Forrest A. Jones

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IN TEE MATTER OF FORREST A. JONES DOING BUSINESS AS OREGO HEARING CEXTER, ETC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO Tile ALLEGED V"OLATIOj" OF THE FEDERAL TRADE COM:rnSSION ACT Docket 6414. Complaint, Sept. 1955 Decision, Af.w. 28. 1950' Consent order requiring two individuals, ODe doing business in Portland, Oreg. and San Francisco, Calif., and both operating as partners in Seattle Wash. , to cease using "bait" advertising to sell their several types of hearing aids and making various false claims in advertising in newspapers and circulars and by radio broadcasts concerning them. Before Mr. William L. Pack hearing examiner. Mr. John J. Men ally for the Commission. Mr. Theodore D. Lachman of Portland, Orcg.. for res-pondents. CO:MPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Aet, the Federal Trade Commission, having reason to believe that Forrest A. Jones an individual doing business as Oregon Hearing Center, California Hearing Center and ,Vestern Hearing Center, and Forrest A. Jones and John A. I-Iolm, individuals and copartners doing business as 1Vashington Hearing Center, 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:

P AHAGRAPII 1. Respondent Forrest A. Jones is an individual doing business as Oregon Hearing Center, with his principal place of business located at 421 S. 'V. Sixth A venue, Portland, Oregon; said respondent is also doing business as California Hearing Center and as vVcsterll I-Iearing Center at 17 Grant Avenue, San Francisco California. Respondents Forrest A. .Jones and .T Oh11 A. ITolm are individuals trading as copartners and doing business as 'Vashington Hearing Center: with their principal place of business at 1520 ,Vestlake A vcnue, Seattle, 'Vashington.

PAH. 2. Respondents are now, and for more than one ye r last past have been, engaged in the advertising and sale of hearing aids and accessories, and in the advertising and sale of other products represented to be hearing aids, to members of the general public. OREGON HEARING CENTER, ETC. , ET AL. 1193 11fJ2. Complaint All of these products are devices as "device" is defined in the Federal Trade Commission Act.

PAR. 3. In the course and conduct of their business, respondents cause and have caused their said devices, when sold to be shipped from the State of Oregon to the purchasers thereof located in various other States of the United States; respondents also cause and have caused their said devices to be shipped from the State of Oregon tc respondents' stores located in the States of California and 'Vashington. Respondents maintain and at all times mentioned herein have maintained, a substantial course of trade in their said devices in commerce between and among the various States of the United States.

PAll. 4. R.respondents, at all times mentioned herein, have been in substantial competition, in commerce, with other persons and with corporate.ions, firms and partnerships engaged in the sale of hearing aid devices.

PAn. 5, In the course and conduct of the aforesaid business respondents, subsequent to March 21 , 1938, have disseminated and caused the dissemination of advertisements concerning the aforesaid devices by the United States mails and by various means in commerce, as "commerce" is deiined in the Federal Trade Commission Act: including but not limited to advertisements inserted in newspapers, by circulars and by radio continuities broadcast by stations with suffcient power to carry such broaucasts across State lines, for the purpose of inducing and which were likely to induce directly or indirectly, the purchase of said devices; and respondents have, disseminated and caused the dissemination of advertisements by various means, including but not limited to the means aforesaid for the purpose of inducing and which ,were likely to induce, directly or indirectly, the purchase of said devices in commerce, as commerce" is defined in the Federal Trade Commission Act. PAR. o. By means of statements made in advertisements disseminated as aforesaid, respondents have represented, directly and by implication, that:

1. The earphone receivers offered for sale are complete hearing aids, are transistor-powered aids, a.re invisible and will provide hearing to the deaf, will fit any ear, and have the approval of the American Medical Association and medical councils affliated therewith.

2. The bone conduction type of hearing aids offered for sale by respondents is a recent invention, is invisible, and enables deaf persons to hear every sound as well as do normal-hearing persons. 3, The "Hear- fold Tru-Ear" and "Ear-Aid" plastic ear canal openers offered for sale will enable all or most deaf people to hear Complaint 52 F. T. C. again, are the natural way to better hearing and were developed at a laboratory owned by respondents.

4. The air conduction hearing aiels offered for sale enable deaf persons to "hear everything; to "hear better, farther, more naturally" than with competitive brands of hearing aids; and give super power.

PAR. 7. The advertisements containing the aforesaid representations were and are misleading ill material respects and constitute false advertisements " as that term is defined in the Federal Trans Commission Act. In truth and in fact:

1. The earphone receivers offered for sale by respondents are not complete hearing aids, are not transistor-pO\vcrcd aids, are not invisible" will not provide hearing to the deaf, will not fit any ear and arc not now, and have not been, approved by the American J\1medical Association or any councils affliated therewith. 2. The bone conduction t.ype of hearing aids offered for sale by respondents is not a recent invention, is not invisible and does not enable deaf persons to hear every sound as well as do normal'hearing persons.

3. The "Hear-Mold Tru-Ear" and "Ear-Aid" plastic ear canal openers offered for sa.1e by respondents will not enable all or most deaf people to hear again, are not the natural ,yay for most deaf people to obtain better hearing, and were not developed at a laboratory owned by respondents. These devices are useful only in cases wherein the deafness is due to a collapse or a partial.l collapse of the external ear canal. Such conditiolls are practically nonexistent. In the most recent of advertisements of this device, respondents have added qualifying words to indicate the device is to be used in the case of a collapse or a partial collapse of the ear canal. However, respondents do not, even in these advertisements inform the reader that such a defect occurs so seldom as to be an insignificant factor in the cause of deafness. On the contraryy these advertisements convey the opposite impression. 4. The air conduction hearing aids offered for sale do not cnable deaf persons to hear everything; or to hear better: farther or more naturally than with compebtive brands of hearing aids and their performance is subject to the same limitations and rest.rictions which competitive brands of hearing aids enconntel' PAR. 8. The use by respondents of the said false advertisements with respect to their devices has had, and now has the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that the statements and representations contained in the advertisements are OREGON HEARING CENTER, ETC. ) Err AL. 1195 1192 Complaint true; and into the purchase of substantial quantities of said devices by reason of said erroneous and mistaken belief. PAR. 9. In the course and conduct of their business, respondents through the use of newspapers, radio broadcasts, and circulars disseminated through the 17united States mails, and other forms of advertising, have made certain other statements respecting the devices offered by them and the prices thereof. Among and typical, but not all inclusive, of the statements made by respondents, were the following:

Wearjng nothing in your ear except this tiny devire. $39.50 full price. . J\Tot a Gadget ot a Come-on! . But a truly fine complete Hearing Aid.

Imagine a complete hearing aid that weighs less than 3 ounces * * '" the total cost just $39.50.

The Katural Way to Better Hearing Kot $200 not $150 not $75 only 83B. 50 complete: Ready for use! No other expense.

Ear-Aid The Natural Way to Ileal' Better \Veighs less than 14 ounce.

N at $200 Not $150 Not $75 But Only $19.50 complete ready to wear :Ko Batteries No Cords o Ear Buttons Ko Tubes Not Electrical Wil Not Wear Out First Cost Only Cost PAR. 10. Through the nse of the statements set forth in Paragraph Nine herein, and others or similar import not specifically set rorth herein, respondents represented, directly or by implication that they were making a bona fide offer to sed the devices referred to or described in said advert.isements.

PAR.. 11. The aforesaid representations were false, misleading and dece.ptive. In trut.h and in fact, respondents' said offers were not bona fide offers to sell the devices rere.rred to or described in said a.advertisements. On the contrary, responde.nts' said offers were made for the purpose of developing leads to prospective purchasers or different and more expensive devices than those referred to or described in said advertisements.

In numerous instances, persons attracted by respondents ' advertisements, upon visiting respohdents' places of business or upon being visited by respondents' sales people in their homes or offces, were Decision 52 F. T. C.

informed by the sales people in effect that the advertised devices would not aid their hearing, were not correctly described in the advertisements, or were not desirable as hearing aids. The sales people often failed to even demonstrate said devices to prospective purchasers, but attempted to and did describe, demonstrate, and in many instances sold, different or more expensive devices than those described or referred to in said advertisements, to such persons. PAR. 12. The aforesaid representations set forth in Paragraphs Nine through Eleven had the tendency and capacity to induce and did induce members of the purchasing public to contact respondents and to purchase devices which they would not have otherwise purchased from respondents except for such practices. PAR. 13. The aforesaid acts and practices of respondents, 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 DECISION BY WILLIAM L. PACK , HEAIU:r.,T EXAMINER The complaint in this matter charges the respondents with misrepresenting hearing aids and accessories sold by them, in violation of the Federal Trade Commission Act. An agreement has now been entered into by respondents and connscl supporting the complaint which provides, among other things, that respondents admit all of the jurisdictional allegations in the complaint; that the record on which the initial decision and the decision OT the Commission shall be based shall consist solely of the complaint and agreement; that the inclusion of findings of fact and conclusions of law in the decision disposing of this matter is waived, together with any further procedural steps before the hearing examiner and the Commission; that the order hereinafter set forth may be entered in disposition of the proceeding, such order to have the same force and effect as if entered after a full hearing, respondents specifically waiving any and all rights to challenge or contest the validity of such order; that the order may be altered, modiflCd, or set aside in the manner provided for other orders of the Commission; and that the agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint.

The hearing examiner having considered the agreement and proposed order and being of the opinion that they provide an adequate basis for an appropriate disposition of the proceeding, tbe OREGON HEARING CENTER, ETC. , ET AL. 1197 1192 Order agreement is hereby accepted, the following jurisdictional findings made, and the following order issued:

1. Respondent Forrest A. Jones is an individual doing business as Oregon Hearing Center, with his principal place of business located at 421 S. ,V. Sixth A venue, Portland, Oregon. He also does business as California I-Iearing Center and as Western Hearing Center at 17 Grant A venue, San Francisco, California. This respondent and rc-spondent John A. Holm, an individual, are copartners doing business as ",Vashington Hearing Center, with their principal place of business at 1520 ,Vestlake Avenue, Seattle, 'V.shington.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

OImER It s ordered That respondent Forrest A. Jones, an individual doing business as Oregon Hearing Center, California Hearing Center, 1Vestern Hearing Center, or under any other trade name or names, and respondents Forrest A. ones and ohn A. I-Iolm as individuals or as copartners trading as \V lshil Ilg or under any other trade name or names, and respondents representatives, agents or employees, directly or through any corporate or other device, in connection with the offering Tor sale sale and distribution of 4earillg aids an CJiQther de ice --epresented to be hearing aids, do cease and desist from directly or indirectly: 1. Disseminating or causing to be disseminated by means of the United States l\iails or by any other means in commerce. as "commerce" is defined in the Federal Trade Commission Act, any adver tisement which represents directly or by implication that: (a) The canal ear phone receivers offered Tor sale are: (1) Complete hearing aids or will, in themselves, provide hearing to persons sufl'ering from hearing loss;

(2) Are transistor-powered aids;

(3) Are invisible;

(4) Win fit any ear;

(5) Have the approval of the American Ylec1ical Association, or of any medical councils affliated thermvit.h, when such is contrary to the bet.

(b) The bone conduction type of hearing aids offered for sa 10 by respondents are a recent invention, arc invisible, or that they will enable persons suffering from hearing loss to hear as wen as normalhearing persons.

451524-59-- , Decision 52F.

(c) The non-powered ear canal inserts advertised or offered for sale by respondents: ",'whether designated " I-Iear- iold True-Ear Ear-Aiel" , or by any other name or names, or any device of similar design, construction, or properties:

(1) Provide a natural way to better hearing; (2) 'Were developed at respondents' laboratory; (3) 'Vill be of any benefit to persons suffering from deafness or hearing loss except in instances ,,,hen denJness or hearing loss is wsed by collapse or partial collapse of the ear canal and unless such advertisements disclose that such causes are infrequent. (d) The air conduction hearing aids ollercd for sale will enable persons suffering from hearing loss:

(1) To hear everything (2) To hear farther, or more naturally than t.hey would by using competitive brands of hearing aids.

2. Disseminat.ing or causing to be disseminated by any means for directly orthe purpose of inducing or which is likely to induce, indirectly, the purchase of any such devices in commerce, as "commerce" is defined in the Federal Trade Commission Act, any advertisement which contains a,n)' of the representations prohibited in Paragraph 1 above.

It i8 further ordered That respondent Forrest A. Jones, an individual doing business as Oregon I-fearing Center, California rfearing Cent.er, ,Vestern Hearing Center, or under any other trade name or , asnames, and respondents Forrest A. Jones and John A. H.olm individuals or as copartners trading as \Vashington I-Iearing Center and respondents ' repre-or under ally other trade name or names, sentatives, agents, and employees, directly or through any c.corporate or other device, ill connpc.ion with the o1Tering for sale, sale and dist.ribution of herring aids and acc.essories in c.commerce, as '"eommerce is defined in the Federal Tra,de Commission Act, do fortln,ith cease and desist from representing, directly or by implication, that hearing aids and a.cc.essories are offered for sale when such offer is not a. bona fide offer to sell the rnerehandise so offered. DECISlOX OF THE CO?DIISSIOX AND ORDER TO FILE REPORT OF COl\rrLL\NCE Pursuant to Section 3.21 of the Commission\3 Hules of Pra.ctice, t.he initial decision of the hearing examiner shall, on the 28th day of April 1956, become the decision of the Commission; and, accordingly: It is ordered. That the respondents herein shall within sixty (60) clays a,iter service upon them of this order, file with the Commission a, report. in 'writing setting forth in det.ail the manner and form in which the,y have complied \with the order to cease and desist. THE YALE & TOWNE 1\IAKUFACTURING CO. 1199 Opiniall