Croxonol Sales Corporation

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IN THE MATTER OF CROXONOL SALES CORPORATION, AND ALFRED W. LUDLIN, INDIVIDUALLY AND AS PRESIDENT OF CROXONOL SALES CORPORATION CO:\IPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF' Sl~C. 5 OF AN ACT OF CONGRESS APPROVED S"EPT. 26, 1914 Docket 3192. Complaint, Jtt1y 29, 1937-Decision, Nov. 8, 1997 Where a corporation engaged in manufacture, sale and distribution of its so-call£>d "Croxon Method" preparation for treatment of superfluous hair, in commerce among the various States and in the District of Columbia, in advertising the same through price lists, newspapers, periodicals, and other adverth;i~g media, printed, published and circulated through the mails to customers and prospective customers located ln the various States and in said District- Represented that said product would permanently remove and completely stop growth of superfluous hair, nnd was guaranteed permanently to remove same from face, arms and legs, and would keep user free from hair and wPll-groomed, and that no odor resulted from use of said product, facts being said various statements or representations as to nature, merit and effect of its said product were exaggerated, misleading, and false; With tendency and capacity to mislead a substantial portion of consuming public into erroneous belief that all said representations were true and into purchase of its said product on account of such belief, and with result that trade was diverted from competitors similarly engaged as manufac· turers and distributors of like and similar commodities, and who truthfully ad\"ertise and represent the nature and merit of their respective products and refrain from advertising or rppresenting, through their catalogs or other ad,·ertislng media, that their commodities have a n_ature and merit which they do not have; to the substantial injury ot competition in commerce:

lleld, That such acts and practlc£>s were to the prejudice of the public and competitors and constituted unfair methods of competition. Jlr. S. Brogdyne Teu, II for the Commission. Complaint J>ursuant to the provisions of an Act of Congress, approved Sep· tember 26, 1914, entitled "An Act to create a Federal Trade CoJll· mission, to define its powers and duties, and for other purposes," the Federal Trade Commission having reason to believe that Croxonol Sales Corporation and Alfred ,V. J ... uLlin, individually and as President of Croxonol Sales Corporation, hereinafter referred to as re· spondents, have been and nre using unfair methods of competition ,CROXONOL SALES CORP., ET AL. 1389 1388 Complaint ~n commerce, as "commerce" is defined in said act of Congress, ald It appearing to said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues .its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Croxonol Sales Corporation, is a corporation organized and doing business under and by virtue of the laws of the State of New York with its principal office and place of business at 142 West 24th Str~et, city of New York, State of New York.

Alfred W. Lublin, an individual, is President of the Croxonol Sales Corporation, and has his principal office and place of business a~ 142 West 24th Street, city of New York, State of New York, and directs and controls sales policies of the respondent Croxonol Sales Corporation.

Respondents are now, and for more than one year last past, have been engaged in the manufacture, sale, and distribution of a certain preparation for the treatment of sur)erfluous hair known as the"C roxon Method" in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. \Vhen said product is sold, respondents transport or cause the same to be transported from their principal place of business in the city of New York, State of New York, to purchasers thereof located in other States of the United States and in the District of Columbia. There is now, and has been at all times mentioned herein, a constant current of trade and commerce in said above described product sold by respondents between and among the various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of their said business, respondents are now and have been in substantial competition with other corporations and with individuals, partnerships, and firms likewise ~~gaged in the business of distributing and selling preparations for le. treatment of superfluous hair in commerce among and between va~ous States of the United States and in the District of Columbia. An. 4. In the. course and conduct of their said business, respond- ~~ts have. caused to Le printed and circulated through the United ates malls to their customers and prospective customers in the various states of the United States catalogs, price lists, and other printed ~~a.tter. Respondents have also caused, and still cause, their adver- . lsements to be inserteu in newspapers and macrazines having a general 1 ~t~rst~te circulation. Each and all of the ;atalogs, price lists, and a \erhsements contain statements which purport to be descriptive of Complaint 25F. T.O.

the efficacy, value, and merit of the respondents' product. Among the statements made in the aforesaid catalogs, price lists, and newspaper and magazine advertisements, the following are representative: SUPERFLUOUS HAIR TROUBLES ENDED once and for all with the sure CROXON 1\fethod. Removes all hair on first application, keeps you well groomed and hair-free during the time needed to completely stop the growth "' "' "' GUARANTEED SAFE FOR FACE, arrns, legs • • • No odor. $1.25 at drug and dept. stores or Croxonol Sales Corp., 142 W. 24th St., New York City.

CROXON METHOD PAR. 5. All of said statements above set out, together with many similar statements appearing in respondents' advertising literature purport to be descriptive of respondents' product. In all of their advertising literature respondents represent through statements and representations herein set out, and other statements of similar import and effect, that:

(1) Their product will remove superfluous hair and when first applied; (2) their product will keep the user thereof well groomed and free from hair, and completely stop the growth of superfluous hair; (3) their product is guaranteed to remove superfluous hair from the face, arms, and legs; ( 4) and there will be no odor resulting from the use of respondents' said product. PAR. 6. The representations made by the respondents with respect to the nature and effect of their product when used are grossly exaggerated, false, misleading, and untrue. In truth and in fact, the respondents' product will not remove superfluous hair; said product will not keep the user thereof well groomed, and completely stop the growth of superfluous hair; and said product is not guaranteed to remo've superfluous hair from the face, arms and legs. There is an odor resulting from the use of the said product. PAR. 7. Each and all of the false and misleading statements and representations made by respondents in designating or describing their product and the effectiveness of said product for removing and treating conditions resulting from superfluous hair growth in offering for sale and selling their product were, and are, calculated to, and has and now have a tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that all of said representations are true, and that said product will in truth accomplish results claimed.

CROXONOL SALES CORP., ET AL. 1391 1388 Findings Further, as a direct consequence of the mistaken and erroneous heli~fs induced by the acts and representations of the respondents as heremabove detailed, a number of the consuming public have purchased a substantial volume of respondents' product with the result tha~ trade has been unfairly diverted to the respondents from competitors. • likewise enaa(J'ede. e. in the business of distributing and selling Similar products or other products designed and sold for use in removing and treating conditions resulting from superflt~ous hair growth and other conditions named herein who truthfully represent the effectiveness of their respective products. As a consequence thereof, a substantia~ injury has been done to competition in commerce among the several States of the United States and in the District of Columbia.

PAn. 8. 'The above and foregoing acts, practices, and representations of respondents have been and are all to the prejudice of the public and respondents' competitors and have been 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 Sept~mber 26, 1914, entitled, "An Act to create a Federal Trade Commis- ~on, to define its powers and duties, and for other purposes," the ederal Trade Commission, on August 2, 1937, issued and served its comp~aint in this proceeding upon respondents Croxonol Sales Cor- ~oration and Alfred \V. Lublin, individually, and as president of roxonol Sales Corporation, charging them with the use of unfair ln~thods of' competition in commerce in violation of the provisions of Said act. After the issuance of said complaint and the filing of :respondents' answer thereto, a stipulation as to the facts was entered lnto between '\V_ T. Kelley, Chief Counsel for the Commission, and ~~spondent Croxonol Sales Corporation, which said stipulation was ereafter approved by the Commission. Thereafter this proceeding re¥ularly came on for final hearing before the Commission on the ~aid complaint and the answer thereto, and the stipulation as to the fi~~ts (respondent Croxonol Sales Corporation having waived the Ing of briefs); and the Commission having duly considered the same and being now fully advised in the premises, finds that this pro- Findings 25 F. T.C. ceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom: FINDINGS AS TO THE FACTS P ARAGRAPII 1. Respondent, Croxonol Sales Corporation, is a cor· poration having its principal place of business and office in the city of New York, State of New York.

PAR. 2. The corporate respondent has been for more than one year last past engaged in the business of manufacturing, selling, and dis· tributing a certain preparation for the treatment of superfluous hait· known as the "Croxon Method" in commerce between and among the various States of the United States and in the District of Columbia. PAn. 3, In the sale of said product respondent has transported or .caused the same to be transported from its principal place of business in the State of New York to purchasers thereof located in States of the United States other than the State from which the shipment .originated, and in the District of Columbia. There has been for more than one year last past, and there still is, a constant current of trade and commerce in said product so sold and .distributed by the corporate respondent among and between the various States of the United States and in the District of Columbia. PAn. 4. In the course and conduct of 1ts business said respondent, in -soliciting the sale of, and in selling its product, and for the purpose .of creating a demand upon the part of the consuming public for said product, has for more than one year last past caused its product to be .advertised through the media of price lists, newspapers, magazines, :and other advertising media printed, published, and circulated through the United States mails to its customers and prospective .customers located in the various States of the United States and in the District of Columbia.

In the aforesaid ways and by the aforesaid means the respondent makes, and has made, to the general public false and misleading statements with reference to the commodity offered for sale by it. 'The price lists and other printed matter published and distributed by respondent, and hereinbefore referred to, contain false and mis· leading representations concerning respondent's product. The prod· net sold and distributed by respondent is represented to the pur· .chasing public in the following manner:

SUPERFLUOUS llAin TROUllLES ENDED {)nee and tor all with the sure CROXON lllethod. Removes all hnlr on first application, keeps you well groomed and hulr-tree during time needed to coJll· CROXONOL SALES CORP., ET AL. 1393 1388 Findings :Pletely stop the growth • • GUARANTEED SAFE for Face, Arms, Legs "' "' "' No odor. $1.25 at drug and dept. stores or Croxonol Sales Corp., 142 W. 24th St., New York City.

CROXON METHOD PAR, 5. The statements as set out above together with many similar statements appearing in respondent's advertising literature, and other statements of similar import, represent to the consuming public that:

(1) Its product will permanently remove superfluous hair; (2) its product will keep the user thereof well groomed and free from hair, and will completely .stop the growth of superfluous hair; (3) its product is guaranteed to remove superfluous hair from face, arms, and legs; and (4) there will be no odor resulting from the use of I·respondent's product.

PAn, 6. In truth and in fact the representations made by the respondent with respect to the nature, merit and effect of its product are exaggerated and misleading. Respondent's product will not permanently remove superfluous hair. It will not keep the user thereof free from hair and well groomed, and will not completely stop the growth of superfluous hair. Said product is not guaranteed to permanently remove superfluous hair from face, arms, and legs; and there is an odor resultin(l' from the use thereof. P.An, 7. There are among the competitors of respondent in commerce as herein set out manufacturers and distributors of like and similar commodities who truthfully advertise and represent the nature and merit of their respective products, and who refrain from ~advertising or representing through their catalogs or other advertislng media that the commodities offered for sale by them have a nature and merit which they do not have. All of the aforesaid statements and representations made by the respondent in designating <>r describing its product, and in offering for sale and selling said Product, were, and are, calculah~d to, and had, and now have, a tend- ~ncy. a~d capacity to mislead a substantial portion of the consuming Pubhc lllto the erroneous belief that all the said representations are trfue, .and into the purchase of respondent's said product on account 0 s:ud belief.

b As ~ result of the representations made by respondent trade has een diverted from those competitors of respondent engaged in simi-1arb ·BUb USI~es~es! hereinbefore referred to. As a consequence thereof ~tantmlmJury has been and is beincr done by respondent to com-Petit' · oU . Ion m commerce among and between the various States of the llited States and in the District of Columbia. Order 25F. T.C.

CONCLUSION The aforesaid acts and practices of the respondent, Croxonol Sales Corporation, are to the prejudice of the public and of respondent's competitors and constitute unfair methods of competition in commerce, "within the intent and meaning 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."

ORDER TO CEASE' AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondents, and the stipulation as to the facts entered into between ,V, T. Kelley, Chief Counsel of the Commission, and the respondent Croxonol Sales Corporation, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of an Act of Congress approved September 2G, 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 respondent, Croxonol Sales Corporation, its officers, representatives, agents and employees, in connection with the offering for sale, sale, and distribution of a preparation for .the treatment of superfluous hair now known as the "Croxon Method" or of any other similar preparation designed for similar usage whether sold under that name or under any other name, in commerce among and between the various States of the United States and in the District of Columbia, do forthwith cease !tnd desist from representing, directly or indirectly: (1) that said product will permanently remove superfluous hair i (2) that said product will keep the user thereof free from hair and well groomed, and will completely stop the growth of super- Huous hair; (3) that said product is guaranteed to permanently remove superfluous hair irom face, arms, and legs; ( 4) that there will Le no odor resulting irom the use of respondent's said product.. It is further' oJ'dered, That as to the individual respondent Alfred ,V, Lublin, the case be dismissed without prejudice due to the det\th of said individual respondent on September 12, 1937. It is further ordered, That the respondent Croxonol Sales Corporation shall, within 60 days after service upon it of this orde~, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order. P. H. HANES KNITTING CO. 1395 Order