Kampf, William H

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IN THE ~ATTER OF WILLIA~ H. KA~PF AND EARL H. WILSON COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4988. Complaint, June 30, 1943-Decision, June 15, 1944 Where an individual engaged" in. interstate sale and distribution of printed mailing cards designed·and intended for use by creditors and collection agencies in obtaining information concerning debtors, including (1) cards making use of "Character Reference Bureau" which advised recipient that it was "very important that" the "subject be properly identified," and on the attached self-addressed post cards called for .information as to his name, age, nationality, marriage state, address, employer and home ownership and whether "worthy of a responsible position," and (2) cards making use of name "U.S. Pencil Sales" which advised addressee "A Pencil Free To Advertise Our Pencils," that "All we ask' is that you show our pencil to your friends and fellow-employees," that "To avoid duplication, name of employer must be given," counseled prompt action since only a ·limited number would be given away and stated "Your pencil will be sent you as. soon as this card is returned," following which provision was made for name and address of the debtor and that of his employer, followed by notice that "This Advertising Offer is Not Transferable, For You Only"; Making use of a plan under. which purchasers addressed said "Character Reference" cards to those believed able to furnish the desired information, purchasers of the "U.S. Pencil" cards addressed them to those concerning whom information was sought, at their last known address, and caused them to be stamped and delivered to "the Chicago address made use of by said individual, who there mailed them and forwarded to the appropriate purchasers such reply cards, identified by code numbers, as were received by him or forwarded to him by an individual compensated for such services and the use of his office- (a) Falsely represented through said "Pencil Sa\es" cards and placed in the hands of purchasers thereof means of falsely representing, directly and by implication, to the addressees of said cards, that the pencils referred to were of such a character that the friends and fellow employees of the recipients of the cards might be interested. in purchasing them; that the advertising offer of a free pencil was made for the purpose of introducing the pencils to prospective purchasers; and that only a limited number of pencils would be given away; and (b) Falsely represented through use _of name "U. S. Pencil Sales" and placed in the_ hands of purchasers of said cards the means of representing, directly and by im~ plication, that he was in the business of selling and distributing pencils; The facts being that the pencils sent to those who returned said cards were not such as to be of any possible interest to persons to whom they might be exhibited and were readily obtainable in any community; the whole scheme was a subterfuge for ob~ ta.ining information to facilitate the collecti~n of alleged delinquent accounts by his customers; and the said name was merely a disguise for the true nature of the business; and (c) Falsely represented through said "yharacter Reference" cards, and placed in the hands of' purchasers of said ·cards means of falsely representing, directly and by implication, to persons from whom information concerning others was sought, that the inquiry was for the purpose of identifying the person concerning whom it was made, and determining whether his character was such as to make him worthy I I:

l l' WILLIAM H. KAMPF ET AL. 653 652 Complaint of a responsible position; and that he was engaged in the business of obtaining information concerning the characters of individuals; Facts being the scheme was like that preceding, a subterfuge for obtaining information to facilitate the collection of alleged delinquent accounts; With effect of misleading and deceiving many persons to whom said cards were sent into the erroneous belief that the said representations were true,· and by reason thereof 'to give information which they would not otherwise have supplied: Held, That such acts and practices, under the circumstances set forth, were all to the '' prejudice and injury of the public, and constituted unfair and deceptive acts and practices in commerce. • · Before· Mr. Arthur F. Thomas, trial examiner.

Mr. Randolph W. Branch for' the Commission.

I' COMPLAINT I1', Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that William H. Kampf, an individual, trading as The Tracer System, and using the names Character Reference Bureau, and U.S. Pencil Sales, and Earl H. Wilson, an individual, hereinafter referred to as the respondents, have violated the provisions of said . act, and it appearing to the Commission that a proceeding by it in respect ~hereof would be in the public interest, hereby issues its complaint stating tts charges in that respect as follows: . . PARAGRAPH 1. Respondents, William 1:1. Kampf and Earl H. Wilson, are individuals, with an.office and principal place of business at 330 South Wells Street, Chicago, Ill. Respondent, William H. Kampf, in the conduct of his business, has traded under the name The Tracer System, and has also used the names Character Reference Bureau and U. S. Pencil l. Sales.

PAR. 2. Respondent, Kampf, is now, and has been for more than three Years last past, engaged in the business of selling and distributing, under the name The Tracer System, printed mailing cards designed and intended to be used by creditors and collection agencies in obtaining information concerning debtors. · Respondent, Kampf, causes said cards to be transported from his aforesaid place of business in the State of Illinois to purchasers thereof in various States of the United States and in the District of Columbia. Said ·respondent maintains, and at all times mentioned herein has maintained, a course of trade in said cards in commerce between and among the various States of the United States and in the District of Columbia. PAR. 3. The said cards sold and distributed by respondent Kampf when using the name Character Reference Bureau are substantially in the form exemplified by a photostatic copy thereof, marked Exhibit A, and When using the name U.S. Pencil Sales, the cards are substantially in the form exemplified by a photostatic copy thereof marked Exhibit B. . The said Exhibits A and B are attached hereto and by this reference are Incorporated herein and made a part hereof.l Upon the said cards were placed code numbers by which the respondents Were enabled to identify the different purchasers. 1 Not publiahed. For identical exhibits included with the findings, see pp. 657, 658 infra. Complaint 38F. T. C.

The purchasers of the Character Reference Bureau cards addressed them to persons whom they believed able to furnish the desired information concerning the persons with reference to whom the inquiry was made. The purchasers of the U. S. Pencil Sales cards addressed them to the persons concerning whom the inf.formation was sought at their last kn<;>wn addresses. The purchasers placed on the cards the postage necessary for their delivery to the addressees and return, and caused them to be delivered to respondents at Chicago, Ill. ' At Chicago, Ill., they were received by respondent, Wilson, who deposited the individual cards in the United States mail. " Such of the reply cards as were returned were received by respondent, Wilson, the purchasers identified by the code numbers, and the reply cards sent by Wilson to the appropriate purchasers. To the persons who returned the U. S. Pencil Sales cards, respondent Wilson sent ordinary lead pencils about three and one-half inches in length, supplied by respondent," Kampf.

For the services rendered by Wilson ,he was compensated by Kampf. PAR. 4. By means of the U. S. Pencil Sales cards respondents have falsely represented, and placed in the hands of purchasers of said cards means of falsely representing, directly and by implication, to the addresses of said cards, that the pencils referred to were of such a character that the friends and fellow employees of the recipients of the cards might be interested in purchasing said pencils; that the proposal of a free pencil was made as an advertising offer for the purpose of introducing the pencils to prospective purchasers, and that only a limited number of pencils would be given away.

PAR. 5. Through the use of the' name "U.S. Pencil Sales" respondents have represented, and placed in the hands of purchasers of said cards the means of representing directly and by implication, that respondent, Kampf, is in the business of selling and distributing pencils. PAR. 6. The said representations were false and misleading. In truth and in fact the pencils sent to those who returned the U. S. Pencil Sales cards were not of such a character as to be of any possible interest to persons to whom they might be exhibited, were readily obtainable in any community, arid were not sent as a method of getting their merits before possible purchasers. The said cards were not sent as a means of promoting the sale of pencils, but had as their sole purpose the obtaining of information concerning the recipients. The number of pencils to be given away was not limited. Respondent, Kampf, was not engaged in the business of selling and distributing pencils. The whole scheme was merely a subterfuge · for obtaining information to facilitate the collection of alleged delinquent accounts by Kampf's customers, and the said name was merely a disguise for the true nature of the business.

PAR. 7. By means of the "Character Reference Bureau" cards, respondents have falsely represented, and placed in the hands of purchasers of said cards means of falsely representing, directly and by implication to persons from whom information concerning others was sought, that the inquiry was for the purpose of identifying the person concerning whom it was made, and determining whether his character ~-as such as to make him worthy of a responsible position.

Through the use of the name "Character Reference Bureau" respondents have represented, and placed in the hands of purchasers of said cards means of falsely representing, directly and by implication, that respondent, WILLIAM ·H. KAMPF ET AL. . 655 I':. I 652 Findings 1 ~~ : il, Kampf, was engaged in the business of obtaining information concerning :I the characters of individuals. :r The said representations were false and misleading. In truth and in · !I fact respondent, Kampf, was not engaged in the business of obtaining in- il formation concerning the characters of individuals. The information sought by means of the "Character Reference Bureau" cards was not for the purpose of identifying the. persons concerning ·whom the information was sought or of determining whether the characters of said persons were such as to render them worthy of employment in responsible positions. The sole purpose of said cards was the obtaining of information concerning the persons named therein. The whole scheme was me1:ely a subterfuge for obtaining information to facilitate the collection of alleged delinquent accounts by Kampf's customers and the said name was mere~y a disguise I; the true nature of the business. · for PAR. 8. The use, as hereinabove set forth,_ of the foregoing false and >·. misleading statements, representations and designations had had the capacity and tendency to, and has, misled and deceived many persons to whom ssid cards were sent into the erroneous and mistaken belief that the said statements, representations and designations were true, and by reason thereof to give information which they would not otherwise have supplied. PAR. 9. The aforesaid acts and practices of the respondents, as herein alleged, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce -.,with the inten~ and meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS,. AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on June 30, 1943, issued and subsequently served its complaint in this proceeding upon the respondents, William H. Kampf and Earl H. Wilson, individuals, charging them with the use of unfairand deceptive acts and practices in commerce in violation of the Provisions of that act. After the service of said complaint, and no answers thereto having been filed, testimony and the evidence in support of the _allegations of said complaint were introduced by R. .w. Branch, attorney for the Commission, and in opposition to the allegations of the complaint .b~ the respondents, before Arthur F. Thomas, an examiner of the Comnussion theretofore duly designated by it, which was duly recorded and filed in the office of the Commission. At the said hearing respondents Waived the filing of a report upon the evidence by the examiner, and thereafter waived all intervening procedure and further hearing as to the facts, and agreed that the matter might be disposed of by the Commission upon the record. Thereafter the proceeding regularly came on for final hearing upon the said complaint and testimony, and the Commission having duly considered the matter and being now fully advised in the premises, finds ~hat this proceeding is in the interest of the public and makes this its find- Ings as to the facts and its conclusion drawn therefrom. FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondents, William H. Ka~pf and Earl H. Wilson, are individuals, with an office and principal place of business at 330 South Wells Street, Chicago, Ill. llespondent, \Villiam H. Kampf, in the 656. FEDERAL TRADE COMMISSION DECISIONS Findings 38 F. T. C.

conduct of. his business, has traded under the name The Tracer System, and has also used the names Character Reference Bureau and U. S. Pencil Sales; he resides at Clifton, Ill.

PAR. 2. Respondent, Kampf, is now, and has been for more than three years last past, engaged in the business of selling and distributing, under the name The Tracer System, printed mailing cards designed and intended to be used by creditors and collection agencies in obtaining information concerning debtors ..

Respondent, Kampf, causes said cards to be transported from his aforesaid place of bu~iness in the State of Illinois to purchasers thereof in various States of the United States and in the District of Columbia. Said respondent maintains, and at all times mentioned herein has maintained, a course of trade in said cards in commerce between and among the various States of the United States and in the Disti·ict of Columbia. . PAR. 3. The said cards sold and distributed by respondent, Kampf, when using the name Character Reference Bureau are substantially in the form exemplified by a copy thereq,f, marked Exhibit A, and when using the name U.S. Pencil Sales, the cards are substantially in the form exemplified by a copy thereof marked Exhibit B.

The said Exhibits A and Bare attached hereto and by this reference are incorporated herein and made a part hereof.

· Upon the said cards were placed code numbers by which the said respozident was enabled to identify the different purchasers. The purchasers of the Character Reference Bureau cards addressed them to persons whom they believed able to furnish the desired information concerning the persons with reference to whorri the inquiry was made. The purchasers of the U. S. Pencil Sales cards addressed them to the persons concerning whom the information was sought at their last known addresses. The purchasers placed on the cards the postage necessary for their delivery to the addresses and return, and caused them to be delivered to 330 So. Wells St., at Chicago, Ill. . . Respondent, Kampf, deposited the individual cards in the United States mail.

~uch of the reply cards as were returned were received by respondent, Kampf, or forwarded to him by respondent, Wilson, the purchasers identified by the code numbers, and the reply cards sent to the appropriate purchasers. To the persons who returned the U. S. Pencil Sale~ cards, were sent ordinary lead pencils about three and one-half inches in length. · For the services rendered by Wilson he was compensated by Kampf. These services consisted of furnishing Kampf with an office at which mail addressed to U. S. Pencil Sales and Character Reference Bureau could be delivered, and on occasion sending to Kampf bundles of cards sent by his customers for mailing and reply cards which had been re- . ceived at the office. Other than this, respondent, Wilson, had nothing to .do with the conduct of the enterprise.

PAR. 4. By means of the U. S. Pencil Sales cards respondent, Kampf, has falsely represented, and placed in the hands of purchasers· of said cards means of falsely representing, directly and by implication, to the addressees o( said cards, that the pencils referred to were of such a character that the friends and fellow employees of the recipients of the cards might be interested in purchasing said pencils; that the proposal of a free pencil was made as an advertising offer for the purpose of introducing the pencils 1'0A PENCIL FREE To Advertise Our Pencils :t W Ono of Them o Will Sond You ABSOLUTELY free- NO B I • . OBLIGATION AU we ask Js that you 1how our penc:n to your world friends and fellow·amployeel where you i T~ avoid must name of employer dupli~ation1 bt II g•ven. I Act prombtly. Only • limited number of tl,e .. i I will pencils e given away. Y01.1r pencil will be I I card Mnt you as soon as this is returned. I FILL. OUT AND MAIL THIS CARD AT ! ONCE !! iI ! 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WELLS STREET "0 N 311::1 CHICAGQ. ILLINOIS >.0 <:0 WILLIAM H. KAMPF ET 1\.L. ' 659 i 652 Findings 'li :1 'li to prospective purchasers; and that only a limited number of pencils. would be given away. ·I~ PAR. 5. Through the use of the name "U.S. Pencil Sales" respondent, Kampf, has represented, and placed in the hands of purchasers of said cards the means of representing, directly and by implication, that he is in the· business of selling and distributing pencils. ' PAR. 6. The said representations were false and misleading. In truth and in fact the pencils sent to those who returned the U. S. Pencil Sales cards were not of such a character as to be of any possible interest to persons to whom they might be exhibited, were readily obtainable in any community, and were not sent as a method of getting their merits before possible purchasers. The said cards were not sent as a means of promoting t~o sale of pencils, but had as their sole purpose the obtaining of information concerning .the recipients. The number of pencils to be given away was not limited. Respondent, Kampf, was not engaged in the business of selling and distributing pencils. The whole scheme was merely a subterfuge for obtaining information to facilitate the collection of alleged delinquent accounts by Kampf's customers, and the said name was merely a disguise for the true nature of the business. PAR. 7. By means of the "Charactel" Reference Bureau" cards, re- , spondent Kampf has falsely represented, and placed in the hands of purchasers of said cards means of falsely representing, directly and by implication to persons from whom information concerning others was sought, that the inquiry was for the purpose of identifying the person concerning whom it was made, and determining whether his character was such as to make him worthy of a responsible position. . Through the use of the name "Character Reference Bureau" respondent, Kampf, has represented, and placed in the hands of purchasers of said cards means of falsely representing, directly and by implication, that he was engaged in the business of obtaining information concerning the characters of individuals.

The said representations were false and misleading. In truth and in fact i·respondent, Kampf, was not engaged in the business of obtaining information concerning the characters of individuals. The information sought by means of the "Character Reference Bureau" cards was ·not for the purpose of identifying the persons concerning whom the information Was sought or of determining whether the characters of said persons were such as to render them worthy of employment in responsible positions. :rhe sole purpose of said cards was the obtaining of information concern- Ing the persons named therein. The whole scheme was 'merely a subterf~ge for obtaining information to facilitate the collection of alleged dehnquent accounts by Kampf's customers and the said nam"e was merely a disguise for the true nature of the business. . .PAn. 8. The use, as hereinabove set forth; of the foregoing false and Ill.Misleading statements, representations and designations had the capacity a~d tendency to, and has, misled and deceived many persons to whom satd cards :were sent into the erroneous and mistaken belief that the said statements, representations and designations were true, and by reason thereof to give information which they would not otherwise have supplied. .660 FEDERAL TRADE COMMISSION DECISIONS Order 38F. T. C.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon complaint of the Commission and testimony taken before Arthur F. Thomas, an examiner of the Commission theretofore duly designated by it, in support of the allegations of the complaint, and in opposition thereto, respondents having waived all intervening procedure and further hearing as to the facts, and the Commission having made its findings as to the facts and its conclusion that respondent, William H. Kampf, has violated the provisions of the Federal Trade Commission Act. It is ord_ered, That the respondent, William H. Kampf, an individual, his representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of post cards or other mailable matter in commerce, as "commerce" is defined in the Federal Trade Commission Act; do forthwith cease and desist from:

1. Using the words "U. S. Pencil Sales," or any other word or words of similar import, to designate, describe or refer to respondent's business; or otherwise representing, directly or by implication, that respondent's business is that of selling or distributing pencils. 2. Using the words "Character Reference Bureau," or other word or words of similar import, to designate, describe or refer to respondent's business; or otherwise representing, directly or by implication, that respondent's business is that of obtaining information concerning the characters of individuals. · 3. Representing, directly or by implication, that the giving of information requested by such post cards or mailable matter by the recipients thereof is for the acceptance of an advertising or introductory offer of free goods, or that the amount of such goods is limited . . 4. Representing, directly or by implication, that the information sought from the recipients of such post cards or mailable matter is for the purpose of identifying any person and determining his fitness of character for a responsible position.

5. Selling ,or distributing post cards or other mailable matter which represent, directly or by implication, that respondent's business is other than that of obtaining information to be used in the collection of debts; or which represent, directly or by implication, that the information sought through such letters is for any purpose other than for use in the collection of debts.

It is further ordered, That the respondent shall, within 60 days after service upon him of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which he has complied with this order.

And it is further ordered, That the proceeding be, and the same hereby is, dismissed as to respondent, Earl H. Wilson. . . MOTLOID co., INC. ET AL. 661 I Complaint 1: I