Utilities Engineering Institute

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IN THE 1\fA 'ITER OF UTILITIES ENGINEERING INSTITUTE COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THEl ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SE>PT. 26, 1914 Docket 453g, Complaint, July 8, 19-P-Decision, Aug. 31, 1943 Where a corpor:ation engaged in interstate sale and distribution of correspondence courses in, among other subjects, refrigeration, air-conditioning and welding, including provision for the student's bus fare to and fr·om Chicago and for room and board during 2-weeks' shop training to which, without further charge, upon satisfactory completion of his lessons and at his option, be was entitled; through newspaper and periouical advertisements, printed matter circulated by mail and otherwise, and through canvassers- ·· (a) Represented that upon completion of its said correspondence courses, a student would be qualified as an expert welder and as an expert in refrigeration and air-conditioning, and be qualified to Install, repair or otherwise service such equipment;

'lhe facts being that theoretical instruction alone can not make one an expert Wel<ler without br·oad practical experience; the course concerned did not, In said. respect, pt·ovide the necessary background of experience; and graduates of its refrigeration and a!t·-conditionlng courses similarly wer·e not thereby expert in said subjects, nor, even assuming full training in the theory tber·eof upon completion of the course, followed by the two weeks' Shop training, quali.fied to undertake upon their own responsibility Installation, repair or service of refrigeration and air-conditioning machinery and equipment; and (b) Represented also that there was a great demand for men qualified as its students would be upon completion of its course, to phm, install, repair nnd service t•efrigeration and air-conditioning machine:r,:y, with better and '-" 1<lore profitable employment certain and success assured; he facts being that concerns engaged in such work generally do not employ as a service man or workman one who has not had considerable actual experience; graduates of such correspondence school courses are usually em- Ployed as helpers or shop e~ployees, subject 'to supervision and direction Until they have acquired sufficient experience and demonstmted ability necessary for the performance of such work without it; and while there was an increase In the number of such installations, both domestic and commercial, nnd reasonable oppot·tunities for employment for expert maintenance and Set·vice men-although on a partly seasonai basis-preceding the abnormal 'V orWar-inducedgraduat_es,conditions,who were limitedsuch employmentinitially, aswasabovenot setavailableout; to such students lth tendency and capacity to mislead prospective purchaset·s of courses In question into the mistaken belief that such representations were true, thereby 1I Inducing purchasl.' thereof:

eld, 'that such acts and practices, under the circumstances set forth, were an to the prejudice and injury of the public, and constituted unfair and · deceptive acts and practices in commerce. 366 . FEDERAL TRADE COMMISSION DECISIONS Complaint 87F.T.C· Before Mr. James A. Purcell, trial examiner.· Mr. lVilliam L. P encke for the Commission. Mr.llenry Jurnge, of Chicago, Ill., for respondent. Complaint Pursuant to the provisions of the Federal Trade Commissi~n Act and by virtue of the authority vested in it by said act, the Federal · Trade Commission, having reason to believe that Utilities Engineer· ing Institute, hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the Commission that a pro· ceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating·its charges in that respect as follows: PARAGRAPH L Respondent, Utilities Engineering Institute, is a cor-. poration, organized, existing and doing busmess under and by virtue of th~ laws of the State of Illinois, with its principal office and place of business located at 1314 Belden Avenue in Chicago, State of Illinois. - PAn. 2. Respondent is now, and for more than one year last past has been engaged in the sale a_nd distribution of correspondence courses in air conditioning, electric refrigeration, welding, and aut~­ mobile body repairs direct to the purchasing public located in the varl· ous States of the United States other than the State of Illinois, and in the District of Columbia.

In the course and conduct of its business, ~md in connection with· the sale and distribution of its said correspondence courses, respond· ent transports or causes to be transported printed copies of its lesso~s, examination questions, pamphlets and various documents from 1ts place of business in the State of Illinois to t.he purchasers thereof located in various States of the United States other than the Stnto of Illinois, and in the District of Columbia. Respondent maintains and at all times mentioned herein has maintained, a substantial course of trade in said correspondence courses, in commerce, among and be· tween the various States of the United States and in the District of Columbia.

PAn. 3. Said respondent, in soliciting the sale of and in selling its said courses of study and instruction, in commerce, has made nurner· ous misleading representations Ly one or more of the following n1eth· ods, to wit: through its representatives engaged in soliciting the sal~ of such courses; in advertising and printed matter circulated or cause to be circulated by said respondent by mail and otherwise to prospec· tive students, enrolled students or to members of the public generally in various states of the United States; and in radio broadcasts to me:tn· UTILITIES ENGINEERING INSTITUTE 367 Complaint bers of the general public~ including prospective students. Typical of ,, such misleading representations made by or through one or more of the I•: Said methods are the following:

There are unlimited opportunities for young men who want to become actively and profitably engaged In this fascinating field. Men already employed In the Industry have found U. K I. training leads to rapid promotion with IP.creased earnings .

.A. vast number of aF.tbitious men have benefited Immeasurably through U. E. I. Manufacturers of refrigerators employ trained men in their~ production dellartments in adp.ition to the thousands employed In the service departments of their extensioa dealer organization., .t\tter satisfactorily completing U. E. I. training you will be ready for gainful emplvyment In one of the fastest growing and most promising industries . .A.re you awake to tbe splendid opportunities open to serious minded men In the air conditioning and refrigeration lndustt·y? Here's one business that needs men-NOW-for estimating, planning, installing and servicing of equipment. If you are mechanically Inclined and willing to devote part of your spare time to study, investigate this opportunity today; Don't pass up this opportunity for BETTER employment, HIGHER earnings and a ·BRIGHTER FUTURE.

l'd recommend your training to any ambition!'~ mechanically minded young lnan. Since completing the course I have. had nothing but success from, the start. · Men with U. E. I. training have obtained employment with distributors, dealers and service organizations for practically all the leading manufactmers of refrigerating and air conditioning equipment * * • You read of the shortage in industry of trained men-men capable of taking the bigger pay, greater profits jobs of men trained In modern developments such as air conditioning and refrigeration, In auto body and fender work, Including llletal work, welding and painting * * .• 1\Iany manuf11cturers endorse a training plan that can let you take your place In this pleasant and profitable lled and please note-this is spare time training that wlll not interfere with lour present employment. Find out how you may prepare to join t11e huge ar:rny of skilled workers who are so vitally necessary right now. The Utilities Engineering Institute wll furnish you complete Information on how you can be trained to become an expert weTder. They will teach you at horne in your spare time the fundamental and basic things you must know to qualify as an expert. * * * You'll also receive the benefit of a carefully lllanned placement service. * * * You can learn body and fender craftsman- Eih!p In your spare time.

• * * get complete information regarding a training progrom which has helped other men..lust like you to get ahead In this chosen field; training that is endorsed by leading manufacturers of refrigerating and air conditioning !!!J.ulpment; training selected by leaders to train their own dealer organizations. * • • .

Utilities Engineering In~t!Jute Is endorsed and recommended by so many l:real manufacturers in the field. * • * Take the training manufacturers have used in the training of their own employees. PAn. 4. By means of the foregoing statements the respondent represents that the opportunities in the air conditioning and electrical re- 368 FEDERAL TRADE COMl\'CISSION DECISIONS Complaint 37F. T. C frigeration industries are unlimited; that the taking of its said courses of instruction will lead to rapid promotion, higher earnings and greater opportunitil's; that success is assured from the start after completion of its courses of instruction in air conditioning and elec· trical refrigeration; that the training provided by respondent's course in welding will qualify one as an expert welder; that leading manu· ·facture·ers employ large numbers of respondent's graduates, endorse its courses and utilize said courses in training their employees; that the opportunities _in the air conditioning, electrical refrigeration, au· tomobiie body repair and welding industries are, greater and employ· mentmore certain than in other industries.

PAR. 5. The aforesaid statements and representations are mislead· ing and grossly exaggerated. The opportunities in the air con· ditioning and electrical refrigerating industries are not unlimited. Students who complete said training are not assured employment and, generally, jobs are not available for all graduates. Only a lim· ited number of students enrolled complete the course, and of those only a limited number obtain positions in the industry. Success is not assured from the start, or Q-t all, to those who complete respond· ent's courses of instruction. Rapid promotion, higher earnings and greater opportunities do not ordinarily result from taking said courses of instruction. "'While there may be some manufacturers and distributors of air· conditioning and refrigeration equipment wl~o have endorsed said courses of study and recommended them to their employees, they do not constitute a representative' number of leading manufacturers and dealers of such equipment. The air conditioning and refrigeration industry is not, generally speaking, in need of men not available through the usual channels, and there is not a great or unusual uemand for men in ~aid industry. Ordinarily, manuf<1cf turers train their own men in connection with the manufacturing 0 said equipment, and dealers and service men require men with substantial practical experience in their respective branches of said industry· The completion of respondent's c.ourses of instruction in the weld· ing and automobile body repair trades will not qualify a student 0J an expert in said trades; in addition to the theoretical instruction an training a substantial amount of practical experience is necessary td · qualify anyone as an expert. The opportunities for employment an increased earnings in such trades are not greater than in many other trades and industries. • 11 PAR. 6. Respondent, through the use of the words "Engineel'l~" Institute" as a part of its corporate name, falsely represents or imp~ 1es that it is a group or organization of engineers of the air conditionii17 and electrical refrigeration industries instituted for the purpose 0 UTILITIES ENGINEERING INSTITUTE 369 Findings considering the problems of said industries from a scientific and technical standpoint and to further and promote the interests and welfare of such industries generally.

In truth and in fact, respondent's business• is a correspondence ~chool, organized and operated for the purpose of offering and sell- Ing correspondence courses in air conditioning, electrical refrigeration, welding and automobile body repairing solely for the financial Profit of respondent. While respondent maintains at its place of business a laboratory for the purpose of giving its students a short optional practical training which is taken by some of its students at the conclusion of tlie correspondence courses and occasionally may Perform certain laboratory tests at the request of some members of the industry. it is not in any sense an organization composed of members of the industry who meet regularly for the purpose of discussing 1\?d solving scientific or technical problems incident to the air condi- ~Ioning and electrical refrigeration industries and of furthering the Interests of said industries generally.

PAR. 7. The use of the aforesaid misleading and deceptive state- . ~ents and representations by respondent, in connection with the offer- Ing for sale and sale of said courses of study and instru~tion have had, and now have, the tendency and capacity to mislead purchasers and prospective purchasers thereof into the erroneous and mistaken belie£ that such representations are true, and to induce them to purchase and pursue such courses of study and instmction on account thereof.

PAR, 8. The aforesaid acts and practices of respondent are all to the prejudice and injury of the public and constitute ~mfair and de. cet>tive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO Tile FACTS, AND ORDER th Pursuant to the provisions of the Federal Trade Commission Act, e Federal Trade Commission on July 8,·1941, issued and subsequently &:rved its complaint in this proceeding upon respondent, Utilities Eng"l.neering Institute, a corporation, charging it with the use of unfair deceptive acts and practices in commerce in violation of the pro- ~Slons of said act. After the issuance of said complaint and the filing ~ respondent's answer thereto, testimony and other evidence in supi ort of and in opposition to the allegations of said complaint were dnt~oduced before an examiner of the Commission theretofore duly 1, esignated by it, and said testimony and other evidence were duly pecorded and filed in the office of the Commission. Thereafter, the roeeeding came on for final hearing before the Commission on the Findings 37 F. T. C. ·said complaint, answer thereto, testimony and other evidence, report ·of the trial examiner and exceptions thereto, briefs in su,pport of and in opposition to the complaint, and oral arguments of counsel; and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding 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 AitAGRAPII 1. Respondent, Utilities Engineering Institute, is a cor· lJoration, organized and existing under and by virtue of the laws of the State of Illinois, with its principal office and place of business at 1314 Belden Avenue, Chicago, Ill.

PAR. 2. For several years last past respondent has been and is no"' ·engaged, as a part of its business, in the sale and distribution to mern· ·hers of the public of correspondence courses of instruction in variou~ subjects, including refrigeration, air-conditioning, and welding. In the course and conduct of its said business and in connection with the sale and distribution of its said correspondence courses, respondent transports or causes to be transported print~d copies of its lessons, examination questions, pamphlets, and various other documents frorll its place of business in the State of Illinois to purchasers thereof locate.d in various States of the United States other than the State of Illinois· -and in the District of Columbia. Respondent maintains, and has maintained, a substantial course of trade in said correspondence -courses of instruction in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. In soliciting the sale of its said courses of study and instr~10' tion in commerce, respondent has advertised such courses to prospectn:e .students and members of the public generally in various States of ti:e United States by means of radio broadcasts and advertisements 111 newspapers and periodicals which circulate among(J' members of the public, by means. of printed matter circulated or. cau;d to be circulated by mail and otherwise to prospective students, and by agents engaged in soliciting the sale of such courses. In the solicitation and sale of, and in order to induce and aid in inducing the sale of, its fiaid courses of instruction, respondent has, by the means aforesaid, made numerous false and misleading representations, of which the following nre typical:

The Utilities Engineering Institute wlll furnish you COMPLETE lnformatloll . ton how you can be trained to become an expert welder. They will teach you, 11 home, ln .,.our snare time, the fundamental and basic things you must know to UTILITIES ENGINEERING INSTITUTE 371 3G5 Findings !JUallfy as an expert; to qualify for the really GOOD jobs that are opening up for expert welders right now. (Com. Ex. 4.) • • • • • • • There's a steady demand for trained men who can service and maintain refrigeration equipment • • • and there's a shortage of trained men who can do that kind of work and do it right. • • • The Utilities Engineering Institute has been training men for Industrial work for a good many years. It gives You the training you need to make you a refrigeration and air-conditioning ex- Dert. (Com. Ex. 7-A.) • • • • • • • You'll receive complete Information absolutely free and without obligation Showing how you can learn at home in your spare time to cash in on the profitable, llleasant fields of electric refrigeration. • • • air-conditioning • • •. (Com. Ex. 9--B.) • • • • • • • YOU READ OF THE SHORTAGE IN INDUSTRY OF TRAINED MEN :!lien CAPABLE OF TAKING THE BIGGER PAY, GREATER PROFITS JOBS · · . OF MEN TRAINED IN MODERN DEVELOPMENTS SUCH AS AIR- CONDITIONING AND REFRIGERATION • •. • AND • • • WELD- ING. • * * THERE IS A GREATER'OPPORTUNITY THAN EVER BEFORB hor THE MAN TRAINED FOR THE HIGHER PAYING JOBS IN THIS l>U.OFITABLEl, PLEASANT TRADE. TRAINED 1\IEN ARE NEEDED IN ALL BU.ANCHES OF INDUSTRY •.• AND YOU MAY BE ONE WHO CAN CASH IN ON TODAY'S DEMAND! (Com. Ex. 10--A and B.) . • • • • • • . Now men-here's that important message we have for you-that Chance of a Lifetime for you to be independent and happy ... free of the cares that go with n small, uncertain income. • * • UTILITIES ENGINEERING INSTITUTE can give you the training necessary for you to realize your dreams of success! (Com. Ex. 11-A and B.) • • • • • • • You men who are on the lookout for a better job in life-listen to this: Are lou awake to the splendid opportunities open to serious minded men in the alrconuitlonlng and refrigeration industry? Here's one business that needs men- :NOW-for estimating, planning, installing and sen·Iclng of equipment. (Com. l!:x:. 13-A.) • • • • • • • The Air-Conditioning and Refrigeration Industry is growing so. fast that one Of its greatest needs Is trained men. Men are needed to install, repair and service the vast amount of equipment being placed in operation today. To meet this lleed, the nationally known UTILITIES ENGINEERING INSTITUTE is selecting llrollerly qualified men to train for positions In this fast growing business. • • • 'tou should by all means investigate the opportunities that exist ln this great Industry ot the future. (Com. Ex. 17-A.) · • • • • • • • I'd recommend your trainhig to any ambitious, mechanically minded young lllan. Since completing your course I have bad nothing but success from the start. (Uesp, Ex. 13-0.) . '- - Findings 37F.T.C· By the use of statements such as those quoted above, ~nd others similar thereto, respondent has represented that upon completion of its correspondence courses in refrigeration, air-conditioning, or· welding a student is qualified to install, repair, or otherwise service refrigeration and air-conditioning equipment, and is an expert in such work, or is qualified as an expert welder. Such advertisements have also represented that there was a great demand for men qualified-as its students would be qualified upon completion of said courses-to plan, install, repair, and service refrigeration and air-con· ditioning machinery, and that better and more profitable employment was certain and success assured for those completing its courses. PAR. 4. Respondent's correspondence courses in weiding, refrigera· tion, and air-conditioning are intended to be completed within 10 to 12 months, although students may take a considerably longer period for completion of such courses if they wish to do so. The courses consist of instruction given by correspondence lessons in the theory of the particular course selected by the student, and upon satisfactory completion of the correspondence ·lessons the student may, at his op· tion, receive 2 weeks' shop training at respondent's place of business in Chicago. The payment made for the courses includes provision for the student's bus fare to and from Chicago and for his room and board there during the 2-week period of shop training. Appro:gi· mately 20 percent of those who enroll as students in respondent's correspondence courses actually complete the course for which they enroll. Respondent's correspondence course in welding, followed bY such actual practice in welding as is provided by the 2 weeks' shop training, will not make an expert welder of a student who is withotlt previous practical experience in welding. In order to be qualified as an expert welder, assuming the necessary aptitude, a long period of practical experience which encompasses working with various metals, with different types of welds, and with various techniques to meet differing requirements is necessary under actual working conditions· A person may, by adaptability and practical experience, become an expert welder without theoretical instrudion, but theoretical instrtlC' tion alone cannot make an expert welder in the absence of broad prac· tical experience. Respondent's course does not provide the ba.c}!:· ground of experience necessary to produce nn expert welder. s~m­ ilarly, graduates of respondent's refrigeration and air-conditionrn.~ courses are not experts in refrigeration or nir-cotHlitioning. Eve~ 1 it be assumed that upon completion of respondent's courses, includrn~ the 2 weeks' shop training, a student is fully trained in the theor)' 0 the subjects, he is still not qualified to undertake upon his own respon- UTILITIES ENGINEERING INSTITUTE 373 365 Findings sibility to install, repair, or service refrigeration and air-conuitioning lllachinery and equipment. In order t.o be so qualified, a very considerable fmther practical experience under the supervision and direction of experienced men is necessary. Concerns engaged in installing, servicing, and maintaining refrigeration and air-conditioning equipment generally do not employ as a service man a workman who has not had considerable actual experience, and graduates of correspondence school courses such as respondent's, if employed by such concerns, arc usually in the status of helpers or shop employers where they are supervised and directed until such time as they have acquired sufficient experience and demonstrated the ability necessary to qualify for the performance of repair and maintenance v>ork without direct supervision.

PAR. 5. RespondPnt's represpntations conceming its correspondence courses in refrigeration and air~conditioning are calculated to, and do, lead to the belief on the part of ·prospective students that employ- ~ent in the refrigeration and air-conditioning industry at the level lndicated by respon4ent's advertisemrnts is certain, with great oppor· tunities for advancement-that success is assured. There representations are viewed in the light of conditions which existed during the ~·ears immediately preceding the issuance of the complaint herein and not under the abnormal conditions which have more recently existed as a result of the national preparedness program and active participation in war.

Refrigeration and. air-conditioning maintP.nance and service is in Part seasonal, particularly as to domestic installations. There was an increase in the number of such installations, both domestic and commercial, in the period of time under consideration, and a reasonable opportunity for employment has existed for expert maintenance and service men. Such employment, however, was not available to tespondent's students or graduates. The record indicates, and the Commission finds, that there was little or no opportunity for respondent's students or graduates to find positions as service or maintenance 111en because of lack of qualifications as set out in the preceecling Paragroph. In general, such employment as respondent's students ?r graduates might find in the refrigeration and. air-conditioning 111dustry was us helpers and shop employees pending such time as, by aptitude, experience, and further training acquired in the course of their employment, they might become qualified for and secure work of the types specified. by respondents. "Splendid. opportunities," as represented. by respondent, signify a high probability of employment at the placement level indicated by respondent with COMMISSIO~ DECISIONS374 FEDERAL TRADE Order 87F.T.C.

reasonable opportunity for substantial advancement. In general, the refrigeration and· air-conditioning industry has not afforded this to men whose qualifications were limited to those secured through respondent's courses.

PAR. 6. The statements and representations made by respondent, as aforesaid, in connection with the offeri11g for sale, sale, and distribu· tion of its corresp~ndence courses have had, and have, the tendency and capacity to mislead purchasers and prospective purchasers thereof . into the erroneous and mistaken belief that such representations are true, and to induce them,' because of such erroneous and mistaken b<J· lief, to purchase and pursue such courses of study and instruction. CONCLUSION The aforesaid acts and practices of respondent are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Conunis· sion ·upon the complaint of the Commission, the answer of respond· ent, testimony and other evidence in support of and in opposition to the allegations of the complaint taken before an examiner of the CoJll· mission theretofore duly designated by it, briefs filed herein, and the oral arguments of counsel, and the Commission having made its find· ings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission Act. It is ordered, That respondent, Utilities Engineering Institute, .'il corporation, its officers, representatives, agents, and employe~s, ?1rectly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of correspondence cours~s of study and instruction in commerce, as "commerce" is defined .1I1 the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or by implication: 1. That individuals completing respondent's correspondence course in welding will thereby be qualified as expert welders. 2. Tluit unusual or extraordinary opportunities for employment are open to individuals completing respondent's correspondence courses in refrigeration and/or air-conditioning, or that such individuals are assured of employment as service or maintenance men in the refriger· ation and air-conditioning industry.

UTILITIES ENGINEERING INSTITUTE 365 Order 3. That by completion of respondent's' correspondence courses in: refrigeration and/or air-conditioning individuals are thereby assured of employment, promotion, or success in such industry. It is fwrther ordered, That respondent shall, within 60 days afterthe service upon it of this order, file with the Commission a report. in writing setting forth in detail the manner and form in which it. has complied with this order.

Syllabus 37F.T.C-