Dictograpi-I Products, Inc.

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IN THE MATTER OF DICTOGRAPI-I PRODUCTS, INC., ET AL.

COKSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\BnSSION ACT Docket 6,'12. Coal/plaillt, Jan. 1S, 195';' Decision, July 3, 1957 Consent order requiring a mnnufacturer ill Jamaica, Long Islfllld, 1\.1.. and the corporate purc)Hlser in Newark, N.J., of its entire production of horne tire alarm s~'stems for sale to the public through franchise deniers, whose salesmen gen-e demonstrations in JlOllles of prospects, to cease the nets ~lJjc1 repl'esentntlons set forth in Ow onler beJen", engaged in by salesmen; fll1t1 to cease supplying to said franchise dealers literature upon which tl1ey were based.

lift. Edwa,Td F. Downs and llh' . OuTland S. Fe?'guson supporting the complaint.

Jl7'. 211ilton IJandlcJ' of ~e'\Y York City: for respondents. INITIAL DECISION BY JOSEPH CALLAWAY, I-IEARING EXAMINER The Federal Trade Commission issued its complaint against the above named respondents on January 18 , 1957, charging them with violation of the Federal Trade Commission Act as set forth in said complaint. After issuance and service of the complaint all respondents on :May 8 , 1957 entered into an agreement with counsel supporting the complaint for a consent order to cease and desist from the practices complained of, which.h agreement purports to dispose of all the issues in this proceeding without hearing. This agreement has been duly approved by the Assistant Director and the Director of the. Bnreatl of Litigation and has been submitted to the undersigned, heretofore designated to act as heating examiner herein, for his consideration in accordanee with Rule 3.25 of the Ru)es of Practice of the Commission.

Respondents in the aforesaid agreement have admitted all the jurisdictional fads alleged in the c.omp)aint and have agreed that the record may be taken as if findings of the jurisdictional facts had been duly m~lde in aceonlance '\"ith such nl1eg-ations. Said agreeall further proce-ment provides further that respondents waive dural steps before the hearing examiner or the Commission, including tJ1e making of findings of fact or c.onclllsions of Jaw and the right to c.challenge or contest the validity of the order to cease and also beendesist entered in accordance with the agreement. It. has agreed that the reeorc1 herein shall consist solely of the complaint ~ncl said a!!reement, that the aQ"reement. shall not become a part Ord' 54 F.

the official record unless and until it becomes a part of the decision of the Commission, that said 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, that said order to c.ease and desist shall have the same force and effect as if entered aside inafter a full hearing and may be altered, modified or set the manner provided for other orders of the Commission and that the complaint may be used in construing the terms of the order. This proceeding having now come on for final consideration on the complaint and the aforesaid agreement containing the consent order and it appearing that the agreement and order cover all the allegations of the complaint and provide for appropriate disposition of this proceeding, the order and agreement are hereby accepted and ordered filed upon becoming part of the Commission s decision pursuant to Sections 3.21 and 3.25 of the Rules of Prac.tice and the hearing examiner ac.core1ingly makes the following findings for jurisdictional purposes and order:

1. Re.sponde,nt Dietograph Produc.ts, Inc., is a corporation existing and doing busine$s under and by virtue of the laws of the State of New York, with its office and principal place of business located at 95-25- J-Dth Street, J amaiea, Long Island, New York. 2. Respondent Fire Detec.tive, Inc., is a corporation existing and doing business under~ and by virtue of the laws of the State of New at 300Jersey, with its office.e and principal plac.e of business located Chancellor Avenue, Newark, New Jersey.

3. Respondents I-Ierman Perl, Richard E. Rudolph, Arthur J. officers of cor-\Valdorf and l\ialte J. Carlson are individuals and pol' ate respondent Fire Detective, Inc., and respondent Stanley Osserman is an individual and is Chairman of the Board of Directors of c.corporate respondent Fire Detective, Inc. The addresses of the individual respondents are as follows: I-Ierman Perl, 300 Chan- South 20thc.ellor A venue, Newark, N. ; Ric.hard E. Rudolph, 3 Street, Philadelphia, Penna. ; Arthur ~T. 'Valdorf, 2912 Euclid Avenue, Cleyeland, Ohio; J\lalte J. Carlson and Stanley Osserman 95-25 149th Street, Jamaica, Long Island, of the subject 4. The Federal Trade Commission has jurisdictions.Y. matter of this proceeding and of the respondents herein. The complaintstates a cause of action under the Federal Trade Commission Act. This proceeding is in the public interest. ORDER , a I t ,is ordel' That the respondents Dic.t.ograph Products, Inc. corporation, Fire Detedive, Inc.. , a corporation, and their ofllce.rs 'Valdorf andand I-Ierman Perl, Hichard E. Rudolph, Arthur J. DICTOGRAPH PRODUCTS, INC., ET AL.

Order :Ma1te J. Carlson, individually and as officers of Fire Detective, Inc. and Stanley Osserman, individually and as Chairman of the Board of Directors of Fire Detective, Inc. , their representatives, agents and employees, directly or through any corporate or other device in connection with the offering for sale, sale or distribution in commerce, as "commerce" is defined by the Federal Trade Commission Aet, of fire detection or fire alarm systems do forthwith cease and desist from:

1. Representing, directly or by implication: (a) That respondents' salesmen only desire to make fire preventtion talks or demonstrations;

(b) That respondents' representati yes are not salesmen but are only demonstrators;

(c.) That prospective purchasers or their homes have been specially selected for demonstration purposes; (d) That the total or monthly cost of respondents' fire alarm system ,,-il1 be reduced in any amount by the submission of names of prospective purchasers under respondents' referral program; (e) That the identity of those supplying names of prospective purchasers \',ill not be revealed to said prospective purchasers; (f) That. the contrac.t or promissory note for the purchase price of the system will not be disc.ounted or failing to reveal that such wi)) be discounted;

(g) That c.arrying charges will not be added to the total c.ost of the system or failing to reveal that carrying charges will be added. 2. Inducing the purchase of respondents' products by employing seare tacties" by exhibiting newspaper clippings and horror pictures calculated to unduly arouse parents emotiona))y as to the need to protect themselves and their children from the hazards of fire. 3. l\Iisrpresenting in any manner the amount of money any purchaser or prospective purchaser wjJl probably or may reasonably expect to receiye from the submission of names of prospects under respondents' referral program.

4. Using any referral program in inc1uc.ing the sale of their fire alarm system unless, (1) all of the terms and conditions thereof are fu))y explained to the purchaser or prospective purchaser prior consummation of the sale, (2) any person submitting the name of a prospect who cannot be solicited for any reason is given the option of submitting a replacement name, and (3) the promised sum of money is actually paid to the purchaser who submitted the nalllC of a prospect to ",hom a demonstration or sale of the system is made pursuant to such referral.

5. Supplying franchise dealers or their representatives with any literature or other material containing or suggesting any of the 528577-60- Decision 54 F.

statements, representations, acts or practices prohibited by paragraphs 1 through 4 of this order.

DECISION OF THE COl\UnSSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 3rd day of July, 1957, become the decision of the Commission; and, accordingly: It is ordered That the Respondents herein shall within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with the order to c.ease and desist. ROBERTS, INC. , ET AL.

Decision