Advertisers Associates of America, Inc.

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IN THE MATTER OF ADVERTISERS ASSOCIATES OF AMERICA, INC., ET AL. CONSENT ORDER, ETC. , IN REGARD TO T1IF ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7,104. Complaint, Nov. 195R Decision May 195fJ Con"ent order requiring; three affliated New York concerns to cease selling advertising promotional plans, including- contests described as "A ::illionaire s Weekend Trip to Las Vegas Juvenile Delinquency Essay Contest " and " Safety On the Highways Essay Contest " to radio and television stations and local merchants by means of a variety of misrepresentations as in the order below set forth. M?' Morton Nesmith for the Commission. MT. Norman D. Levy, of New York, N. , for respondents. INITIAL DECISION BY ABNER E. LIPSCOMB, HEARING EXAMIKER The complaint herein was issued on Xovember 18, 1958, charging respondents with violation of the Federal Trade Commission Act by the use of false, misleading and deceptive statements and practices in connection with their business of offering for sale and selling advertising promotional plans to radio and television stations and to merchants in areas surrounding such stations and entering into contracts with stations and merchants with respect to such plans, which included contests of various types and the awarding of prizes furnished by respondents to the winners.

Thereafter, on January 14 , 1959 , respondents, their counsel and counsel supporting the complaint herein entered into an Agreement Containing Consent Order to Cease and Desist, which was approved by the director and an assistant director of the Commission s Bureau of Litigation, and thereafter submitted to the hearing examiner for consideration. The agreement identifies respondents Advertisers Associates of America, Inc., and Teleradio Advertisers, Inc., as New York corporations; respondent United Publicity, Inc., as a New Jersey corporation; and respondent Arthur Hammel as an offcer of said corporations, trading and doing business as Teleradio Advertisers; all respondents having their principal offce and place of business located in the Empire State Building at 350 Fifth Avenue, New York, N.

Order 55 F.

Respondents admit all the jurisdictional facts alleged in the complaint, and agree that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations.

Respondents waive any further procedure before the hearing examiner and the Commission; the making of findings of fact and conclusions of law; and all of the rights they may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement. All parties agree that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the agreement; that the order to cease and desist, as contained in the agreement, when it shall have become a part of the decision of the Commission, shall have the same force and efrect as if entered after a full hearing, and may be altered, modified or set aside in the manner provided for other orders; that the complaint herein may be used in construing the terms of said order; and that the agreement is for settlement purposes only, and does not constitute an admission by the respondents that they have violated the law as alleged in the complaint. After consideration of the alleg"ations of the complaint and the provisions of the agreement and the proposed order, the hearing examiner is of the opinion that such order constitutes a satisfactory disposition of this proceeding. Accordingly, in consonance with the terms of the aforesaid agreement, the hearing examiner accepts the Agreement Containing Consent Order to Cease and Desist; finds that the Commission has jurisdiction over the respondents and over their acts and practices as alleged in the complaint; and finds that this proceeding is in the public interest. Therefore It is ordered That respondents, Advertisers Associates of America, Inc. , a corporation, and its offcers; Teleradio Advertisers Inc., a corporation, and its offcers; United Publicity, Inc. , a corporation, and its offcers; and Arthur Hammell, individually and as an offcer of said corporations and trading as Teleradio Advertisers, or trading under any other name or names; and said respondents' representatives, ag-ents and employees, directly or through any corporate or other device, in connection with the offering for sale or selling of advertising promotional plans and materials in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Withholding any sums of money due radio or television ADVERTISERS ASSOCIA TES OF AMERICA , INC. , ET AL. 1735 1703 Deeision broadcasting stations pursuant to contracts hereafter executed or hereafter endorsing checks made payable to said stations without authority;

2. Hereafter representing directly or by implication: (a) That their sales representatives or agents are representatives or agents of radio or television broadcasting stations, unless such station has authorized such representation; (b) That only one business of a kind in a specific area will be permitted to advertise a promotional project unless such is the fact;

(c) That all of the leading businessmen in a community are subscribing to or supporting a promotional project; (dl That subscribing merchants wiJ be allowed to exhibit their merchandise on television or that such merchandise wiJ be picked up at the merchant's place of business prior to the telecast; (e) That they wiJ run an advertisement in a local newspaper concerning their promotional project;

(f) That they will provide a free trip to Las Vegas for a weekend as a prize to each contest winner as declared by the radio or television broadcasting station, or give in lieu thereof $250 to said contest \vinner, 01' misrepresenting in any munnel' the nature of the prize to be awarded in any contest; (g) That the bac:kdrop advertising used in television broadcasts will conform to the sample shown merchants at the time of subscription;

(h) That they wil furnish subscribing merchants with a desirable or attractive display bearing the eall letters of the radio station; or misrepresenting the nature of the display to be furnished;

(i) That they wil change the commercial copy monthly. DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 8.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 6th day of May 1959 , become the decision of the Commission; and, accordingly:

It is o1'dered That the respondents named in the caption hereof shan, 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 cease and desist.

Decision 55 F.