Write Corp., the Betty

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IN THE MATTER OF G. FRED STAYTON AND THE BETTY WHITE CORPO- RATION COMPLAINT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 20, 1914 Dorkct 2856. Complaint, June 29, 1936--Decision, Oct. 20, 19:lG \Vhere a corporation and an individual, president thereof and theretofore similarly occupied as president of two similarly engaged preceding corporations prior to their respective dissolution, engaged iu dh;tribution :md sale of a line of toilet preparations, cosmetics, and beauty preparations, consisting of some twenty-nine different items and sold under the name of ''Betty 'White" products, and likewise engaged, in connection with the conduct of such business, in conducting and advertising prize contests in various papers and magazines of general circulation throughout the several States, directed to promoting the sale of such preparations- (a) Represented, in their so-called contact advertising describing said contests, ln the form, generally, of full-page advertisements on the back cover page or inside back cover page of papers and magazines of general circulation, in many cases, among the several States, that a pcr~on soh ing a prolllem or puzzle there presented and senuiJ·g in solution, wou111, without being required to make any other substantial effort, be given a prize or awaru, and that the mere mailing of a correct solution would be suffi. ient to win a prize, and that a contestant in such puzzle or problem contest was not required to pay any money, and falsely purported in their advertising to disclose all of the terms and conditions that must be met by the contestant, and actually set out therein a portion only of such terms and condition~'!, Without stating such fact, through such statements, among numerous others, as "Send answer quick, and we wlll tell you how the winner gets $12::;0 cash for promptness," "Send no money-just mail coupon," "Remember, send not one penny with your answer. All you do now is to find ten face' it you can and mail the coupon. Send answer right away. Three prominent and reliable judges will see that the prizes are awarded honestly and promptly. • • • Over 100 grand prizes in all and many special prizes. PmzE Money Now IN BANK. • • • Just mark the faces you find and send with the coupon right away. Don't you want the opportunity to win $2,250.00 First Grand Prize? • • • Don't delay. Do it today"; lhe facts being that such contact advertisements did not disclose the requirement of purchases from, and sales of, their preparations as a necessity for the prize-winning, notwithstanding fact such purchases and sales constituted primary purpose and requisite of the contest, and first information of such requirement was disclosed in the rules enclosed with answers sent to all those replying to such contact advertisement, before any mouey was sent to the company by any one, on the letterhead of said corporation 658 FEDERAL TRADE COM:MISSION DECISIONS Complaint 23 F. '.r. C. and over the signature of said individual lis president, addsing contestant about the toilet and beauty preparations, and containing a number of alluring enclosures of "Certificate of Awarn for 100,000 Auto Votes." printed in simulation of a money coupon, with "$2,250.00" printed at each of the four corners, and advising recipient that among the "Just 3 Things To Do and the Money will be in Yom· Hands" was to "1. Send the enclosed Buick Prize Blank promptly with $2.00 for the Dig Six Bargain Assortment nud you get 200,000 more Auto Vot(\s at oure," and other "come-on" statements and devices of similar tenor; and (b) Made use thereafter of form letters, filled in with the names of individ· ual contestants, and intended to gi\·e the impression that they were individual letters, and that the recipient was in an unusually favorable position in the contest, and that certain credits which were given or oftered at ditrcrent st11ges of the contest gave the recipient substantial advanced standing, and that the contestant addressed, was in an advanced position over many others in the contest, and encouraging such contestant to increaile his efforts to win a prize, and requiring him to send a further order and awarding him a so-called diploma, and including sucll statement;! as "It makes me very happy to acknowle<lge receipt of your third order and to send you the enclosed Official Auto Vote Cet·tificate showing your score of 1,020,000 Auto Votes," "You have qualified for the SPECJ:A.L $150.00 CASH PROMPTNESS PRIZE," "I have been watching your goo<l world in the contest and I am promoting you to th~ STAR Booster Club," and "I arn sending you another order bluuk on which you can get 500,000 EXTRA FRI$ AUTO VOTES";

With the rcsnlt that lly rrnson of said plan and methods, inelm1ing Rllid advel'· tis(\ments, numerom; form lett(\rH, system of votes, etc., the primary pur· pose and etrect of which was to encourage contestants to sell the products In question for said company, a substantial number of the consuming public bought a substantial Volume of their preparations, and thus unfairly diverted a substantial volume of trade and business to them which would otherwise have gone to competitors who did not use such unfair methode: Held, That such acts and practices were to the prejudice of the public and competitors, and constituted unfair methods of competition. Mr. 1Vm. T. Ohantland for the Commission.

Pcrrrish, Guthrie, lVatters & Oolfleser, of Des Moines, Iowa, for respondents.

Complaint Pursuant to the provisions of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,'' the Federal Trade Commission, having reason to believe that G. Fred Stayton, and the Betty White Corporation have been and are now using unfair methods of competition in commerce as defined by said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its com· plaint, stating its charges in that respect as follows: G. FRED STAYTON ET AL. 659· 657 Complaint PARAGRAPH 1. Respondent G. Fred Stayton is now president, general manager, treasurer, and secretary of the Betty 'Vhite Corporation. He was formerly president of the Paramount Products, Inc.,.. and of the Paramount Products Company. The Betty White Corporation is a corporation incorporated under the laws of the State of Iowa, with main office and principal place of business at 1912 Grand Avenue, Des Moines, Iowa. Respondents are now and have been for some time engaged in the business of distributing and selling in. cotnll1erce, as herein set out, toilet preparations, cosmetics, and beauty preparations. The present line is known and sold under the nameof "Betty 'Vhite" products and consists of some twenty-nine different items.

PAR. 2. Said respondents, being engaged in· business as aforesaid,. cause said preparations, when sold, to be transported from their place of business in the State of Iowa to the purchasers thereof located at various points in States of the United States other than the· State from which shipments are made. Tiespondents now maintain. a constant current of trade in commerce in said preparations, distributed and sold by them, between and among the various States of the United States.

PAR. 3. In the course and conduct of their said business, respondents. are now and have been in substantial competition with other individuals and with firms and c9rporations likewise engaged in thebusiness of distributing and selling cosmetics, toilet and beauty preparations, in commerce among and between the various States of the United States.

In the course and operation of said business and for the purpose· of inducing purchase of said preparations, said G. Fred Stayton formerly operated personally and through and under the name of an Iowa corporation, Paramount J>roducts Company, which was legally dissolved prior to October 18, 1935, and an Iowa corporation, Paramount Products, Inc., 'which was legally dissolved as of October 26,. 1935. Thereafter and until the present time said Stayton and his, associates have carried on said commerce personally and through and Under the name of the Betty White Corporation. Throughout the· continuance of said business and commerce respondents, as an essential part of their business, have conducted purported puzzle contests. and, in connection therewith, have carried advertisements of such contests and of their preparations put out under various names in Various papers and magazines having a general circulation throughout the several States of the United States. Continuously during the course of its business and as a part thereof, respondents hare made 7803:i'"-3fl-vol. 23-H FEDERAL TRADE COMMISSION DECISIONS 6GO Complaint 23 F. T. C. false and fraudulent representations in their said advertising, especially as carried on in connection with the purported contest schemes. Said respondents, Stayton and associates, personally and through and under the name of a newly formed corporation, respondent Uetty "White Corporation, continued and still continue to carry on said business under substantially the same plan and methods and with the same or similar advertising as were used by them under former designations. Respondents' present advertising is generally in the form of full page advertisement on the back cover page or inside back cover page of such papers and magazines of general circulation among the several States.

Said purported puzzle contest advertisements are generally identical or similar in form and substance. Among the false and misleading representations contained in such advertisements and the resulting correspondence are those to the effect or which carry the implication- (1) That a first grand prize of a sedan automobile will be given to the winner and an additional $1,250 in cash, or, if preferred, a total of $2,250 will be given if the winner is the first person sending in the correct o.nswer.

(2) That no money is required.

(3) That the only requirement to win a prize is prompt solution of the puzzle. In no place does the contest advertisement disclose the requirement of purchases from and sales of respondents' preparations as a. necessity for the prize winning, when in fact such purchases and sales constitute the primary purpose and requisite. ( 4) That the advertisement for persons to enter the contest is that of an individual and not that of a company or of a concern having merchandise for sale.

(5) That offers made are exclusively to the individual addressed and that such individual has been selected for special individual favor or has been granted exclusive advantage in the contest. (6) That certain credits given or offered at different stages ,of the contest in large figures give the recipient substantial advanced standing.

(7) That letters written to contestants and prospective customers are purely personal to the one addressed.

(8) That a contestant is in an advanced position over all others in the contest and has only a little remaining to do in order to win. (9) That the person addressed is practically sure to be a winner of the first or one of the grand prizes.

Solving the advertised purported puzzle does not qualify any contestant to win any prize. Prize winning is dependent entirely G. FRED STAYTON ET AL. 661 657 Complaint upon purchasing and selling large quantities of respondents' products, and respondents' advertisements are deceptive, misleading and unfair in that they fail fully or at all to disclose that prizes can be Won only"by purchasing and selling large quantities of respondents' Products and paying respondents therefor.

In addition to said advertisements, respondents carry on an extensive follow up, "come on" and inducing correspondence relating to the purported puzzle contests, the primary purpose and effect of Which is to have the numerous innocent and unsuspecting contestants become sales people for respondents. To heighten the zeal of said supposed contestants and to induce them to increase their sales activity of respondents' products, respondents have a series of form letters made up to appear as though individual, which set forth increasingly the near certainty or certainty that each recipient contestant will Win large money and other prizes of great value by making one or two more sizable sales. A system of votes constitutes a part of said scheme. Contestants are led to believe that they are among the few leaders in the contest with increasing emphasis as the contest sup- Posedly nears its close. These letters are form letters and are in and of themselves frauds and misrepresentations in that all contestants are not in an identical favorable position as stated in the letters.

The whole plan is primarily not a puzzle contest at all, but the "Whole plan and method constitutes and is unfair competition intended to and resulting in the procurement by such deception and misrepresentations of a large sales force to sell respondents' products. Said plan and methods are unfair to all those who are engaged in selling in interstate commerce similar products who do not employ such false and misleading representations and plan and method, and tend unfairly to divert trade to respondents from such competitors "Who do not employ such deceptive plan and method. Respondents claimed recently to have thus induced 23,000 of such supposed contestants to become sales people of their products as a result of said llnfair methods.

PAn. 4. As a result of said respondents' false and misleading representations, plans and methods as above set out, a substantial number of the consuming public have purchased a substantial volume of res~ondents' preparations with the result that trade has been unfairly d~verted to respondent from individuals, firms, and corporations like- . '"1se engaged in the business of distributing and selling similar prod- Ucts in interstate commerce who do not promote or attempt to promote the sale thereof by false and misleading representations, plans, or me:\ods. As a result thereof substantial injury has been and is 662 FEDERAL TRADE COJ\Il\IISSION DECISIONS Findings 23F.T.C.

now being done by respondents to competitors in commerce among and between the various States of the United States. PAR. 5. The above and foregoing acts, practices, and r.epresenta· tions of the respondents have been, and are, all to the prejudice of the public and respondents' competitors as aforesaid, and have beent and are, unfair methods of competition within the meaning and intent of Section 5 of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." REPORT, FINDINGS AS TO THE FACTs, AND Order Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commis· sion, to define its powers and duties, and for other purposes," the Federal Trade Commission on the 29th day of June 1936 issued and served its complaint in this proceeding upon said respondents, G. Fred Stayton and the Betty White Corporation, charging them with the use of unfair methods of competition in commerce in violation of the provisions of said act. On July 17, 1936, the respondents filed. their answer in this proceeding. Thereafter a stipulation was entered into whereby it was stipulated and agreed. that a statement of facts signed and executed by the respective respondents and W. T. Kelley~ Chief Counsel for the Federal Trade Commission, subject to the approval of the Commission, may be taken as the facts in this proceed· ing and in lieu of testimony in support of the charges stated in the· complaint, or in opposition thereto and that the said Commission may proceed upon said statement of facts to make its report, stating itsfindings as to the facts and its conclusion based thereon and enter its order disposing of the proceeding without the presentation of argu· ment or the filing of briefs. Thereafter this proceeding: regularly came on for final hearing before the Commission on said complaint, answer and stipulation, said stipulation having been approyed and accepted, and the Commission having duly considered the same and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes its finding as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO TIIE FACTS PARAGRAPH 1. Respondent, G. Fred Stayton, is now the presidentr general manager, treasurer, and secretary of the Betty White Cor· poration. He was formerly president of the Paramount Product:E, Inc., and of the Paramount Products Company. G. FRED STAYTON ET AL. 663 lli:i7 Findings PAR. 2. Respondent, Betty White Corporation, is a corporation incorporated under the laws of the State of Iowa, with its main office and principal place of business at 1912 Grand Avenue, Des Moines, Iowa, and was at the time of the issuance of such complaint, and had been for some time theretofore, engaged in the business of distributing and selling in commerce, toilet preparations, cosmetics, and beauty preparations. The present line of such products is known and sold Under the name of "Betty ·white" products and consists of some twenty-nine different items.

PAR. 3. The said respondents being engaged in business as aforesaid, caused said "Detty 'Vhite" preparations when sold to be shipped and distributed from the place of business in the State of Iowa to the purchasers of such goods located at various points in States of the United States other than the State of Iowa from which shipments ~re made, as well as at points in the State of Iowa. At the date of the Issuance of said c01nplaint a constant current of trade in commerce was maintained in said preparations so distributed and sold between and among the various States of the United States. PAR. 4. In the course and conduct of said business, the Betty White Corporation was, at the date of the issuance of said complaint, in s~bstantial competition with other individuals, firms, and corpora.hons likewise engaged in the business of distributing and selling cosmetics, toilet, and beauty preparations in commerce among and between the various States of the United States. PAR. 5. Prior to the organization of respondent Betty White Corporation, G. F. Stayton was the president of Paramount Products Company, an Iowa corporation, which was dissolved in accordance with the laws of Iowa on February 2, 1934. He was also president of Paramount Products, Inc., an Iowa corporation organized February 7! 1934, and dissolved on October 26, 1935. The Betty 'Vhite Corporation was organized under the laws of the State of Iowa on August 30, 1935. All of such corporations were engaged in the distributing and 'Selling of cosmetics, toilet, and beauty preparations among and between the various States of the United States. Throughout the continuance of the conduct of the business of Paranlount Products Company, Paramount Products, Inc., and Betty White Corporation, a part of their business was the conducting of Prize contests, and in connection therewith advertisements of such ~ontests and of Detty White preparations have been carried in various Papers and magazines having a general circulation through the several States of the United States.

COl\IMISSIO~ DECISIONS664 FEDERAL TRADE Findings 23 F.T.C. PAR. 6. The advertising of Betty White Corporation is generally in the form of full page advertisements on the back cover page or inside back cover page of papers and magazines, many o:f which are o:f general circulation among the several States. Such advertisements are generally identical or similar in :form. Such advertisements and succeeding literature contain statements to the effect that a first grand prize o:f $2,250 all in cash, or if pre· felted a sedan automobile and an additional $1,250 in cash, as a promptness prize, would be awarded the winner. These advertise· ments also contain the following language : "Send answer quick and we will tell you how the winner gets $1,250 cash for promptness"; "Send your answer quick. Don't delay. There is a $1,250 cash prize for promptness if declared first prize winner."

PAR. 7. Such advertisements contain the statement that no money is required, typical text containing or relative to 'such statements are the :following:

"Send no money-just mail coupon," (printed in red in large heavyfaced type across the middle of the page of each advertisement) "Remember send not one penny with your a11Swer. All you do now is to find ten faces if you can and mall the coupon. Send answer right away. Three prominent and reliable judges will see that the prizes are awarded honestly and promptly. Thousands of dollars in special cash awards. Over 100 grand prizes in all and many special prizes."

• • • • • ''PRIZEl MONEY NOW IN DANK The money to pay every prize is on deposit in the big, Btrong Des lrfoineS$1,250.00 Bank. You take no risl;:, If you are de- Cash clared first prize winner. Hurry I JustSend answer quick and we mark the faces you find and send with the will tell you how the winner coupon right away. Don't you want the gets $1,250.00 cash opportunity to win $2,250.00 First Grand FOR Prize? Someone wins on our plan-maybePROMPTNESS you. Mail your answer quick. Don't de· lay. Do it today."

(Underscored words printed In black-faced type) ; "Remember, send not one penny with your answer. You risk no money, and it costs only a postage stamp to send your answer, according to our plan, getting the opportunity to win $2,250.00 all cash, if prompt."

Some of these so-called contact advertisements are signed "G. F. Stayton, President" and others, "Betty White Corporation." G. FRED STAYTO~ ET AL. 665 657 Findings PAR. 8. The contact advertisement does not disclose the requirement of purchases from, and sales of, respondents' preparations a,; a necessity for the prize winning, when in fact such purchases and sales constitute the primary purpose and requisite of such contest. T.he first information of requirement of purchases from, and sales of, respondents' preparations is disclosed in the rules enclosed with the answers which are sent to all persons that answer the contact advertisement, before any money is sent to the company by any such person.

The form two page answer to those who send in one of the purported puzzle solutions is on the letterhead of the "Betty ·white Corporation-Fine Toilet and Beauty Preparations", and is signed by "G. F. Stayton, President". Said letter for the first time advises the contestant about the toilet and beauty preparations, and contains a number of alluring enclosures including "Certificate of Award for 100,000 Auto Votes", printed in simulation of a money coupon, with "$2,250.00", printed at each of the four corners of the face thereof. Printed across the middle of this certificate are the words "Redeemed for $1250 Cash". The letter, following congratulatory and enticing language as to the writer's "splendid start toward success", with such award of 100,000 votes, contains the following language: I know you are anxious to see right way what to do to get the $2,250.00 all in cash, or If you prefer, the benutif~ll "BUICK 8 SEDAN" delivered right to Your door by your nearest Buiclc dealer with $1,250.00 in cash for being prompt. Just 3 Things To do and the 1\Ioney will De in Your Hands. 1. Send the enrlosed Buic){ Prize Dlank promptly with $2.00 for the Big Six Bargain Assortment and you get 200,000 more Auto Votes at once. 2. Get the most Auto Votes according to the rules enclosed and you will be declared first prize winner.

3. Accept our CERTIFIED CHECK for $2,250.00. • • • • * • • ncmembcr, I am not asking you to send the full regular price of $3.30,-just send $2.00, the SPECIAL INTRODUCTORY price (You save $1.3Q)-but send 1t AT ONCE so you will be entered for the $1,2GO.OO promptness prize, otherwise You might win the Buick Sedan and not get the $1,250.00 promptness prize. Now you see bow Simple and Easy it is. Only one thing to do now-just rush Your Buick Prize Blank by return mail. Nothing hard to do,-no risk to you Whatever. Just as soon as your Buick Prize Dlank and $2.00 arrives, if prompt You Will be immediately entered for the $1,250.00 in cash tor promptnes.~. WON'T THAT BE WONDERFUL? I'll also send you 200,000 more Auto Vote10 to add to the enclosed 100,000 making you a GRAND TOTAL of 300,000 Auto Votes. This will triple your score-get them quick. • • • • • • • Be sure to show on the Buick Prize Blank whether, if first prize winner, you Want the Buick and $1,250.00 Cash or $2,250.00 all cash. PAR. 9. Thereafter, form letters are used in the contest and are filled in with the names of individual contestants to whom such let- FEDERAL TRADE COl\IMISSIO~ DECISIONS Findings 23F. T.C.

ters are sent in the course of the contest, all intended to give the impression that they are individual letters, and that the recipient is in an unusually favorable position in the contest, and that certain credits which are given or offered at different stages of the contest in large figures give the recipient substantial advanced standing. The exact value of such credits and the manner in which they are computed is ·shown in the rules of the contest, printed on the back of the "Certifi- -cate of Award" above mentioned.

PAR. 10. Form letters are also written to contestants when they had sent in their third orders (approximately 17% of original entrants) stating that the contestant addressed is in an advanced position over many others in the contest, and encouraging such contestant to increase his efforts to win a prize. There were approximately 22,000 entrants in the last contest. These form letters which were sent to all who have sent in three small orders for respondents' toilet articles were thus sent to over 3,700 persons in the last contest. They contain the following language:

It makes me very happy to acknowledge receipt of your third order and to send you the enclosed official .Auto Vote Certificate showing your score of 1,020,000 .Auto Votes.

You have qualified for the SPECIAL $150.00 CASH PROMPTNESS PRIZE and if First Prize Winner you will receive a total of l\Iore than $2,250.00. I l1ave been watching your good work in the contest and I am promoting you to the STAR BOOSTER CLUB. We are happy indeed to send you the endo~ed DIPLOMA OF RECOGNITION AND ADVANCEMENT. This shows that YOU HAVE PASSED MANY CONTESTANTS And now I want to see you forge ahead to victory.

I am sending you another order blank on which you can get 500,000 EXTRA FREE AUTO VOTES. This is the FINAL FREE AUTO VOTE OFFER and l want you to send your order right away. Be sure to keep your 20% commis· slon.

The diploma referred to which was enclosed i.-.; printed in simulation of an official document with ornate etched border and etching -Jor seal and is in the following language: Office of the President By These Presents be it known that:

Is Hereby Awarded This DIPLOMA of RECOGNITION AND ADVANCEMENT In Appreciation of the Representation Given Betty White Beauty Preparations By the above Named AUTO CLUB l\IEMBER and For tbe G. FRED STAYTON ET AL. 667 657 Findings Further Reason That Said Member's Auto Vote Score is In Excess of One Million Auto Votes, This Diploma of Recognition una Advancement is awarded and said 1\:lember is Hereby Advanced to Membership in the STAR BOOSTER CLUB.

The Signature Of The President Of the Betty White Corporation Is Authorized On this Membership this ----------- Day of --------------at the Office of The Company in Des Moines, Iowa.- Star G. F. STAYTON, President. Booster Betty White Corporation, 1912 Grand Ave., Club Des Moines, Iowa.

PAn.ll. Solving the advertised puzzle does not of itself qualify and;or entitle any contestant to win any prize. Prize winning is dependent entirely upon purchasing and selling respondents' products. The business carried on by the Betty White Corporation was conducted on the same general plan as that used by Paramount Products, Inc .

. In addition to said advertisements, respondents carry on an exten- Sive system of sending follow-up letters and literature relating to theprize contest (as indicated by extracts above set out) the primary pur- Pose and effect of which is to encourage contestants to sell toilet preparations, cosmetic and beauty preparations for the Betty White· Corporation.

Form letters used numbered up to #30, and a system of votes in very large numbers, were used as a part of this plan devised to sell Betty White products, which was similar to that previously employed by respondent Stayton to sell similar products under different names. Respondents' business conducted in the manner above described has b.een and is in competition with all others who are engaged in selling Similar products in interstate commerce .

. PAn. 12. As a result of respondents' plan and methods, a substantial number of the consuming public has purchased a substantial Volume of respondents' preparations, and so unfairly diverted a substantial volume of trade and business to respondents, which would otherwise have gone to competitors who have not used such unfair methods.

GPAn. 13. Respondents state the Betty White Corporation, of which · F. Stayton is president, completed on July 31, 1936, the contest Which was being conducted at the date of the issuance of the com- Plaint and since that time has been engaged in no business except the awarding of the prizes for such contest and other work necessary and incidental to the winding up of such contest and of its corporate affairs.

668 FEDERAL TRADE COl\Il\IISSION DECISIONS Order 23F. T. 0.

The respondent, Betty White Corporation, has stated that it will not conduct or in any manner engage in any business of the kind or nature heretofore conducted by it, or any other business except its own liquidation, and will as speedily as possible wind up its affairs and effect its final dissolution in accordance with the laws of the State of Iowa.

The respondent, G. Fred Stayton, has stated that he will not ~ngage in or conduct any business of the kind or nature described in the complaint and that he has not, since July 31, 1936, engaged in any such business except in the course of his work as president -of the Iktty White Corporation, in the winding up of the business affairs of said company and as necessarily incident to the awarding of the prizes won in the contest which ended July 31, 1936. CONCLUSION The aforesaid acts and practices of the respondents, G. Fred Stay· ton and the Betty White Corporation, are to the prejudice of the public and of respondents' competitors, and constitute unfair meth· ods of competition in commerce, within the intent and meaning of Section 5 of an Act of Congress, approved September 26, 1914, en· titled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Com· mission upon the complaint of the Commission, the answer of the respondents, and the agreed stipulation of facts entered into between the respondents herein, G. Fred Stayton and Betty White Corporation, and counsel for the Commission, which provides, among other things, that without further evidence or other intervening procedure, the Commission may issue and serve upon the respondents herein findings as to the facts and conclusion based thereon and an order disposing of the proceeding, and the Commission having made its findings as to the facts and conclusion that said respondents have violated the provisions of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." It is ordered, That the respondents, G. Fred Stayton and Betty White Corporation and its officers, and their respective representa· tives, agents, and employees, either directly or indirectly, personally or through any corporate or other device, in connection with the advertising, offering for sale, sale, and distribution of their toilet G. FTIED STAYTON ET AL. 669 657 Order preparations, or other products, in interstate commerce or in the District of Columbia, do forthwith cease and desist from: 1. Representing that a person solving a problem or puzzle presented in an advertisement and sending said solution to respondents will, without being required to make any other substantial effort, be given a prize, an award or reward, when such is not the fact. 2. Representing that the mere mailing of a correct solution of a Problem presented in an advertisement of a puzzle prize contest will be sufficient to win the first, or any other, prize in said contest. 3. l{representing that a contestant in any puzzle or problem contest Will be required to pay no money.

4. Making use of advertising matter, in any puzzle or problem contest, purporting to disclose all of the terms and conditions that must be met by the contestant when said terms and conditions so set ?Ut are not, in fact, the only terms and conditions that must be met 111 order to be successful in winning a prize or an award in said contest.

5.· Making use of advertising matter, in any puzzle or problem contest, in which there is set out a portion of the terms and conditions the contestant will be required to meet without stating that said t~rms and conditions so specified and set out are, in fact, only a portion of the requirements that must be met by a contestant. · 6. Hepresenting that a contestant in any puzzle contest has achieved a more advanced position toward success in said contest than said contestant has in fact achieved.

!· Making use of a form letter with reference to the position in said contest of the addressee therein which represents that it refers to his actual position or relative standing, when such is not the fact .

.It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in Which they have complied with this order.

670 FEDERAL TRADE COMl\IISSIO:N DECISIONS Complaint 23F. T. C.