as a duly authorized contractee of the State Lottery Commission;

(b) A qualified nonprofit organization conducting a raffle pursuant to ORS Chapter 464; or

(c) Activity described in ORS 646.612(2).

(5) The information required to be disclosed pursuant to OAR 137-020-0420, OAR 137-020-0430 and OAR 137-020-0440 shall be deemed to be clearly and conspicuously disclosed if it is printed in compliance with this subsection in a distinct portion of the solicitation entitled "Consumer Disclosure," "Official Rules," or words of similar meaning. To comply with this subsection, the main text of the advertisement or solicitation shall contain clear and conspicuous reference to this portion, and the reference to the portion shall appear in close proximity to each description of the principal prize.

(6) Broadcast advertisements shall be exempt from the requirements of OAR 137-020-0420 and 137-020-0430(2)(a), (b), and (c) if:

(a) The information otherwise required by OAR 137-020-0420 to 137-020-0440 is available in writing; and

(b) The broadcast advertisement clearly and conspicuously refers the consumer to the location where the information is available.

Stat. Auth.: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Stats. Implemented: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Hist.: JD 2-1996, f. 6-21-96, cert. ef. 7-8-96

137-020-0420

Rules of Unique Application to Contests

It is unfair or deceptive in trade or commerce for a sponsor to advertise or solicit any person to participate in any contest which requires a person to pay money or make a donation or creates the impression in a reasonable person that a payment of anything of value, purchase of anything, or making a donation is a condition of participation in the contest, unless there is clear and conspicuous disclosure of:

(1) The maximum number of rounds or levels, if the contest has more than one round or level;

(2) The date the final winner will be determined;

(3) The maximum total cost the final winner will have paid to the sponsor to participate in the contest, and, if the final winner must purchase or pay anything of value to a person other than the sponsor as a condition of eligibility, then that fact must be clearly and conspicuously disclosed;

(4) If the contest involves multiple rounds of increasing difficulty, an example illustrative of the last determinative round or a statement that subsequent rounds will be more difficult;

(5) If the contest is judged by other than the sponsor, the identity of or description of the qualifications of the judges;

(6) The method used in judging; and

(7) The name and address of the sponsor, or the sponsor's agent, consistently stated wherever it is used in a promotion, and:

(a) The name and address of the sponsor, or the sponsor's agent, stated on the envelope used to mail the advertisement or solicitation; or

(b) The name and address of the sponsor, or the sponsor's agent, stated on the entry form.

Stat. Auth.: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Stats. Implemented: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Hist.: JD 2-1996, f. 6-21-96, cert. ef. 7-8-96

137-020-0430

Rules of Unique Application to Sweepstakes

It is unfair or deceptive in trade or commerce for a sponsor to advertise or solicit any sweepstakes unless there is a clear and conspicuous disclosure of:

(1) The statement of odds of winning in arabic numerals; provided that if the odds of winning depend on the number of entries received, a statement to that effect will be deemed sufficient;

(2) The name and address of the sponsor, or the sponsor's agent, consistently stated wherever it is used in a promotion, and:

(a) The name and address of the sponsor, or the sponsor's agent, stated on the envelope used to mail the advertisement or solicitation; or

(b) The name and address of the sponsor, or the sponsor's agent, stated on the entry form or on the heading to the solicitation; and

(3) The rules for entry without purchase.

Stat. Auth.: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Stats. Implemented: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Hist.: JD 2-1996, f. 6-21-96, cert. ef. 7-8-96

137-020-0440

Prohibitions Applicable to All Promotions (Including Schemes, Sweepstakes, and Contest)

It is unfair or deceptive in trade or commerce for a sponsor to advertise or solicit for a promotion if the sponsor:

(1) Misleads a person as to the source of the promotion. This prohibition includes but is not limited to a promotion which indicates or implies that the promotion originates from a government agency, public utility, insurance company, consumer reporting agency, debt collector, law firm, or common carrier, unless such is the case;

(2) Misleads a person to believe the number of persons eligible for the prize, contest, or next level of the contest is limited, or that a person has been selected to receive a particular prize, unless such is the case;

(3) Represents that a person has been declared a finalist, is in first place, or is otherwise in a limited group of persons with an enhanced likelihood of winning or receiving a prize, from which a single winner or select group of winners will receive a prize, when more than 25% of those receiving the notice have the same chance of winning;

(4) Represents directly or by implication that a person will have an increased chance of receiving a prize by making multiple or duplicate purchases, payments or donations, or by entering more than once, unless such is the case;

(5) Misleads a person that the person is being notified a second or final time of the opportunity to receive or compete for a prize, unless such is the case;

(6) Requires as a condition of participation in any promotion any person to disclose the person's personal financial data;

(7) Creates the reasonable impression that disclosure of a person's personal financial data is a condition of participating in any promotion;

(8) Makes or solicits any charge or fee that is not clearly and conspicuously disclosed in the initial advertisement or solicitation, as a condition of entering or continuing to participate in that promotion;

(9) Connects or combines prizes from different promotions unless the fact that the same prizes may be offered in various promotions is clearly and conspicuously disclosed and the combination of prizes will not affect the stated odds of winning;

(10) Issues any writing which simulates or resembles:

(a) A negotiable instrument as described in ORS 73.1040(1) unless the writing clearly and conspicuously discloses its true value and purposes and the writing would not mislead a reasonable consumer; or

(b) An invoice unless the invoice seeks payment for goods, property or services which the recipient has previously agreed to receive from the sponsor.

(11) Fails to clearly and conspicuously disclose the verifiable retail value in arabic numerals of any prize which the person receiving the notice has been selected to receive or may be eligible to receive;

(12) Fails to clearly and conspicuously disclose the cost of shipping or handling fees or any other charges necessary to participate in a promotion;

(13) Fails to clearly and conspicuously make any other disclosure necessary to assure that the promotion is not misleading, unfair, or deceptive;

(14) Charges a participant in a promotion for shipping, unless the charge is:

(a) Less than or equal to the average cost of postage or the average charge of a delivery service in the business of delivering goods of like size, weight, and kind for shippers other than the offeror of the gift; or

(b) Less than or equal to the exact amount for shipping paid to an independent fulfillment house or an independent supplier, either of which is in the business of shipping goods for shippers other than the offeror of the gift; or

(15) Charges a participant in a promotion for handling, unless the charge is:

(a) Reasonable;

(b) Less than or equal to the actual cost of handling; or

(c) In the case of a general merchandise retailer, less than or equal to the actual amount for handling paid to an independent fulfillment house or supplier, either of which is in the business of handling goods for businesses other than the offerer of the gift.

Stat. Auth.: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Stats. Implemented: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(1)(u)
Hist.: JD 2-1996, f. 6-21-96, cert. ef. 7-8-96

137-020-0450

Requests for Removal from Sweepstakes Promotion Mailing List; Additions to List of Persons to Whom Sweepstakes Promotions May Not Be Mailed

(1) Definitions. For purposes of this rule:

(a) "Department" means the Oregon Department of Justice.

(b) "Removal request" means a written request to be removed from a sweepstakes promotion mailing list or to be placed on a list of persons to whom sweepstakes promotions may not be mailed.

(c) "Person" means an individual, corporation, trust, partnership, or incorporated or unincorporated association.

(d) "Sweepstakes" has the meaning given in OAR 137-020-0410(j).

(e) "Sweepstakes promotion" means an offer to participate in a sweepstakes.

(2) Any person who receives a sweepstakes promotion in the United States mail may send a written removal request to the originator of the sweepstakes promotion.

(3) Removal requests shall be submitted on a "Sweepstakes Removal Request" form provided by the Department.

(4) Removal requests may be mailed to:

(a) The Department, at the address indicated on the "Sweepstakes Removal Request" form; or

(b) The originator of the sweepstakes promotion, at the address to which the recipient of the sweepstakes promotion would have sent a payment for any goods or services promoted in the sweepstakes promotion had the recipient ordered the goods or services instead of mailing a removal request.

(5) Within 15 business days of the receipt of a removal request, the Department shall forward the removal request to the originator of the sweepstakes promotion by certified mail.

(6) Within 60 calendar days of the date of receipt of a removal request by a person or the Department, the originator of the sweepstakes promotion shall remove the requestor's name from the originator's sweepstakes promotion mailing list or place the requestor's name on a list of persons to whom sweepstakes promotions may not be mailed.

(7) Failure by the originator of a sweepstakes promotion to comply with section (6) of this rule constitutes an unlawful trade practice under ORS 646.608.

Stat. Auth.: ORS 646.879
Stats. Implemented: ORS 646.879
Hist.: DOJ 5-2000(Temp), f. & cert. ef. 6-15-00 thru 7-26-00

137-020-0460

Requests for Removal from Sweepstakes Promotion Mailing List; Additions to List of Persons to Whom Sweepstakes Promotions May Not Be Mailed

(1) Definitions. For purposes of this rule:

(a) "Department" means the Oregon Department of Justice.

(b) "Removal request" means a written request to be removed from a sweepstakes promotion mailing list or to be placed on a list of persons to whom sweepstakes promotions may not be mailed.

(c) "Person" means an individual, corporation, trust, partnership, or incorporated or unincorporated association.

(d) "Sweepstakes" has the meaning given in OAR 137-020-0410(j).

(e) "Sweepstakes promotion" means an offer to participate in a sweepstakes.

(2) Any person who receives a sweepstakes promotion in the United States mail may send a written removal request to the originator of the sweepstakes promotion.

(3) Removal requests shall be submitted on a "Sweepstakes Removal Request" form provided by the Department.

(4) Removal requests may be mailed to:

(a) The Department, at the address indicated on the "Sweepstakes Removal Request" form; or

(b) The originator of the sweepstakes promotion, at the address to which the recipient of the sweepstakes promotion would have sent a payment for any goods or services promoted in the sweepstakes promotion had the recipient ordered the goods or services instead of mailing a removal request.

(5) Within 15 business days of the receipt of a removal request, the Department shall forward the removal request to the originator of the sweepstakes promotion by certified mail.

(6) Within 60 calendar days of the date of receipt of a removal request by a person or the Department, the originator of the sweepstakes promotion shall remove the requestor's name from the originator's sweepstakes promotion mailing list or place the requestor's name on a list of persons to whom sweepstakes promotions may not be mailed.

(7) Failure by the originator of a sweepstakes promotion to comply with section (6) of this rule constitutes an unlawful trade practice under ORS 646.608.

Stat. Auth.: ORS 646.879
Stats. Implemented: ORS 646.879
Hist.: DOJ 9-2000, f. & cert. ef. 8-14-00

Manufactured Dwelling Rules

137-020-0500 [Renumbered to 137-020-0535]

137-020-0505

Manufactured Dwelling Rules

(1) Purpose: The purpose of these rules is to declare as unfair or deceptive in trade or commerce certain practices involving the sale of manufactured dwellings; to set out disclosures that must be included in the manufactured dwelling purchase agreement; and to set out new requirements for disclosure of site improvements in manufactured dwelling park rental agreements.

(2) Authority: These rules are adopted pursuant to ORS Chapter 183 on authority granted by 90.516 (2001 OL Ch. 282 §5), 646.404 (2001 OL Ch. 969 §3), 646.608(1)(u) and 646.608(4).

Stat. Auth.: ORS 90.516 (2001 OL ch. 282 §5), ORS 180.520(1)(c), ORS 646.404 (2001 OL ch. 969 §3), ORS 646.608(1)(u) & ORS 646.608(4)
Stats. Implemented: ORS 90.510, ORS 90.512- ORS 90.518 (2001 OL ch.282), ORS 646.400 - ORS 646.404 (2001 OL ch. 969), ORS 646.608(1)(u), ORS 646.608(1)(yy) & ORS 646.608(4)
Hist.: DOJ 2-2002, f. & cert. ef. 4-15-02

137-020-0520

Definitions

For purposes of OAR 137-020-0520 to 137-020-565:

(1) "Base price" means the total retail cost of the following unless separately disclosed as described in OAR 137-020-0550:

(a) The manufactured dwelling as provided by the manufacturer;

(b) Features added by the dealer, if any;

(c) Freight; and

(d) Delivery and installation as stated in the purchase agreement.

(2) "Buyer" means a person who buys or agrees to buy a manufactured dwelling.

(3) "Clear and conspicuous" means information displayed in a form that is readily noticeable, easily readable, will be easily understood by the audience to whom it is directed, and is in a meaningful sequence. In order for a message to be considered "clear and conspicuous," it shall, at a minimum:

(a) Not contradict or substantially alter any terms it purports to clarify, explain or otherwise relate to;

(b) Use abbreviations or terms only if they are commonly understood by the average person, approved by federal or state law, or defined in the writing; and

(c) Be of sufficient prominence in terms of print style, size and contrast as compared with the remainder of the document or writing so as to be readily noticeable to an average person in the audience to whom it is directed.

(4) "Dealer" means any person in the business of selling, leasing or distributing new or used manufactured dwellings to persons who purchase or lease a manufactured dwelling for use as a residence.

(5) "Floor area" means the sum of the product of the length multiplied by the width of each section of a manufactured dwelling as delivered from the factory, expressed in approximate square feet.

(a) "Length" of a manufactured dwelling means the distance from the extreme exterior of the front wall (nearest to the drawbar and coupling mechanism) to the extreme exterior of the rear wall (at the opposite end of the home) where such walls enclose living or other interior space and such distance includes expandable rooms but not bay windows, porches, drawbars, couplings, hitches, wall and roof extensions or other attachments.

(b) "Width" of a manufactured dwelling means the distance between the extreme exterior of two opposite walls enclosing living or other interior space and including expandable rooms but not bay windows, porches, wall and roof extensions or other attachments.

OFFICIAL COMMENTARY: The definition of "floor area" in this rule is consistent with Building Codes Division's rules defining "length" and "width" of a manufactured dwelling under OAR 918-500-0005(21) and (54).

(6) "Improvements" means goods and services that are not included in the base price and that are, in general, needed to prepare a site and complete the setup of a manufactured dwelling. When describing improvements, each of the improvements must specify, where applicable, the dimensions and major structural materials to be used. "Improvements" include, but are not limited to:

(a) Installations or other changes that a tenant makes to a rental space;

(b) Site preparation;

(c) Sidewalks;

(d) Concrete;

(e) Skirting;

(f) Steps;

(g) Railings;

(h) Decks;

(i) Awnings;

(j) Carports;

(k) Garages;

(l) Sheds;

(m) Gutters, downspouts and rain drains;

(n) Utility connections;

(o) Heat pumps and air conditioning;

(p) Basements;

(q) Plants and landscaping;

(r) Permits;

(s) Installation fees; and

(t) Systems development charges.

(7) "Manufactured dwelling" means:

(a) Residential trailer, a structure constructed for movement on the public highways that has sleeping, cooking and plumbing facilities, that is intended for human occupancy, that is being used for residential purposes and that was constructed before January 1, 1962;

(b) Mobile home, a structure constructed for movement on the public highways that has sleeping, cooking and plumbing facilities, that is intended for human occupancy, that is being used for residential purposes and that was constructed between January 1, 1962, and June 15, 1976, and met the construction requirements of Oregon mobile home law in effect at the time of construction;

(c) "Manufactured home," a structure constructed for movement on the public highways that has sleeping, cooking and plumbing facilities, that is intended for human occupancy, that is being used for residential purposes and that was constructed in accordance with federal manufactured housing construction and safety standards and regulations in effect at the time of construction; and

(d) "Manufactured dwelling" does not mean any building or structure constructed to conform to the State of Oregon Structural Specialty Code or the One and Two Family Dwelling Code adopted pursuant to ORS 455.100 to 455.450 and ORS 455.610 to 455.630 or any unit identified as a recreational vehicle by the manufacturer.

(8) "Manufactured dwelling park" means any place where four (4) or more manufactured dwellings are located within 500 feet of one another on a lot, tract or parcel of land under the same ownership, the primary purpose of which is to rent or lease space or keep space for rent or lease to any person for a charge or fee paid or to be paid for the rental or lease or use of facilities or to offer space free in connection with securing the trade or patronage of such person. "Manufactured dwelling park" does not include a lot or lots located within a subdivision being rented or leased for occupancy by no more than one (1) manufactured dwelling per lot if the subdivision was approved by the local government unit having jurisdiction under an ordinance adopted pursuant to ORS 92.010 to 92.190.

(9) "Prospective tenant" means any person who has made any inquiry of the landlord of a manufactured dwelling park concerning the possibility of renting a space in a manufactured dwelling park.

(10) "Provider" means a contractor licensed under ORS chapter 701 who makes improvements to a manufactured dwelling park. The provider also includes the dealer or the landlord who contracts with the buyer to make site improvements for the manufactured dwelling, whether on private property or in a manufactured dwelling park.

(11) "Purchase agreement" means the written contract between the dealer and the buyer for the purchase of a manufactured dwelling. "Purchase agreement" does not include documents of a retail installment contract or loan agreement entered into as part of the purchase transaction.

(12) "Rental agreement" means all written agreements, valid rules and regulations adopted under ORS 90.510 embodying the terms and conditions concerning the use and occupancy of a manufactured dwelling unit and premises. "Rental agreement" includes a lease. A rental agreement shall specify the term of tenancy.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 90.516 (2001 OL ch. 282 §5), ORS 180.520(1)(c), ORS 646.404 (2001 OL ch. 969 §3), ORS 646.608(1)(u) & ORS 646.608(4)
Stats. Implemented: ORS 90.510, ORS 90.512 - ORS 90.518 (2001 OL ch. 282), ORS 646.400 - ORS 646.404 (2001 OL ch. 969), ORS 646.608(1)(u), ORS 646.608(1)(yy) & ORS 646.608(4)
Hist.: DOJ 2-2002, f. & cert. ef. 4-15-02

137-020-0535

Unfair Trade Practices

It is unfair or deceptive in trade or commerce for the dealer or the landlord of a manufactured dwelling park to:

(1) Require a prospective tenant to purchase a manufactured dwelling from a particular dealer or one of a group of dealers;

(2) Give preference to a prospective tenant who has purchased a manufactured dwelling from a particular dealer; or

(3) Require The buyer to rent a space for a manufactured dwelling in a particular manufactured dwelling park or group of such parks.

Stat. Auth.: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u) & ORS 646.608(4)
Hist.: JD 6-1997, f. & cert. ef. 11-3-97; DOJ 2-2002, f. & cert. ef. 4-15-02, Renumbered from 137-020-0500

137-020-0550

Manufactured Dwelling Purchase Agreement; List of Regulating Agencies

(1) The purchase agreement used by the manufactured dwelling dealer shall include the base price and a written itemization that clearly and conspicuously discloses the retail prices of the following, if not included in the base price:

(a) Manufactured dwelling options ordered by the buyer;

(b) Alterations and upgrades to the manufactured dwelling made by the dealer or by a third party at the request of the dealer;

(c) Improvements provided by the dealer, or by a third party at the request of the dealer, to the extent known to the dealer at the time of sale. The written itemization of improvements under this paragraph excuses the provider making the improvements from compliance with ORS 90.518(1) (2001 OL Ch. 282 §4(1));

OFFICIAL COMMENTARY: The provider of the improvements (contractor) may itemize the retail price for each listed improvement, or may itemize each improvement and include the total retail price for all improvements for which the provider contracts.

(d) Goods and services provided by the dealer, or by a third party at the request of the dealer, that are not otherwise disclosed pursuant to this rule;

(e) The amount of any earnest money paid to or collected by the dealer and the circumstances under which the earnest money may be returned to the buyer;

(f) The separate itemization and amount of each refundable or nonrefundable administrative or processing fee paid to or collected by the dealer and the circumstances under which each of the fees may be refunded to the buyer;

(g) All loan fees and credit report fees paid to or collected by the dealer to obtain financing for the buyer's purchase of the manufactured dwelling and the circumstances under which the fees may be returned to the buyer;

(h) Registration and other charges paid to or collected by the dealer for transferring title to the manufactured dwelling, which may include the payment of county property taxes;

(i) The extended warranty contract or service agreement, if any;

(j) Delivery, installation or site access charges provided by the dealer, or by a third party at the request of the dealer, that are not otherwise disclosed pursuant to this rule, if any; and

(k) If any additional costs are required for the delivery, installation or site access of a manufactured dwelling, the purchase agreement shall contain a notice that the buyer is responsible for the costs.

OFFICIAL COMMENTARY: In addition to listing the base price, the dealer should also include a list of any options, upgrades or alterations that are included in the base price.

(2) The purchase agreement shall also include the following information:

(a) The buyer's name, phone number and address;

(b) The dealer's name, the dealer's vehicle dealer certificate number issued by the Driver and Motor Vehicles Division of the Department of Transportation ("DMV") under ORS chapter 822, phone number, fax number and the name of the salesperson(s), if different than the dealer;

(c) Information that identifies and describes the manufactured dwelling including, but not limited to:

(A) Approximate date of manufacture;

(B) Make;

(C) Model and year;

(D) Serial number, if known at the time of sale;

(E) Whether the manufactured dwelling is new or used; and

(F) Approximate floor area (as defined by OAR 137-020-0505); and

(d) The delivery site for the manufactured dwelling.

(3) The manufactured dwelling dealer shall attach to each purchase agreement a list of governmental consumer protection agencies having jurisdiction over manufactured dwelling issues. The purchase agreement must contain an acknowledgement signed or initialed by the buyer indicating the buyer has received the list. The list shall be developed by the Department of Justice and made available to all dealers. The list is informational only and does not constitute legal advice. Failure by the dealer to provide the list of agencies to the buyer is an unlawful practice under ORS 646.608(1)(yy).

(4) The dealer shall give a signed copy of the purchase agreement to the buyer and shall retain a signed copy in the dealer's files for not less than seven (7) years from the date of sale. If the dealer arranges financing, the dealer shall give a signed copy of the purchase agreement to the party that makes the loan for the purchase.

(5) The dealer may use the Purchase Agreement form contained in this rule and include it as part of the dealer's sales contract. The dealer's use of this form shall be deemed to comply with this rule. If an alternate form is used by the dealer, it must comply with the requirements of this rule.

(6) Except as provided in ORS 41.740, the purchase agreement shall contain all of the terms of the contract between the buyer and the manufactured dwelling dealer. No evidence of the terms of the contract may be presented other than the contents of the purchase agreement. As used in this rule, "contract" does not include a retail installment contract or loan agreement entered into as part of the purchase transaction.

(7) The purchase agreement shall contain a notice to the buyer that:

(a) The purchase agreement is a contract between the manufactured dwelling dealer and the buyer;

(b) The purchase agreement, together with all other written terms and conditions of the sale, represents a complete and full statement of the terms of the agreement;

(c) No other terms of the agreement may be presented other than the contents of the purchase agreement and any addenda thereto; and

(d) Any oral promise or other agreement that is not set forth in the purchase agreement may not be legally enforceable.

(8) The disclosures required by this rule shall be clear and conspicuous.

(9) Nothing in this rule relieves the dealer from disclosing all other terms and conditions required by law.

(10) Failure of the dealer to use a purchase agreement form that complies with this rule is an unlawful practice under ORS 646.608(1)(yy). [Form not included. See ED. NOTE.]

[ED. NOTE: Forms referenced in this rule are available from the agency.]

Stat. Auth.: ORS 180.520(1)(c) & ORS 646.404 (2001 OL ch. 969 §3)
Stats. Implemented: ORS 646.400 to ORS 646.404 (2001 OL ch. 969) & ORS 646.608(1)(yy)
Hist.: DOJ 2-2002, f. & cert. ef. 4-15-02

137-020-0565

Landlord's Written Site Improvement Disclosure Statement

(1) Before a prospective tenant signs a rental agreement for space in a manufactured dwelling park under ORS 90.510(4), the landlord must provide the prospective tenant with a written statement that discloses the improvements that the park will require under the rental agreement, pursuant to 90.510(5). This statement is called the "site improvement disclosure statement." The site improvement disclosure statement shall be attached as an exhibit to the rental agreement. The statement must be in a form that complies with this rule. The disclosures required by this rule shall be clear and conspicuous, and shall include at least the following:

(a) A notice that the tenant has the right to select the provider (contractor) who will make the improvements;

OFFICIAL COMMENTARY: The landlord may not impose any penalty on a prospective tenant related to the selection of any particular provider. However, the landlord may impose reasonable restrictions upon the prospective tenant in selecting the provider under ORS 90.525.

(b) A statement that separately identifies each required improvement and specifies:

(A) The dimensions, major structural materials and finish to be used. The landlord may provide a set of plans or specifications to satisfy this requirement;

OFFICIAL COMMENTARY: For example, the site improvement disclosure statement for a certain park requires a "10' x 12' shed." Unless otherwise stated, the materials and construction need only comply with state and local building and structural codes and zoning standards. If the manufactured dwelling park requires other materials or a particular finish, the site improvement disclosure statement must so state.

(B) The installation charges imposed by the landlord, if paid to or collected by the landlord. If an installation fee is not disclosed, it is waived by the landlord;

(C) The installation fees imposed by government agencies, if paid to or collected by the landlord. If the landlord does not collect government fees, the landlord shall advise the prospective tenant whether such fees must be paid and identify the governmental agency to which the fees are paid;

(D) The systems development charges to be paid by the tenant, if paid to or collected by the landlord. If the landlord does not collect systems development charges, the landlord shall advise the prospective tenant whether such charges must be paid and identify the governmental agency to which the systems development charges are paid; and

(E) The site preparation requirements and restrictions, including, but not limited to, requirements and restrictions on the use of plants and landscaping; and

(c) Identification of the improvements that belong to the tenant and the improvements that must remain with the manufactured dwelling park.

(2) If the landlord fails to disclose to a prospective tenant any required site improvement(s) as required under these rules and ORS 90.510:

(a) That tenant shall not be required to make the non-disclosed site improvement(s) at any time;

(b) The space is deemed to be in compliance with the manufactured dwelling park's rules and regulations, statement of policy and rental agreement; and

(c) The landlord shall not impose any penalty on the prospective tenant for failure to make the non-disclosed site improvement(s).

(3) The manufactured dwelling park landlord may use the form provided in this rule. If an alternative form is used by the landlord, it must comply with the requirements of this rule and ORS 90.512 to 90.518.

(4) Except as provided in ORS 41.740, the site improvement disclosure statement described in this rule shall contain all of the terms relating to improvements that a prospective tenant must make under the rental agreement. There may be no evidence of the terms of the site improvement disclosure statement other than the contents of the site improvement disclosure statement.

(5) The site improvement disclosure statement shall contain a notice to the prospective tenant that:

(a) The site improvement disclosure statement represents the complete and full statement of all the improvements required to be made by the tenant under the rental agreement;

(b) The site improvement disclosure statement, together with all other terms and conditions of a rental agreement, is a contract between the manufactured dwelling park landlord and the tenant; and

(c) Any oral promise or other agreement that is not set forth in the site improvement disclosure statement may not be legally enforceable.

OFFICIAL COMMENTARY: The landlord should have the tenant sign or initial the site improvement disclosure statement and retain a signed copy in the landlord's files. [Form not included. See ED. NOTE.]

[ED. NOTE: Forms referenced in this rule are available from the agency.]

Stat. Auth.: ORS 90.516 (2001 OL ch. 282 §5) & ORS 180.520(1)(c)
Stats. Implemented: ORS 90.510 & ORS 90.512 - ORS 90.518 (2001 OL ch. 282)
Hist.: DOJ 2-2002, f. & cert. ef. 4-15-02

137-020-0600

Misrepresentation of Notarial Powers; Notice of Notarial Powers and Fees

(1) As used in this section: "Notary public" means any person certified by the State of Oregon to provide notarial services as specified by ORS 194.005 to 194.200 and 194.505 to 194.595 who is not a member of the Oregon State Bar and who is not otherwise authorized by federal law to practice, serve as a representative or appear in immigration matters.

(2) It is unfair or deceptive in trade or commerce for a notary public to make an express or implied representation of powers, qualifications, rights or privileges that the notary public does not have, including but not limited to the power to provide advice of any kind on legal or immigration matters.

(3) It is unfair or deceptive in trade or commerce for a notary public to make an express or implied representation that the notary public is a "notario publico," or a "notario," or to advertise notarial services in a language other than English, unless the representation or advertisement clearly and conspicuously includes the following in the language of the representation or advertisement and in English:

(a) A statement, "I am not licensed to practice law in the State of Oregon, and I am not permitted to give legal advice on immigration or other legal matters or accept fees for legal advice"; and

(b) The fees for notarial acts specified under ORS 194.164.

(4) It is unfair or deceptive in trade or commerce for a notary public who makes an express or implied representation that the notary public is a "notario publico," or a "notario," or who advertises notarial services in a language other than English to fail to clearly and conspicuously post a sign containing the information specified in subsection (3)(a) and (3)(b) of this rule in a publicly accessible area of the notary's place of business.

Stat. Auth.: ORS 180.520(1)(c), ORS 646.608(1)(u) & ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u) & ORS 646.608(4)
Hist.: DOJ 3-1999, f. & cert. ef. 2-18-99

Used Motor Vehicle Mediation Pilot Program

137-020-0700

Purpose

These rules implement ORS 180.095(4) by establishing the framework within which the Department of Justice shall negotiate contracts with Community Dispute Resolution Programs to carry out a pilot program testing the efficiency, effectiveness, and fairness of mediating certain disputes between dealers and their customers arising from used motor vehicle transactions. Throughout the design, implementation, and evaluation of the used motor vehicle mediation pilot program, the Department shall periodically consult with dealers, consumers, mediators, and other interested persons.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 6-2000(Temp.), f. & cert. ef. 6-15-00 thru 7-26-00

137-020-0701

Definitions

(1) "Community Dispute Resolution Program" or "CDRP" means a program that has been determined eligible for funding under ORS 36.155(1)(b) and OAR Chapter 718, Division 20.

(2) "Dealer" means a person licensed by the Oregon Department of Motor Vehicles to sell, trade, lease, display or offer for sale, trade or exchange motor vehicles or to offer to negotiate or purchase motor vehicles on behalf of third parties. "Dealer" does not include a security interest holder as shown by the vehicle title issued by any jurisdiction or any person excluded by ORS 822.015(1) to (4) or ORS 822.015(6) to (9).

(3) "Department" means the Oregon Department of Justice.

(4) "Mediation" means a voluntary process in which a mediator assists and facilitates two or more parties to a controversy in reaching a mutually acceptable resolution of the controversy.

(5) "Motor vehicle" means any self-propelled vehicle normally obtained for personal, family or household purposes. "Motor vehicle" does not include aircraft.

(6) "Used motor vehicle" means any motor vehicle that has been previously delivered to any person for his or her discretionary use for personal or business purposes and for more than a try-out before a contemplated purchase or preparation for sale.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 6-2000(Temp.), f. & cert. ef. 6-15-00 thru 7-26-00

137-020-0702

Standards and Guidelines for Mediation

(1) No dealer or consumer will be compelled to participate in mediation.

(2) The Department shall select matters that are eligible for the pilot program from complaints submitted to it in writing. The Department may apply the following factors in determining the eligibility of a matter. An allegation is eligible unless, in the Department's sole and unreviewable discretion, the allegation:

(a) Involves a business that is already the object of an ongoing investigation or civil or criminal prosecution; or

(b) Involves a practice that appears to the Department to be criminal and continuing; or

(c) Is another iteration of a pattern of the same conduct exhibited by the same business; or

(d) Involves a business or consumer located at such a distance from a participating CDRP that it would be impractical for the dispute to be mediated by that CDRP; or

(e) Involves conduct by an unlicensed dealer.

(3) The Department shall select at least two CDRP's to participate in the pilot program. At least one shall be in Southern Oregon and at least one shall be in the Portland Metropolitan area. The Department and the participating CDRP's shall enter into written agreements specifying the relative duties of the CDRP and the Department. The agreements shall comply with Oregon laws concerning the confidentiality of mediation communications.

(4) When the Department determines that a complaint is eligible for referral to the pilot program, the Department shall:

(a) Notify the complainant and the business in writing;

(b) Send the participating CDRP the complainant's written submission and an instructional packet describing relevant state and federal laws relating to used motor vehicle transactions and general information about the used motor vehicle industry. The Department and the participating CDRP's, in consultation with dealers, shall create the instructional packet.

(5) According to the terms of its agreement with the Department, the participating CDRP shall develop the case, conduct any mediation that may be required, and provide all reports required by the participating CDRP and the Department. However, confidential mediation documents used by the mediator shall remain the property of the mediator or the participating CDRP and shall not be subject to the control of the Department.

(6) The mediator in mediations conducted as part of this pilot program:

(a) Shall not represent the interests of any of the parties or offer legal advice.

(b) Shall not act as a judge or an arbitrator and shall have no decision making power to impose a settlement on the participants or to render decisions.

(c) Shall not give legal advice, nor will he or she provide legal counsel to the parties.

(d) Shall disclose any pre-existing relationships or conflicts of interest at the earliest possible convenience.

(e) Shall not be an employee or agent of any party to the mediation.

(f) May require that participants review documents submitted by the mediator or the CDRP and may require the participants to provide information to the mediator before participating in a mediation session.

(7) Attorneys shall not accompany participants into mediation sessions conducted as part of this pilot program. Participants in the mediation are free to consult with an attorney at any time, other than in a mediation session.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 6-2000(Temp.), f. & cert. ef. 6-15-00 thru 7-26-00

137-020-0703

Mediator Qualifications and Training

(1) Minimum Qualifications and Training. Every mediator assigned by a CDRP to participate in this pilot program shall meet or exceed:

(a) The minimum qualifications and training requirements for mediators in CDRP's established by the Oregon Dispute Resolution Commission in OAR 718-020-0070; and

(b) Any additional qualifications and training requirements established by the participating CDRP.

(2) Additional Qualifications and Training. The Department shall develop a training program for mediators who will participate in this pilot program. In addition to the minimum qualifications and training required under section (1) above, mediators assigned by a participating CDRP to participate in this pilot program shall complete to the satisfaction of the participating CDRP a course of education describing the basic legal principles applicable to common disputes about used motor vehicle transactions. The materials will also include basic information about the used motor vehicle industry.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 6-2000(Temp.), f. & cert. ef. 6-15-00 thru 7-26-00

137-020-0704

Costs of Participation, Collection of Data

(1) Neither the dealer nor the consumer shall be required to make any payment to anyone for participation in the pilot program.

(2) The Department may enter into an interagency agreement with the Oregon Dispute Resolution Commission for the collection and analysis of data concerning the efficiency, effectiveness, and fairness of the pilot program.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 6-2000(Temp.), f. & cert. ef. 6-15-00 thru 7-26-00

137-020-0705

Purpose

These rules implement ORS 180.095(4) by establishing the framework within which the Department of Justice shall negotiate contracts with Community Dispute Resolution Programs to carry out a pilot program testing the efficiency, effectiveness, and fairness of mediating certain disputes between dealers and their customers arising from used motor vehicle transactions. Throughout the design, implementation, and evaluation of the used motor vehicle mediation pilot program, the Department shall periodically consult with dealers, consumers, mediators, and other interested persons.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 10-2000, f. & cert. ef. 8-14-00

137-020-0707

Definitions

(1) "Community Dispute Resolution Program" or "CDRP" means a program that has been determined eligible for funding under ORS 36.155(1)(b) and OAR Chapter 718, Division 20.

(2) "Dealer" means a person licensed by the Oregon Department of Motor Vehicles to sell, trade, lease, display or offer for sale, trade or exchange motor vehicles or to offer to negotiate or purchase motor vehicles on behalf of third parties. "Dealer" does not include a security interest holder as shown by the vehicle title issued by any jurisdiction or any person excluded by ORS 822.015(1) to (4) or ORS 822.015(6) to (9).

(3) "Department" means the Oregon Department of Justice.

(4) "Mediation" means a voluntary process in which a mediator assists and facilitates two or more parties to a controversy in reaching a mutually acceptable resolution of the controversy.

(5) "Motor vehicle" means any self-propelled vehicle normally obtained for personal, family or household purposes. "Motor vehicle" does not include aircraft.

(6) "Used motor vehicle" means any motor vehicle that has been previously delivered to any person for his or her discretionary use for personal or business purposes and for more than a try-out before a contemplated purchase or preparation for sale.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 10-2000, f. & cert. ef. 8-14-00

137-020-0709

Standards and Guidelines for Mediation

(1) No dealer or consumer will be compelled to participate in mediation.

(2) The Department shall select matters that are eligible for the pilot program from complaints submitted to it in writing. The Department may apply the following factors in determining the eligibility of a matter. An allegation is eligible unless, in the Department's sole and unreviewable discretion, the allegation:

(a) Involves a business that is already the object of an ongoing investigation or civil or criminal prosecution; or

(b) Involves a practice that appears to the Department to be criminal and continuing; or

(c) Is another iteration of a pattern of the same conduct exhibited by the same business; or

(d) Involves a business or consumer located at such a distance from a participating CDRP that it would be impractical for the dispute to be mediated by that CDRP; or

(e) Involves conduct by an unlicensed dealer.

(3) The Department shall select at least two CDRP's to participate in the pilot program. At least one shall be in Southern Oregon and at least one shall be in the Portland Metropolitan area. The Department and the participating CDRP's shall enter into written agreements specifying the relative duties of the CDRP and the Department. The agreements shall comply with Oregon laws concerning the confidentiality of mediation communications.

(4) When the Department determines that a complaint is eligible for referral to the pilot program, the Department shall:

(a) Notify the complainant and the business in writing;

(b) Send the participating CDRP the complainant's written submission and an instructional packet describing relevant state and federal laws relating to used motor vehicle transactions and general information about the used motor vehicle industry. The Department and the participating CDRP's, in consultation with dealers, shall create the instructional packet.

(5) According to the terms of its agreement with the Department, the participating CDRP shall develop the case, conduct any mediation that may be required, and provide all reports required by the participating CDRP and the Department. However, confidential mediation documents used by the mediator shall remain the property of the mediator or the participating CDRP and shall not be subject to the control of the Department.

(6) The mediator in mediations conducted as part of this pilot program:

(a) Shall not represent the interests of any of the parties or offer legal advice.

(b) Shall not act as a judge or an arbitrator and shall have no decision making power to impose a settlement on the participants or to render decisions.

(c) Shall not give legal advice, nor will he or she provide legal counsel to the parties.

(d) Shall disclose any pre-existing relationships or conflicts of interest at the earliest possible convenience.

(e) Shall not be an employee or agent of any party to the mediation.

(f) May require that participants review documents submitted by the mediator or the CDRP and may require the participants to provide information to the mediator before participating in a mediation session.

(7) Attorneys shall not accompany participants into mediation sessions conducted as part of this pilot program. Participants in the mediation are free to consult with an attorney at any time, other than in a mediation session.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 10-2000, f. & cert. ef. 8-14-00

137-020-0711

Mediator Qualifications and Training

(1) Minimum Qualifications and Training. Every mediator assigned by a CDRP to participate in this pilot program shall meet or exceed:

(a) The minimum qualifications and training requirements for mediators in CDRP's established by the Oregon Dispute Resolution Commission in OAR 718-020-0070; and

(b) Any additional qualifications and training requirements established by the participating CDRP.

(2) Additional Qualifications and Training. The Department shall develop a training program for mediators who will participate in this pilot program. In addition to the minimum qualifications and training required under section (1) above, mediators assigned by a participating CDRP to participate in this pilot program shall complete to the satisfaction of the participating CDRP a course of education describing the basic legal principles applicable to common disputes about used motor vehicle transactions. The materials will also include basic information about the used motor vehicle industry.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 10-2000, f. & cert. ef. 8-14-00

137-020-0713

Costs of Participation, Collection of Data

(1) Neither the dealer nor the consumer shall be required to make any payment to anyone for participation in the pilot program.

(2) The Department may enter into an interagency agreement with the Oregon Dispute Resolution Commission for the collection and analysis of data concerning the efficiency, effectiveness, and fairness of the pilot program.

Stat. Auth.: ORS 180.095(4)
Stats. Implemented: ORS 180.095(4)
Hist.: DOJ 10-2000, f. & cert. ef. 8-14-00

Mortgage Loan Servicing

137-020-0800

Definitions

As used in this rule and OAR 137-020-0805:

(1) “Borrower” means an individual who is obligated to repay a loan under a residential mortgage loan agreement, and includes the individual's spouse, domestic partner, and heirs;

(2) “Good faith” means honesty in fact and the observance of reasonable standards of fair dealing;

(3) “Mortgage loan servicer” means a person engaging in the servicing of residential mortgage loans in this state and includes a person who makes or holds a mortgage loan if the person is the holder of the mortgage servicing rights or has been delegated servicing functions for the mortgage loan;

(4) “Residential mortgage loan” means a loan to a natural person made primarily for personal, family or household use, other than a loan for open-end credit, as that term is defined in 12 CFR 1026.2(a)(20), as in effect on December 30, 2011, secured by a mortgage or other consensual security interest on residential real property located in this state;

(5) “Servicing of residential mortgage loans” includes, but is not limited to:

(a) Collecting or remitting, or having the right or obligation to collect or remit, for a lender, note owner, note holder or other holder of an interest in a note, payments, interest, principal and trust items, including but not limited to hazard insurance and taxes, on a residential mortgage loan in accordance with the terms of the loan, and includes loan payment follow-up, delinquency loan follow-up, loan analysis and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing;

(b) Bringing and maintaining a suit or action to collect amounts owed on a residential mortgage loan, including but not limited to exercising contractual, statutory or common law remedies such as injunction, specific performance, judicial or nonjudicial foreclosure or receivership; and,

(c) Taking action for the purpose of protecting the lender's, note owner's, note holder's or other owner of an interest in the note's interest in the property and rights under the security instrument.

"Servicing of residential mortgage loans" does not include the activities of any person licensed or authorized to act as an attorney, escrow agent, title company, or title insurer under Oregon law, or any person qualified to serve as a trustee under ORS 86.790.

(6) “Person” has the meaning provided in ORS 646.605(4); and,

(7) “Residential real property” means real property located in this state improved by a one-to-four family residence or residential unit in a building used or occupied, or intended to be used or occupied, wholly or partly, as the primary residence of the borrower, but shall not refer to unimproved real property upon which such dwellings are to be constructed.

Stat. Auth.: ORS 646.608(4)
Stats. Implemented.: ORS 646.608(1)(u) & (4)
Hist.: DOJ 2-2012(Temp), f. & cert. ef. 1-27-12 thru 7-24-12; Suspended by DOJ 4-2012(Temp), f. & cert. ef. 2-15-12 thru 7-24-12; DOJ 12-2012, f. 7-23-12, cert. ef. 7-24-12

137-020-0805

Unfair and Deceptive Acts in Mortgage Loan Servicing

A mortgage loan servicer engages in unfair or deceptive conduct in trade or commerce if the mortgage loan servicer:

(1) Assesses a late fee or delinquency charge for a full payment made on or before the payment's due date or within the grace period applicable for the payment;

(2) Assesses or collects any default-related fee or charge that the servicer is not legally authorized to assess or collect under the terms of the residential mortgage loan, deed of trust, or mortgage;

(3) Misrepresents to a borrower any material information regarding a loan modification;

(4) Misrepresents any information set forth in an affidavit, declaration, or other sworn statement detailing a borrower's default and the servicer's right to foreclose;

(5) Fails to comply with the requirements of the following provisions of the Real Estate Settlement Procedures Act of 1974, as in effect on January 1, 2012: 12 USC 2605(b), 12 USC 2605(c), 12 USC 2605(d), or 12 USC 2605(e); or,

(6) Fails to deal with a borrower in good faith.

Stat. Auth.: ORS 646.608(4)
Stats. Implemented: ORS 646.608(1)(u) and (4)
Hist.: DOJ 4-2012(Temp), f. & cert. ef. 2-15-12 thru 7-24-12; DOJ 12-2012, f. 7-23-12, cert. ef. 7-24-12

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