Kriss Electronics, Inc.

Text (OCR of the scan at left; may contain errors)

N THE 1\1 A TIER OF KRISS ELECTRONICS, INC., ET AL.

CONSENT ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 81"18. Complaint, Nov. 14, 1960-Decision, July, 1961 Consent order requiring Newark, N. , manufacturers of rebuilt television picture tubes containing used parts, to cease labeling and otherwise representing their said products falsely as "NEW Television Picture Tubes and to disclose clearly to purchasers that such tubes were rebuilt and contained used parts.

COl\IPLAI~T 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 J\:riss Electronics, Inc. , a corporation, and Charles Kriss, individually and as an officer of said corporation, 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 KRISS ELECTRONICS, INC. , ET AL. 103 102 Complaint the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Kriss Electronics, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, with its office and principal place of business located at 191-195 Oraton Street, Newark New Jersey.

Respondent Charles J\:riss is an individual and an officer of said corporation. He formulates, controls and directs the policies, acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondent.

PAR. 2. Respondents are now, and for some time last past have been, engaged in the manufacture, offering for sale, sale and distribution of rebuilt television picture tubes containing used parts to distributors who sell to others for resale to the public. PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of New Jersey to purchasers thereof located in various other States of the United States, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products, in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business, and for the purpose of inducing the sale of their products, respondents made certain statements concerning their products on labels and by other media. Among and typical of such statements is the following: XEW Television Picture Tubes PAR. 5. Through the use of the aforesaid statement, respondents represented that certain of their television picture tubes were new in their entirety.

PAn. 6. Said statement and re.presentation was false, misleading and deceptive. In truth and in fact, the television picture tubes represented as being "new" are not new in their entirety. PAR. 7. The television picture tubes sold by respondents are rebuilt and contain used parts. Respondents do not disclose on the tubes, on invoices or in an adequate manner on the cartons in which they are packed, or in any other manner, that said television picture tubes are rebuilt and contain used parts. ",Vhen television picture tubes are rebuilt containing used parts in the ab~ience of any disclosure to the contrary, or in the absence , ,, 104 FEDERAL TRADE COJ\IMISSION DECISIOXS Decision 5H )T.

of an adequate cbsclosure, such tubes are understood to be and are readily accepted by the public as new tubes. \R. 8. By failing to disclose the facts as set forth in Paragraph Seven, respondents place in the hands of uninformed or unscrupulous dealers me.ans and instrumentalities ,vhereby they may mislead and deceive the public as to the nature of their said te.le- \Tision picture tubes.

\R. D. In the conduct of their business, and at all times mentioned herein, respondents have been in substantial competition, in commerce, ,,-ith corporations, firms and individual~ engaged in the sale of television picture tubes.

\R. 10. The use by respondents of the aforesft i(l false, misleading aed deceptive statement and representation, and the failure of respondents to disclose on their television picture tubes, on inoiees, and in an adequate manner on the cartons in ,which they are packed, or in any other manner, that the tubes are rebuilt containing used parts have had, and now have ~ the capaeity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said picture tubes are ne'" in their entirety and into the purchase of substantial quantities of respondents' tubes by reason of said erroneous and lnistaken belief. As a consequence. thereof, substantial trade in commerce has been, and is being~ unfnirly diverted to respondents from their competitors and substantial injury has thereby been, and is being, clone to competition in commerce.

u:. 11. The aforesaid acts and practices of respondents, as herein a.lleged ere, and are, all to the prejudice and injury of the public and of respondents~ competitors, and constituted, and no"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.

Jir. l1iichael J. Vitale forthe Commission. Rat//. d': Rwvin. by JIi' . David N. Rav/n of Newark, N. , for respondents.

IXITL\L DECISION BY ,VALTER R. JOHNSOX, IIEARING EXAMINER In the complaint dated :r\ovember 14 , 1960, the respondents are charged "\with violating the provisions of the Federal Trade Commission Act.

On ~fay 25, 1961, fhe respondents entered into an agreement with counsel in support of the complaint for a consent order. KRISS ELECTRONICS, INC. , ET AL. 105 102 Order Under the foregoing agreement, the respondents admit the jurisdictional facts alleged in the complaint. The parties agree, among other things, that the cease and desist order there set forth may be entered without further notice and have the same force and effect as if entered after a full hearing and the document includes a waiver by the respondents of an rights to challenge or contest the validity of the order issuing in accordance therewith. The agreement further recites that it is for settlement purposes only, does not constitute an admission by the respondents that they have violated the law as alleged in the complaint, and that said complaint may be used in construing the terms of the order. The hearing examiner finds that the content of the agreement meets all of the requirements of section 3.25 (b) of the Rules of the Commission.

The hearing examiner being of the opinion that the agreement and the proposed order provide an appropriate basis for disposition of this proceeding as to an of the parties, the agreement is hereby accepted and it is ordered that the agreement shall not become a part of the official record of the proceeding unless and until it becomes a. part of the decision of the Commission. The following jurisdictional findings are made and the following order issued. 1. Respondent I\:riss Electronics, Inc. is a corporation existing and doing business under and by virtue of the laws of the State of New e.rsey, with its office and principal place of business located at 191-195 Oraton Street, in the City of Newark, State of Ne\y "Tersey. Respondent Charles Kriss is an officer of said corporate respondent. He formulates, directs and controls the acts and practices said corporate respondent. His address is the same as the corporate respondent.

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.

ORDER is ordered That respondents Kriss Electronics, Inc., a corporation, and its officers~ and Charles Kriss, individually and as an officer of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of rebuilt television picture tubes containing used parts, in commerce, as "commerce" is defined in the Federal Trade Commission Act. do forthwith cease and desist from:

1. Representing, directly teJevisionpicture tubes are or by new.implication, that said Decision 59 F.

2. Failing to clearly disclose on the tubes, on the cartons in which they are packed, on invoices, and in advertising that said tubes are rebuilt and contain used parts.

3, Placing any means or instrumentality in the hands of others whereby they may mislead the public as to the nature and condition of respondents' television picture tubes, DECISION OF THE COMMISSION 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 22d day of July 1961 , become the decision of the Commission; and, accordingly :

1 t 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 c9mplied with the order to cease and desist.