Federated Department Stores, Inc.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 9823525]

Federated Department Stores, Inc.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the draft

complaint that accompanies the consent agreement and the terms of the

consent order--embodied in the consent agreement--that would settle

these allegations.

DATES: Comments must be received on or before August 6, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159,600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Randall Brook, Seattle Regional

Office, Federal Trade Commission, 915 Second Avenue, Suite 2896,

Seattle, Wa. 98174, (206) (220-4487.

SUPPLEMENTARY INFORMATION: Purusant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of

the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby given

that the above-captioned consent agreement containing a consent order

to cease and desist, having been filed with and accepted, subject to

final approval, by the Commission, has been placed on the public record

for a period of sixty (60) days. The following Analysis to Aid Public

Comments describes the terms of the consent agreement, and the

allegations in the complaint. An electronic copy of the full text of

the consent agreement package can be obtained from the FTC Home Page

(for May 28th, 1999), on the World Wide Web, at ``http://www.ftc.gov/

os/actions97.htm.'' A paper copy can be obtained from the FTC Public

Reference Room, Room H-130, 600 Pennsylvania Avenue, N.W., Washington,

D.C. 20580, either in person or by calling (202) 326-3627.

Public comment is invited. Comments should be directed to: FTC/

Office of the Secretary, Room 159,600 Pennsylvania Avenue, N.W.,

Washington, D.C. 20580. Two paper copies of each comment should be

filed, and should be accompanied, if possible, by a 3\1/2\ inch

diskette containing an electronic copy of the comment. Such comments or

views will be considered by the Commission and will be available for

inspection and copying at its principal office in accordance with

Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR

4.9(b)(6)(ii).

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission has accepted an agreement to a

proposed consent order from Federated Department Stores, Inc.

(``Federated''). Proposed respondent Federated conducts relevant

business through, among other affiliates or subsidiaries, FDS National

Bank, The Bon, Inc., Bloomingdales, Inc., Burdines, Inc., Rich's

Department Stores, Inc., Macy's East, Inc., Macy's West, Inc., and

Stern's Department Stores, Inc.

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action or make

final the agreement's proposed order.

The Commission's complaint alleges several unfair or deceptive acts

or practices related to Federated's policy of inducing consumers who

have filed for bankruptcy protection to sign agreements reaffirming

debts owed to Federated prior to the filing of the bankruptcy petition.

The complaint charges that Federated: falsely represented to consumers

that signed reaffirmation agreements would be filed with the bankruptcy

courts, as required by the United States Bankruptcy Code; falsely

represented to consumers that debts associated with unfiled

reaffirmation agreements, or agreements that were filed but not

approved by the bankruptcy courts, were legally binding on the

consumers; and unfairly collected debts that it was not permitted by

law to collect.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent Federated from engaging in

similar acts in the future. The proposed consent order preserves the

Commission's right

[[Page 30329]]

to seek consumer redress if the Commission determines that redress to

consumers provided through related legal actions by state attorneys

general and private parties is not adequate.

Part I of the proposed order prohibits Federated from

misrepresenting to consumers who have filed petitions for bankruptcy

protection under the United States Bankruptcy Code that (A)

reaffirmation agreements will be filed in bankruptcy court; or (B) any

reaffirmation agreement is legally binding on the consumer. Part I.C of

the proposed order prohibits Federated from collecting any debt

(including any interest, fee, charge, or expense incidental to the

principal obligation) that has been legally discharged in bankruptcy

proceedings and that Federated is not permitted by law to collect. Part

II of the proposed order prohibits Federated from making any

misrepresentation in the collection of any debt subject to a pending

bankruptcy proceeding.

Part III of the proposed order contains record keeping requirements

for materials that demonstrate the compliance of Federated with the

proposed order. Part IV requires distribution of a copy of the consent

decree to certain current and future personnel who have

responsibilities related to collecting debts subject to bankruptcy

proceedings.

Part V provides for notification to the Commission of any change in

the respondent affecting compliance obligations arising under the

order. Part VI requires the filing of compliance report(s). Finally,

Part VII provides for the termination of the order after twenty years

under certain circumstances.

The purpose of this analysis is to facilitate public comment on the

proposed order, and it is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 99-14247 Filed 6-4-99; 8:45 am]

BILLING CODE 6750-01-M