Stanley L. Rose

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IN THE l\IA TTER OF STANLEYL. ROSE ET AL. DOING BUSINESS AS SEV\T-EZY J\tla.CHINE CO:MP ANY, ETC, CONSENT ORDER, ETC" IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\HnSSION ACT Docket 6295. Colnplalnt, Feb. 1955-Decision, July, 1955 Consent order requiring a retailer in Hillside, Md., to cease " bait" advertising of his new and reconditioned vacuum cleaners and sevi'ing machines for the purpose of obtaining leads to prospects, and to cease representing falsely guarantees of his products, makers of his new vacuum cleaners, and the length of his time in business.

Before 1/-/ ?' James A. Purcell hearing examiner, 1/-fr. 1/-ficlwelJ. Fitale for the Commission, jJ1?' . Jack Pel,ltz of 1Vashington, D. C., for respondents. COMPLAINT 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 Stanley L. Rose and Ruth Rose, individuals, trading and doing business as Sew-Ezy Machine Company, Sew-Ezy Sewing l\1machine Company, Sew-Ezy Vacuum Cleaner Company and Sew- Ezy Sewing Machine and VacuUln Cleaner Company, 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 thatrespect as follows: PARAGRAPH 1. Respondents Stanley L. Rose and Ruth Rose, are individuals trading and doing business as Sew-Ezy Machine Company, Sew-Ezy Sewing l\1machine Company, Sew-Ezy Vacuum Cleaner Company, and Sew-Ezy Sewing l\1machine and Vacuum Cleaner Company. Said respond~nts, Stanley L. Rose and Ruth Rose, cooperate and act together in performing the acts and practices hereinafter set forth. Respondents' office and principal place of business is located at 5156 Benning Road, S. E., Hillside, M:maryland. PAR. 2. The respondents are now, and for more than one year last past have been, engaged in the sale and distribution of vacuum cleaners and sewing machines. In the course and conduct of their said business respondents have caused their vacuum cleaners and sewing , Complaint 52 F. T. C.

machines when sold, to be transported from their place of business at the aforesaid address to purchasers thereof located in the District of Columbia and in various States or the United States. They maintain, and at at all times mentioned herein have l'naintained, a course of trade in said products in commerce among and between various States of the United States and the District of Columbia, Their volume of trade in said commerce has been and is substantial. PAR. 3. At all times mentioned herein respondents have been, and are now, in direct and substantial competition "\with corporations firms and other individuals engaged in the sale and distribution of vacuum cleaners and sewing machines in commerce. PAR. 4. In the course and conduct of their business, as aforesaid and for the purpose of inducing the purchase of their vacuum cleaners nd sewing machines, the respondents have engaged in extensive advertising in newspapers and on radio. Among and typical of the statements and representations made in such advertising relating to their said products are the following:

SEW-EZY Vacuum Cleaner Co.

JQ. 8-5400 5156 Benning Rd., S. E. Large Size Rebuilt ELECTROL UX but everyone runs like new! (Picture of vacuum cleaner) with attachments This is the Famous Model 12 Vacuum Fully GlIa:l'a'ldec(l Special Purchase Call JO. 8-5400 FOR FREE HOME DEMONSTRATION $9.

Call ST. 3-4000 after 6 P. M.

OPEN MON. WED., FRI. ' TIL 9 For Your Shopping Convenience SEvV-EZY VACUUM CLEANER CO.

JO, 8-5400 5156 Benning Rd., S. E. FAMOUS MAKE VACUUM CLEANER Save over 500/0 Summer Special (Picture of vacuum cleaner) with attachments Absolutely Brand New 1954 Model Fully GlIara.nteed Special Purchase Call JO. 8-5400 For Free Home Demonstration Limited Quantity $16.

Reserve Yours NOW Call ST. 3-4000 after 6 P. M.

OPEN MON., WED., FRI., 'TIL 9 For Your Shopping Convenience SEW-EZY MACHINE CO. , ETC.

Complaint Here s what you get for the total price of $13.50. You get a New famous make vacuum cleaner. You get the complete Goodhousekeeping set of attachments, the floor brush, floor tool, rug tool, upholstery tool, crevice tool, dusting brush, paint sprayer and demothing attachment free with your vacuum cleaner. Plus while they last you ll get free with your nationally famous vacuum cleaner, a 24 piece set of silverware, 6 knives, 6 forks, 6 tablespoons, 6 teaspoons, all free with your vacuum cleaner. Remember only 20 people daily can be accommodated on this outstanding offer and the supply is limited so you must hurry. Here s what to do-pick up your phone and call Overlook 3000, Overlook 3-3000, leave your name and address and phone number, and at your convenience a Sew-Ezy Company representative will come to your home to fully demonstrate this sensational vacuum cleaner. He ll clean your rugs your closets, your blinds, anything that you d like for him to do. He ll show you what a. wonderful buy this vacuum cleaner is. You inspect it, you look it over, you try it, and if you like it, and want it, you make just a small down payment, and keep the vacuum cleaner. * rhe Sew-Ezy Company handles the finest vacuum cleaners in the world. Eledrolux, General Electric, \Vestinghouse, Lewyt and Premiers. Just arrived at the Sew-Ezy Company is a full shipment of new vacuum cleaners. \Ve are o"erloa(~ed, and will have to get rid of these vacuum cleaners. These vacs must be sold and the Se\v-Ezy Company is reducing the price of a famous make vacuum cleaner down to a low, low $13.50 * * * . If you like a free home trial dial no,v Overlook 3-3000, Overlook 3-3000. W'e can save you up to $100, up to a hundred dollars. Try before you buy, that's been the Se,v-Ezy ~lotto for 25 years. Try before you buy. This is definitely a famous make vacumn cleaner, advertised nationally and reduced just in time for fall cleaning to Thirteen and a half dollars. Also as a part of our get acquainted offer, we send out free a parakeet for the children or for yourselves a lovely 24 piece set of silverware. We have mobile units to service you whether you live down in Fredericksburg or out at Hagerstown, Maryland or live right here in "lashington, D. C.

Announcing a Sew-Ezy rebuilt Electrolux Vacuum Cleaner for only nine dollars and fifty cents and everyone runs like new. * * * This is the famous Model 12 Vacuum. The large size Electrolux with all parts guaranteed. * * * The price has been brought down for clearance-down to $9. , saving you many, many dollars on the regular catalog listing. Here are Electrolux Vacuum Cleaners rebuilt by the Sew-Ezy Company experts using all brand new parts-guaranteed. * * * What makes this a wonderful buy for you honsewives or Government girls-is the goodhousekeeping set of attachments-the floor buffer-the demother, the paint sprayer, the crevice tool for hard to get at places-many other attachments-this complete set of tools will be yours free along with the Electrolux. * * * Just arrived at the Sew-Ezy Company. Just arrived at the Sew-Ezy Company are some wonderful Singer Sewing machines. These Singers are all guaranteed, rebuilt by the Sew-Ezy experts with brand new parts. * * * You can sew fall clothes for the kid dies going back to school or for the pre-school children * * *. 1Ve n come to your apartment, place it there for you to use and you can sew garments, clothes, anything under the sun free of charge as part of your free home trial offer. For 25 years, our motto has been Try before you buy, and Madam, if you don t know how to sew don t be ashamed of that for one moment because our polite, courteous Sew-Ezy representative will show Complaint 52 F. T. C.

you how to sew, Just dial Overlook 3-3000, the price is only $18.50 * * * . Also free to you will be a lovely and entertaining l1arakeet bird for the children or a set of 24 piece silvenvare absolutely free because we are getting acquainted. * * * PAR. 5. By and through the use or the aforesaid statements and representations, and others of similar import, but not specifically set out herein, respondents represented, directly or by implication: 1. That they were making a bona fide offer to sell new and recon:ditioned vacuum c1e-aners and ne,\' and reconditioned se\yin~: machines at the low prices specified in the advertising. ~. That their products were glUtranteel1.

3. That they have been engaged in their present business of selling vacuum cleaners and sewing machines for 25 years. 4. That the new vacuum cleaners offered for sale are of a famous make.

PAR, 6, The aforesaid statements and representations ,,-ere false deceptive, and misle,ading, In truth and in fact: 1. The said cleaners and sewing machines "would not do a satisfactory job of cleaning and sewing, respectively, and the said offers , were not genuine or bona fide offers in that respondents did not intend to sen the cleaners and sewing machines advertised, but 'were made for the purpose of obtaining leads and information as to the persons interested in the purchase of vacuum cleaners and sewing machines, After obtaining such leads, through response to said advertisements respondents or their salesmen, called upon the persons so responding at their homes or waited upon them at respondents' place of business and, in many instances, demonstrated such cleaners Hnd sewing machines, "en knowing that their performance ,,' oulcl be unsatisfactory;, made an offer to sen the advertised cleaners and sewing machines, but in many instances belittled and c1isparag'ed sneh cleaners and sewing' machines, and attempted to, and frequently did, sell different and much more e,xpeJlsive vacuum cleaners and sewing machines to such persons. 2. R,respondents' use of the word " guaranteed" without disclosing the terms and conditions of the guarantee is confusing anc1misleading to the purchasing public.

3. Respondents have been engaged in their present business of selling vacuum cleaners and se",ing machines for substantially less than 25 years.

4. The vacuum cleaners represented as being of a famous make in the aforesaid advertisements are not of a famous make, PAR. 7. The use by the respondents of the aforesaid false, deceptive, and misleading statements, representations, and practices had the tendency and capacity to mislead and deceive a substantial por- SEW-EZY MACHINE CO" ETC.

Decision tion of the purchasing public into the erroneous and mistaken belief that such statements and repre,sentabons were true and, because of such statements, representations, and practices, to purchase substantial quantities of respondents' vacuum cleaners and sewing machines particularly their more expensive vacuum cleaners and sewing machines. As a result thereof, substantial trade in commerce hasbeen unfairly diverted to respondents from their competitors and. substantial injury has been and is being done to competition in commerce.

PAR. 8. The aforesaid acts and practices as herein alleged, are all to the prejudice and injury of the public and of respondents' competitors and constitute unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. INITIAL DECISlOX BY J .DIES A. PURCELL, HEARING EXAMINER 1. The Federal Trade Commission on February 18, 1955, issued its complaint in this proceeding charging respondents with specific unfair and deceptive acts and prac6ces and unfair methods of competition in commerce in violation of the Federal Trade Commission Act as will with particularity appeal' ~y reference to said complaint. ~Iarch 16, 1955 , respondents filed answer in form of a general denial of the allegations of the complaint, and specifically, intel' alia denying that respondent, Ruth Rose, is a co-partner or otherwise connected with the described business other than to assist respondent, Stanley L, R-ose (her husband), in the business. 2, Thereafter, on ~fay 21 , 1955, respondent, Stanley L. Rose, entered into a Stipulation or Agreement for Consent Order with counsel supporting the complaint, all in conformity with Rule No. 3,25 of the Commission s llules or Practice, Thereafter said Agreement was submitted to the hearing examiner who, being of opinion that said Agreement effectually disposes of aU of the issues herein, hereby aC0epts same with the proviso that this Initial Decision shah not become a part of the official record of this proceeding unless and until it becomes the official decision of the Commission. 0, The Agreement recites that respondent, Stanley L, Rose, during the period charged, has been engaged in, and trading under the names of Sew-Ezy :afachine Company, Sew-Ezy Sewing l\fachine Company, Se",-Ezy Vacuum Cleaner Comptlny, RIHI Sew-Ezy Sewing ~lachine and VHeuum Cleaner Company with his office and principal place of business located at No. ;)156 Benning Hoad, S. E., Hil1side ~:faryland. It win he noted that respondent, Ruth Rose, is not a party ... , Decision 52 F. T, C.

signatory to said Agreement, with respect to whom there accompanied said Agreement an affidavit by her to the effect that she is not associated or connected with her husband, Stanley L, Rose as owner or copartner in his business undertaking; that she is not engaged in the sale and distribution of sewing machines and vacuum cleaners, and renders only such assistance to her husband in his business as she possibly can and as a ,yife should, 4. All parties move that the ans"wer filed on ~farch 16, 1955, be withdrawn of record and held ror naught, which motion is hereby granted.

5. By said agreement respondent specifically admits all of the jurisdictional allegations set forth in the complaint and agrees that the record herein may be taken as though the hearing examiner or the Commission had made findings of jurisdictional facts in accordance with such allegations; that the order therein agreed upon shall have the same force and effect as though"h made UDOll a full hearing, presentation of evidence and findings and eonc1usions based thereon, speeifieally waiving any and all right, power or privilege to contest the validity of said order and that the complaint herein may be used in constructing the terms of said order, which order may be altered, modified or set aside in the manner provided by statute affecting orders of the Commission, 6. All or the parties to said Agreement waived a hearing before a hearing examiner or the Commission; the making of findings of fact or eoncl nsions of law by the hearing examiner or the Commission; the filing of exceptions and oral argument before the Commission; and all further and other procedure berore the hearing examiner and the Commission to which the respondent might otherwise, but for the execution or said Agreement, be entitled under the Federal Trade Commission Aet or the Rules of Practice of the Commission; and further, that said Agreement, together with the complaint, shall constitute the entire record herein. The Agreement further provided that same was executed for settlement purposes only and does not constitute an admission by the respondent that he has violated the law as alleged in the complaint, 7. On the basis of the representations contained in the affidavit of R.uth Rose, and nothing to the contrary appearing of record, the eOffiplaint, as to her, will be dismissed.

8, Pursuant to the intent of said Agreement and or the facts therein agreed upon, and that the order embodied therein is in aecord with the order l:si accompanying the complaint exce,pting only as to the l1named respondent, Rnth Rose, the hearing exaIl1il1er, being of opinion SEW-EZY MACHINE CO. , ETC.

Order that the order agreed upon will effectually safeguard the public interest; finds that this proceeding is in the public interest and issues the following order:

ORDER It is ordered That respondent Stanley L. Rose, an individual trading and doing business as Sew-Ezy l\fachine Company, Sew-Ezy Sewing l\1machine Company, Sew-Ezy Vacuum Cleaner Company, and Sew-Ezy Sewing lVIachine and Vacuum Cleaner Company, or trading and doing business under any other name or names, and respondent' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of sewing machines and vacuum cleaners or other merchandise in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist fronl: 1. Representing, directly or by implication, that certain merchandise is offered for sale when such offer is not a bona fide offer to sell the merchandise. so offered;

2. Representing, directly or by implication, that any merchandise sold or offered for sale by respondents is guaranteed, unless the nature and extent of the guarantee and the manner in which the guarantor will perform thereunder are clearly and conspicuously disclosed; 3. Representing directly or by implication, that he has been engaged in his present business of selling vacuum cleaners or sewing machines any number of years in excess of that.in which he has actually been engaged;

4. Representing, directly or by implication, that any merchandise being offered for sale is of a famous make when such is not the case. Fu(f'ther orde?' That the complaint, insofar as same affects the named respondent, Ruth Rose, be, and the same is hereby, dismissed. DECISION OF THE COl\HnSSION AND ORDER TO FILE REPORT OF COl\IPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 8th day of July, 1955, become the decision of the Commission; and, accordingly: It is ordered That the respondent, Stanley L. Rose, an individual trading and doing business as Sew-Ezy ~1machine Company, Sew-Ezy Sewing ~1machine Company, Sew-Ezy Vacuum Cleaner Company nnd Sew-EzySewing l\1machine and Vacuum Cleaner Company, shall ,within sixty (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 the order to cease and desist. Complaint 52 F. T. C.