Robert O. Bennett

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IN THE MA ITER OF ROBERT O. BENNETT DOING BUSINESS AS NATIONAL SERVICE BUREAU AND LILLIE K. BENNETT COMPLAINT, DECISION, FINDINGS, AND ORDER -IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 5745. Complaint, Mar. 1, 1950-Decision, Jan. , 195~ Where two individuals engaged under a Washington, D. C. mailing address in securing and selling to credit bureaus, retail stores, collection agencies and other customers in various states' information relating to delinquent debtors principally, and, as thus engaged in mailing out large numbers of letters and receiving replies thereto;

In attempting to secure desired information, for their said customers with respect to the addresses, employment, etc., of delinquent debtors, pursuant to arrangements whereby they were authorized by their customers to send a check for 10 cents to each replying delinquent, as below set forth, and to deposit such an amount to said person s credit in respondents' bank at the e~pense of the customer, and through the means of certain form letters, together with blanks for supplying the desired information as to the delinquent and, a self-addressed return em"elope- (a) Falsely represented through the use of the name "National Service Bureau in said form letters, and particularly as employed with the words "Disbursement Office" and "Disbursement Officer, that they were a part of or conuected in some manner with the Veterans Administration or some other part or agency of the United States Government; and (b) Falsely represented through the use of the words "If you will fill in the enclosed blank giving the requested information we will forward to you a check for a small sum of money deposited with us for that purpose, that a small but significant sum of money to which the recipient of the letter was entitled, had been deposited with them and would be forwarded to the recipient upon his furnishing information which would identify him as the person entitled thereto;

The facts being that they were not connected with the United States Government in any respect; and the sending by them of such a check for 10 cents did not justify their statement that a small sum of money had been deposited with them for forwarding, and constituted a transparent scheme to mislead and conceal the purpose for which the information was sought; With effect of misleading a substantial portion of the public into the mistaken belief that their misleading representations were true, and with capacity and tendency so to do, and thereby induce a substantial number of the public to give information which they would not otherwise have supplied: Held T~a t 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 111" . Webster B allinger hearing examiner. Mr. J. W. Brookfield, Jr. for the Commission. NATIONAL SERVICE BUREAU 737 736 Complaint Reilly ill Neu1M/nn and Byrne & Byrne, of Washington, D. for responden ts.

COMPLAINT 1 Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federfll Trade Commission, having reason to believe that Robert 0. Bennett an individual trading and doing business as National Service Bureau and Lillie K. Bennett, an individual, hereinafter referred to as respondents, have violated the provisions of 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 complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Robert O. Bennett is an individual trading and doing business under the name National Service Bureau. Both respondents, Robert O. Bennett and Lillie n::. Bennett, live and carryon their- business at 504 Aspen Street, N. W., in the City of Washington, D. C., but the mailing address used by National Service Bureau is 505 Colorado Building, Washington, D. C. Respondents Robert O. Bennett and Lillie I(. Bennett cooperate and act together in performing the acts and practices hereinafter alleged. PAR. 2. Respondents are now, and for more than two years last past have been engaged in the business of locating delinquent debtors and in selling information as to these debtors to their clients. Certain of respondents' clients cause goods and other property to be transported from their places of business in various States of the United States to purchasers thereof in other States of the United States and 1 The complaint is published as amended by an order granting motion to amend complaint to conform to proof dated December 29, 1950, as follows: This matter coming before the Commission upon motion of counsel supporting the complaint to amend the complaint herein to conform to the proof, and it appearing counsel for the respondentsha ve. acknowledged receipt. of copy of said motion and have waind the filing of an answer and further notice and the Commission having duly considered the matter, and the record, and being now fully advised in the premises: It is o'"denJd, That the motion to amend the complaint to conform. to the proof be, and the same hereby is, granted.

It is further ordered(l That the complaint heretofore issued be amended as follows: By striking that portion of Paragraph Five which reads as follows: Through the use of the name 'National Service Bureau' and the phraseology Disbursement Officer' and ' Disburse.m~mtOffice, and inserting in lieu thereof the following: Through the use of the name "National Service Bureau, " and also through the use of the phrase "Disbursement Officer" and also the phrase "Disbursement Office, " in connection with the name "National Service Bureau. It is further o1.dered That the evidence heretofore . taken be, and the same hereby is, adopted as evidence in connection with the complaint as herein amended to the same extent and to the same effect . as if such evidence hndbeen originally taken under the complaint as herein Iimended.

738 FEDERAL . ~I~\ADE' COlViMISSION DECISIONS Complaint 48 F. T. C~ maintain and at all times mentioned herein have m.aintained courses of trade in such goods and property in commerce between and among the United States. Some of respondents' clients are located in Chicago Illinois; Cincinnati, Ohio; New York, New York and other cities and States throughout the United States. The course and conduct of respondents' said business invoh"es intercourse of a conll11ercial and business nature between them and their clients and the persons from whom information is sought who are located in the various States of the United States.

PAR. 3. In the course and conduct of respondents' said business of obtaining information concerning other persons, respondents use certain form letters substantially in the following form: THE NATIONAL 8ETIVICE BuHEAU, Culo),(lIlo Buildillg, Washil/!/ton D. Office of n. O. Bennett Room 505 DEAR l\lad.ur: If you will fill in the illelof;et1 blank giving the reqne:oted illfol'llJiltion we will forward ~' on a check for a small sum of woney del1Mitec1 with for you for that purpose.

Very truly yours, (8) Rom:RT BENNETT, Disbu:l'sement Officer. Enclosed with the above-mentioned letter is a reply form for the recipient to fill in the information desired by respondents. This form is headed:

DISBURSElIIEXT OF1!'ICE THE National ~EnVICE BUREAU 505 COLORADO BUILDING WASHINGTON 5, D. c.

followed by lines showing the information requested and' also bears the following statement:

CLAIM NUMBER 18241101.

Fiu in and return this blank within 30 days. Allow two weeks for mailing the check.

PLEASE 'TYPE OR PRI);T I:\"FOR7IIATION GIVE COMPLETE INFOR),IATION TO EXPEDITE MAILIXGOF CHECK PAR. 4. Respondents mail the said form letters to the persons concerning whom information is sought at their last known addresses together with an envelope addressed to "The National Service Bureau Colorado Building, "\Vashington, D. C., Disbursement Office, Room 505 " fol: the return of said form letters. ~lany of the persons to whom said fonll letters and return envelopes are S~llt' a:r~, located in the various states of the United E;states outside of the District ofColumbia. . NATIONAL SERVICE BUREAU 739 736 Decision PAn. 5. Through the use of the name "National Service Bureau and also through the use of the phrase "Disbursement Officer" and also the phrase "Disbursement Office " in connection with the name "N ational Service Bureau. Respondents represent that National Service Bureau is an agency of the .United States government or has some connection with one of the governmental ~gencies. Said representations are false and misleading. In truth and in fact respondents are in no way connected with the Federal Government, but conduct the said business as a private enterprise for the receiving of fees for information concerning allegedly delinquent debtors. Through the use of the said form letters, respondents represent directly and by implication that certain funds have been deposited with them for the persons to "whom the letters are sent and cause the recipients of said letters to furnish them information in the false belief that they, the recipients, are to receive substantial sums of money.

In truth and in fact responde,nts have not received money to be deposited for these persons and they receive nothing except a check for ten cents which is sent by respondents upon receipt of the information.

PAR. 6. The use as hereinabove set forth of the foregoing false and misleading statements, representations and designations has, alid has had, the capacity and tendency to mislead and deceive, and has misled and deceived, many persons to whom the said form letters were sent into the erroneous and mistaken belief that the said statements and representations were true; and that the trade name used by respondents indicated the true nature of respondents' business; and induce the recipients thereof to give information to respondents which otherwise they would not have supplied.

PAR. 7. The afoI'esaid acts and practices of respondents, as herein alleged, 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. DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission, on March 1, 1950, issued and subsequently served its complaint in this proceeding upon respondents Robert O. Bennett, an individual trading and doing business as N tional Service Bureau, and Lillie K. Bennett, an individual, charging them with the use of unfair and deceptive acts and practices in com- 740 FEDERAL TRADE COl\.JMISSION DECISIONS Findings 48 F. T. C..

After the issuancemeree in violation of the provisions of said Ad. of said complaint and the. filing of respondents' answer, hearings were held at which testimony and other evidence in support of and in opposition to the allegations of said complaint were introduced before a hearing examiner of the Commission theretofore duly designated by it and such testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter; the. proceeding regularly came on for final consideration by saiel hearing examiner upon the complaint, the. answer thereto, testimony and other eviden('e proposed findings as to the facts and conclusions presented by counsel, and saiel hearing examiner, on January 30, 1951, filed his initial cleeision. 'Within the time permitted by the. Commission s Rules of Practice counsel for respondents filed with the Commission an appeal il' om said initial decision, and thereafter this proceeding regular)y tame on for final consideration by the Commission upon the rpconl herein, including briefs in support of and in opposi tion to the appeal :uHl oral argument of counsel; and the Commission: having issued its order granting said appeal in part and denying it in part and being nOYI TnHy advised in the premises, finds that this proceeding is in the interest. of the public andl11akes this its findings as to the facts and its conclusion drawn therefrom and order, the same to be in liell of the initial dec.ision of the hearing examiner.

FINDINGS AS TO THE J'ACTS :i~ all individual trad- PARAGRAPH 1. Respondent Robert O. Bennett St'TV1C'E', Bu- ing as and doing business under-r the, name The. National reau. Both respondents, Robert O. Bennett and Lillie IC Bennett, live and carryon said business at 504 Aspen Street, N. '"'V. , in the city of mailing address 706 vVashington, D. C., and use as a business and , D. where an office is main- Thirteenth Street, N. 'V., 'Vashington tabled and used primarily as an adch'ess for the rec.eipt of mail. Respondents formerly maintained an ofli.c.e,' at 505 Colorado Building, 1\::. Washington, D. C. Respondents Robert O. Bennett and Lillie Bennett cooperate and act together in performing tile acts and practices hereinafter described.

PAR. 2. Respondents are now and for more tha.n four years last selling to past have been engaged in the business of securing and their customers information relating to delinquent debtors, e.xtension of credit and for other purposes; their principal business being consist of that of locating delinquent debtors. Their customers credit bureaus maintained by business and professional organizations retail stores, collection agencies, attorneys, and finance companies desiring information principally with reference to delinquent accounts. NATIONAL SERVICE BUREAU 741 736 Findings Their customers and the persons about WhOlll information is sought andare located throughout the various States of the United States in the District of Columbia. Respondents' business is principally conducted by mail. They weekly transmit approximately 2 100 letters seeking the above-described information and receive approximately 700 replies thereto. The conduct of respondents' business constitutes intercourse of a commercial nature between. them and the persons as "commerce" isfrom whom information is sought in commerce, defined in the Federal Trade Commission Act. PAR. 3. Respondent Robert O. Bennett has been in the collection business for more than 15 years. About five years ago he conceived and put into practice a plan involving the use of a n1ail skip tracer to secure credit information from delinquent debtors, which plan respondents have used ever since and are now using. A pamphlet issued by respondents contains the following description of a mail skip tracer:

1. WHAT IS A MAIL SKIP 'I'RACER? A mail skip tracer is a piece of mail which offers an inducement for its. recipient to reveal his address, employment, phone number, and other pertinent information which may be used by his creditor in obtaining payment of money due.

2. IN 'VHAT CASES SHOULD A MAIL SKIP TRACER BE USED? 3.. If ;yon send mail to an address, and it is not returned to you, you Imow that this person is getting his mail at this address or it is being forwarded by the Post Office to him. Neither the Postmaster nor any one connected with the Post Office may give you this information as to where your skip is and only by using an inducement such as a mail sldp tracer can you find him. b. When your mail is delivered and you lmow the person is at the given address, but ~'ou do not know where he world;;:s or banks, and this information would be valuable to you, the inducement offered in the mail skip tracer will more than likely get this information for you. 3. WI-L'~T MAKES A MAIL TRACER ILLEGAL? Any piece of mail which obtains information by the use of subterfuge is illegal. THE NATIONAL SERVICE BUREAU does NO'l' use subterfuge. PAR. 4. In the course and conduct of their business of securing respondents credit information by the use of a ll1ail skip tracer, receive from each of their customers an authorization, bearing the signature of the customer, on the following form supplied by respondents:

PLEASE TYPE OR PR.INT ALL NAMES AND ADDRESSES THE NATIONAL SERVICE BUREAU 706 13th Street NW., 1Vash-ington 5, D. C. GENTLEMEN: Please attempt to obtain all information you can from the fol.. lowing persons from whom mail bas not been returned. Please send a check 742 FEDERAL TRADE, COMMISSION DECISIONS Findillgs 48 F. T.

for 10~ to each person listed below sending ~'ou the information you request in payment for this information. Please deposit 10~ to this person s credit in your bank and charge this 10~ to our account and credit our account with all deposits not paid out by you at the end of each month. We agree to pay' rou the sum of 25~ for an address; 50~ for an address, a phone number, and/or one or more relatives or references; $1.00 for employment and/or bank. In the case of a bank and no employment, you are to refund us 50~ upon being notified the bank was of no use to us. We also agree to pay a - charge of 10~ for all returned mail, proof to be furnished to us. \Ve understand that your maximum charge for any one locate is $1.00 plus the 10~! deposit fee. agree to keep all information confidential. (Please use both sides of this sheet) SEND NO MONEY-YOU WILL BE BILLED MOK'l'HLY NO RESULTS-NO CHARGE Name ---- Street__- -- Ci ty -- - S ta te__ Zone By - --- -- Upon receipt of such authorization respondents mailed to each of the persons listed at the address furnished the following form letter: THE NATIONAL ise:JRVICE BUREAU WASHINGTON 5, D. C.

DISBURSEMENT OFFICE If you will fill in the inclosed blank giving the requested information we will forward you a check for a small sum of money deposited with us for you for that purpose.

Very truly yours, (8) ROBERT BENNETT Disbursement Officer.

self-addressed return envelope with the words "Disbursement Office" appearing in the left hand corner, and a questionnaire were enclosed with the letter, the questionnaire being as follows: Disbursement DO NOT "'RITE Office-The National Service Bureau IN THIS SPACFJ Washington, D. C.

ClaimBelow is the required information.

Please send the check. Bureau Fill in and return blank within 30 days. File ---- AIJow two weeks for mailing check.

OI( By Check willl1ot be sent unless all information is given Date below. TYPE OR PRINT ALL INFORMATION.

N A~iE NO. AND STREET - _ .:. ...:__..:._ . _.:.__ _.:. NATIONAL SERVICE BUREAU 743 736. Findings CITY ---------------------_ STATE ----------------- 0 COUP A '1.' ON - - EMPLOYED BY EMPLOYER' S AD DRES S - - HUSBAND OR WIFE' S NAME ---------------------- EMPLOYED BY AD D RE S S -- HOME PHONE BUSINESS PHONE BA:..TI( WITH ~\D D RE S S - REFEREN cE DD RES S - REFEREN CE - - ADD RE S S Upon receipt of each form of questionnaire filled in by the person to whom it was sent, respondents mail their check for ten cents to that person. Each questionnaire when filled in and returned to respondents is forwarded by them to the customer requesting the information, together with an itemized hill for the information secured and inc.lu(ling a charge for the ten cents paid out. No charge is made if no reply is received.

After the issuance of the complaint, respondents eliminated the words "Disbursement Officer " appearing after the signature of "Robert Bennett" on said form letter, and the words "Disbursement Ofiice from the questionnaire and from the return envelopes. PAR. 5. Through the use of the name "The National Service Bureau" alone. and more particularly when used together with the words "Disbursement Office" or "Disbursement Officer" in the manner hereinabove described, respondents have represented that ti1ey were a part of or connected in some manner with the Veterans Administration or some other part or agency or the United States Government. Through the use of their form letter stating "If you will fill in the inclosed blank giving the requested information we will forward to you a check for a small sum of money deposited with us for that purpose " together with the enclosed blank as above described, respondents have represented that a small but significant sun1 of money to "which the recipient of the letter is entitled has been deposited with respondents and that this money will be forwarded to the recipient of the letter upon his furnishing sufficient information by means of which he can be identified as the person entitled to the money. PAR. 6. In _fact respondents are not connected with the United States Government in any respect. No sum of money to which any recipient. of these letters is entitled has been deposited with respondents and no sum of money has been forwarded by respondents other than respond- 744 FEDE:RAL 'I'TRADE COMMISSION DECISIONS Ordf'l' 48 F. T. C.

ents' check for ten cents which is sent to each person furnishing the requested information. This payment of ten c~nts does not justify respondents' statement that a small sum of money has been deposited with them for forwarding. This practice is a transparent scheme to misle.ad and conceal the purpose for which the information is sought. PAR. 7. The use by the res,pondentBof the' name "Then ational Service Bureau" and their use of the other false, misleadil)g and deceptive statements and representations as herein above described have the tendency and capacity to and did mislead a substantial portion of the public into the erroneous and mistaken belief that respondents are connected with or are an agency of the United States Government and that their other said false, misleading and deceptive statements and representations are true and to induce a substantial number of the public, because of such mistaken and erroneous belief, to give respondents information concerning their prese,nt location, employment and financial condition which they would otherwise not have supplied. CONCLUSION The aforesaid acts and practices of respondents as hereinbefore found are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in eomll1erce within the intent and meaning of the Federal Trade Commission Act. ORDER It ls o1'dered That Robert O. Bennett and Lillie IC Bennett, individuals, trading as The National Service Bureau or trading under any other name or trade designation, jointly or severally, their representatives, agents and employees, directly or through any corporate or other device, in connection with the business of obtaining and selling information concerning delinquent debtors or other credit information in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

(1) Using the name "The National Service Bureau" or any other words of similar import to designate., describe or refer to respondents business, or otherwise representing, directly or by implication, that respondents are connected with or are an agency of the United States Government or that their business is other than that of obtaining and selling credit information.

(2) -Representing, directly or by implication, that money has been deposited with them for persons from whom information is requested unless or until the money has in fact been so deposited, and then only when the amount so deposited is clearly and expressly stated. NATIONAL SERVICE BUREAU 745 736 Order (3) Using any forms, letters, questionnaires, or other material, printed or written, which does not clearly and expressly state that the information requested is to be used for credit purposes. It is further ordered That said respondents shall, within sixty (60) days after service upon them of this order, file with the Commission a report! in .writing .setting forth. the manner and fonll in which they have complied with said order. .

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746 FEDERAL TRADE COMMISSION ' DECISIONS Syllabus 48 F. T.