J. Fiddelman & Son, Inc., et al.

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IN THE MATTER OF J. FIDDELMAK & SOX, I:\C., ET AL.

COXSE: n miler, ETC. , IN REGARD TO THE ALLEGED VIOLATION OP THE FEDERAL TRADE CO::BnsSIOK AOT Docket 8043. Complaint, July 1960-Decision, Jan. 10, 1961 Consent order requiring bvo affliated Ke,v York City jewelry distributors to cease representing falsely in advertisements they furnished to jewelerl'llstumers tlla t jewelry;\: offered for sale by said retailers consisted of respondents' overstocked merchandise, that its regular retail price was $300 or any other fictitious amount, and that it was offered for sale at onp-half tlle usual price; find to cease attaching to their merchandise tags bearing fictitious Hmonnt, represen1ed thereby as the usual retail prices. CO"'rpt, AINT Pn!'Sllant 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 J. Fiddelman Son Inc., and S vndicate Diamonds, Inc., corporations, and Sidney Fiddelman and Donald H. Fiddelman, individually and as offcers of said corporations, hereinafter re.errecl 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 stfl.ting its charges in that respect as folJo\ys:

\R.\GR.\PH 1. Hesponclents J. Fiddelman & Son, Inc., and Syndicate Diamonds, Inc., are corporations organized, existjng and doing business under and by virtue of the la,ys of the State of New York ,,-ith their principal offce and place of business located at 130 ,Vest JGth Street, Ln the City of Ke.w York, Stat.e of Xew York. Respondents Sidney Fiddelman and Donald H. FiddeJman are ofiicers of the corporate respondents. They formulate, direct and control the acts and practices of the corporate respondents, including the a.cts and practices hereinafter set forth. Their address is the same as that of the corporate respondents. PAR. 2. Hespondents are now, and for some time last past have been, engaged in the advertising, offering for sa.1e, sale and distribution of jewelry to retailers for resale to the public. PAR. 3. In the course and conduct of their business, respondents now cause, a,nd for some time last past have caused, their said prodbusiness in the ucts, when sold, to be 8hi pped from their place of State of New York to purchasers thereof located in various other Complaint 58 P.

States of the United States and in the District of Columbia, and maintajn and at all times mentioned herein have maintained, a sub stantjal course of trade in said products in COmlTICrCe, as "comnwrce is defined in the Federal Trade Commission Act. PAR. 4. In the course and conduct of their business and for the purpose of inducing t.he sale of their jewelry by others, respondents h;1\'8 entered into promotions with respect to their saiel jewelry with jewelers located in various states and have provided said jmvelcrs with various forms of advertising for use, and which has been used in connection with such promotions, by some of said jewelers in newspa,pers.

Among and typical of the advertisements furnished by respondents to je"clers and used by them as aforesaid are the follo"ing: Getz (n Cincinnati, Ohio, retail jeweler) EXCLCSIYELT participate i,1 a Great N \TION.'VIDE LIQUIDATIOX 000 000 DIA.MOKD SALE Oyer stocked Manufacturer enlists us among 75 Jpwelel's across the country to Liquidate T'.xcess Inventory at 72 oli! among the various items offered '\ere articles advertised as follows: Your Choice $149.

Regularly 8300.

PAR. 5. Through the use of the statements appearing in the a,foresaid advertisements, respondents, directly or by implication represented:

1. That the jc"elry purchased from respondents and sold by jewelers purchn.sing said merchandise, consisted of respondents' surplus or overstocked merchandise;

2. That $300.00 "as the usual and customa.ry retail price of the jewelers a,clvertising said jewelry in the recent regular course of business;

3. That said jewelry "as offered for sale by the advertising jewelers at one-ha.lf the price at "which it was usually (tIlcl customarily sold by said jewelers at retail in the recent regular course of business and that a savings of one-lmlf "as afforded to purchasers from the usual and customary retail price of said jewelers. \R. G. The aforesaid statements and representations WCTe false misleading and deceptive. In truth and in fact: 1. The je"elry sold by repondents and purchased by jewelers did not consist of respondents' surplus or overstocked merchandise but was composed of items made up especially for said promotions. J. FIDDLEMAN & SON , I:'C. ) ET AL.

Complaint 2. Said jcwelers had not sold the advertised jewelry at $300.00 or at any other price in the recent regular course of business. 3. Said jewelry offered for sale by the advertising jewelers was not at one-half the price at which it \Tas usually and customarily sold by them in the recent regular course of business and if any saving was afforded to purchasers, it was substantia.lly less than one-half from the usual and customary retail price of said je\\elers. PAR. 7. Respondents for the purpose of inducing the purchase of their jewelry, also engaged in the practice of using fictitious retail prices by attaching tickets or tags on which prices are printed thereby representing, directly or by implication, that such prices 8.re the usual and customary retail prices of sa,id je,,,elry. In truth and in fact, said price figures are not the usual and customary retail prices at which said jewelry is sold at retail but arc fictitious and greatly exaggerated prices.

PAR. 8. By engaging in the acts and practices set out in Paragraphs 4 and 7 hereof, respondents supply the means and instrurnentalities through and by which retailers may lnislead the purchasing public as to the nature of their jewelry, the usual and customary retail prices thereof, and the savings that are afforded to purchasers thereof.

PAR. D. In the course and conduct of their business, at all times mentioned herein, respondents have been in substantial competition in commerce, with corporations, firms and individuals in the sale of jewelry of the same general kind and nature as that sold by respondents.

AR. 10. The use by respondents of the aforesaid fa.lsc, luisleading and deceptive statements, representations and pra.ctices has had d now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations "ere, and are, true and into the purchase of substantial quantities of respondents' products by reason of said erroneous and mistaken belief. As a consequence thereof substantial trade in commerce has been, and is being, unfairly diverted to respondents from their competitors and substantial injury has thereby been, and is being, done to competition in commerce. PAR. 11. The aforesaid acts and practices of respondents, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair and deceptive acts and practices and unfajr methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act.

681-237--63-- FEDERAL TRADE COMMISSIO'" DECISIONS Findings 58 F.

Mr. De !Vitt T. Puckett supporting the complaint. Bro2,an and Holman by 3fr. Aaron Holman of New York Y. for respondents.

INITIAL DECISION BY J ORK B. PonmEXTER, IIEARING EXA::IINER On July 15, 1960 the Federal Trade Commission issued a complaint charging that the above-named respondents had violated the provisions of the Federal Trade Commission Act. The complaint alleged that respondents had made fictitious pricing and savings claims to promote the sale of the jewelry they distribute and sell. After issuance and service of the complaint the respondents, their attorney, and counsel supporting the complaint entered into an agreement for a consent order. The agreement has been approved by the Director, Associate Director and the Assistant Director of the Bureau of Litigation. The agreement disposes of the matters complained about.

The pertinent provisions of said agreement are as follmys: Respondents admit an jurisdictional facts; the complaint may be used in construing the terms of the order; the order shall have the same force and effect as if entered after a full hearing and the said agreement shall not bec.ome a part of the of-fieial record of the proceeding unless and until it becomes a part of ihe decision of the Commission; the record herein shall consist solely of ihe complaint and the agreement; respondents waive the requirement that the decision must contain a statement of findings of fact and conclusions of law j respondents waive further procedural steps before the hearing examiner and the Commission, and the order may be altered modified, or set aside in the manner provided by statute for other orders; respondents waive any right to challenge or contest the validity of the order ent.ered in accordance with the agreement and the signing of 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. The undersigned hearing exa,miner having considered the agreement a,nd proposed order, hereby accepts such agreement, makes the following jurisdictional findings, and issues the following order: JURISDICTIONAL FINDI!-""

1. Respondents J. Fiddelman & Sons, Inc. , and Syndicate Diamonds, Inc. are corporations existing and doing business under and by virtue of the Jaws of the State of :"ew York, with their offce and principal place of business located at 130 .West 46th Street, :"ew York ew York.

J. FIDDLEMAN & SOX, INC. , ET AL.

Decision 2. Itespondents Sidney Fiddelman and Donald H. Fiddelman are officers of the corporate respondents. Their address is the same as that of the corporate respondents.

3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named and the proceeding is in the public interest. ORDER I t is ordered That respondents ,J. Fiddelman & Son, Inc. , and Syndicate Diamonds, 1nc. corporations, and their offcers, and Sidney Fiddelman and Donald H. Fiddelman, individually and as offcers of said c.orporations, and their representative, , agents and employees directly or through any corporate 01' other device, in connection with the offering for sale, sale or dist.ribution of jewelry or any other merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Furnishing advertising matter or any other means or instrumentality to others by and through which they may represent directly or by implication:

(a) That the merchrLIdise oflerec1 for sa,1e by them is respondents sllrplus or overstocked merchandise, unless such is the fact; (b) That any amount is the usual and cust.omary retail price of their merchandise when it is in excess of the price at which they have usuan)' and custonmrily sold the merchandise in the recent fmd regular course of their business.

(c) That a saying is aJiordecl t.o purchasers of their merchandise unless the price at which it is oiTered constitutes a reduction from the price at which they hn,\'e nsmtlly and customarily sold the merclmndise in the recent tnd regular course of business. 2. Preticketing merchandise sold to others for resale to the public which tickets set out prices which arc in excess of the prices at ,which the merchandise is usual,lly and customarily sold at retail. 3. J\Iisrepresenting in any ot.her manner the retail price of their merchandise or the amount of savings afforded to purchasers at retail from the usual and customa.ry retail prices of their merchandise. DECISIO:: OF THE COllDnSSIO AND ORDER TO FILE REPORT OF COl\IPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of t.he hearing examiner shall on the 10t.h day of .January, 1961 , become t.he decision of t.he Commission; and accordingly:

&, Decision oS F.

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 cease and desist.