LDF Files Suit to Protect Consumers from Unfair Deals in City Ghettoes

    Presiden 

Hon. Francis E. Rivers 
PRESS RELEASE Director Counsel 

egal efense und = FoR RELEASE dack Croeabers 
Di , Public Relations 

NAACP LEGAL DEFENSE AND EDUCATIONAL FUND, INC. | THURSDAY Ses Devons, 3e 
10 Columbus Circle, New York, N.Y. 10019 * JUdson 6-8397 JANUARY 11, 1968 NIGHT NUMBER 212-749-8487 

LDF FILES SUIT TO PROTECT CONSUMERS 
FROM UNFAIR DEALS IN CITY GHETTOES 

Major Finance Company Attacked for its Part in Consumer Fraud 

NEW YORK---A major attack on consumer frauds was launched this morning 
by attorneys of the NAACP Legal Defense and Educational Fund, Inc. 
(LDF) with a suit against the Coburn Credit Co., a major interstate 

financing company. 

The Coburn Credit Co. is charged with buying a contract froma "“fly- 
by-night" carpeting firm, which sold wall-to-wall carpeting to poor 
tenants in low income housing projects at prices "so high in relation 
to the carpet as to render the contract unconscionable within the 
meaning of the Uniform Commercial Code." 

According to the LDF attorneys, on September 9, 1965 a salesman repre- 
senting himself as an agent of the Great Northern Carpet Corp. came 
to Marcel Hill, a tenant in a low rent public housing in Bronx county, 
and persuaded her to buy wall-to-wall carpeting for three small rooms 

of her apartment. 

"Phe salesman persuaded the plaintiff to sign a contract to purchase 
this carpeting at a price of $920.00, pius $237.57 service charge, 
plus $13.35 credit life insurance, plus $31.76 property insurance, for 
a total of $1,202.68, to be in equal monthly installments," said the 
attorneys. 

Mrs. Hill lives with her daughter and has a yearly income of about 
$2,281.00. 

“The salesman," continued the attorneys, “assured Mrs. Hill that as 
a term of this contract, the company would service her carpet for 

twenty-five years." 

However, the attorneys claim that within a year from the date of sale 
the carpeting company went out of business. 

Immediately after the sale to Mrs. Hill the carpet company assigned 
the contract to the Coburn Credit Co. This situation, argues LDF 
attorney Leroy Clark, leaves the credit company in a position of 
"enjoying all the privileges and none of the responsibilities that go 
with the contract." 

Specific charges include: 

* before buying the contract the credit company did not ascertain 
that the seller was reputable, honest, and sufficiently 
capitalized, and that it sold goods only on conscionable terms. 

the contract contained an insufficient description of goods 
sold 

* not all the printed portion of the contract was in eight-point 
type 

* the contract did not contain all of the terms agreed to, in 
that it omitted the service warranty. : 

Because of the close working relationship between the seller and the 
credit company with respect to this contract, the LDF attorneys argue 
that the defendant is responsible for the seller's contractual obli- 
gations now that the seller has gone out of business. 

"If we win this case on the merits," asserts attorney Clark, "credit 
companies will no longer be able to hide behind a mask of innocence, 
but will be required to investigate the companies they do business 
Bee and ascertain that those companies are dealing fairly with the 
public." 

<@20ther LDF attorneys working on this case with Mr. Clark are Director- 
Counsel Jack Greenberg and Philip Schrag of New York City. 

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