Grady L. Rushing

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IN THE MATTER OF GRADY L. RUSHING DOING BUSINESS AS :MARCEL CO1\1:P ANY ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO:i\fl\IISSION ACT Docket 8138. Complaint, Oct. 1960-Decision, Nov. 11961 Order requiring a New Orleans seller of correspondence courses on civil service preparation to cease making false job-assurance claims, representing falsely connection with the U.S. Civil Service, and simulating court summons and complaint to collect unpaid balances, among other unfair practices as set forth in detail in the order below. As to the remaining respondent. Claude 1. Woolwine doing business as Universal Training Service et a1.. the proceeding was disposed of by consent order Sept. 28, 1962 61 F. C. - COMPLAINT 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 Claude I. vVoolwine, doing business as Universal Training Service, and Grady L. Rushing, doing business as 1\larcel Company, 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 thereto 'would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent Claude I. 'Yoolwine is an individual doing business as Universal Training Service, with his office and principal place of business located at 150 Powell Street, San Francisco, California.

Respondent Grady L. Rushing is an individual doing business . Marcel Company, with his office and principal place of business located at 8210 Hickory Street, New Orleans, Louisiana. PAR. 2. Respondents are now, and for more than one year last past have been engaged in the sa.le and distribution of a course of study and instruction purporting to prepare purchasers thereof for United States Civil Service examinations and positions with the United States Government, which said course is pursued by correspondence through the United States mail Respondent Grady L. Rushing, doing business as 1\1arcel Company, has a contract with respondent Claude 1. 'Yoolwine, doing business as Universal Training Service, to supply said course of instruction to respondent Rushing s customers and for the grading of papers in connection MARCEL CO. . 1183 1182 Complaint therewith. In the course and conduct of their said businesses, respondents cause said course to be transported from respondent 'Voolwine s place of business located in the State of California to purchasers from respondent Rushing who are located in other states. There has been at all times mentioned herein n substantial course of trade in said course of instruction so sold and distributed by respondents in commerce, as " commerce" is defined in the Federal Trade Commission Act.

PAR. 3. In connection with the sale of said course of instruction respondent Claude I. 'Voolwine participates and cooperates with respondent Grady L. Rushing in the promotion by respondent Rushing of the sale of the aforesaid course of instruction to perspective students in the several states in which said course is sold by him. Said participation and cooperation is by various means, including, but not limited to, the furnishing to respondent Rushing sample advertisements which have been used by him, in and which statements are made in regard to said course and matters and things connected therewith. Typical of the statements made in said sample advertisements furnished and used, as aforesaid are the following:

GET A CIVIL SERVICE JOB-Train Now Exams coming up. Men and Women Ages 18-50-Many Opportunities-Good Pay-Vacation-Sick Leave, No Lay Offs-Retirement Benefits. For FREE brochure listing Job Salaries * In connection with the sale of said course of instruction, respondent Claude I. 'Voolwine furnishes copies of the brochure referred to in the aforesaid. advertisement to respondent Grady L. Rushing, with other promotional material printed to his individual order which brochure and other material have been and are used by respondent Rushing in soliciting the sale of said course. Among the typical, but not all inclusive of the statements made in the said brochure and other material are the following: Now is the most opportune time to start preparing for a Civil Service position. 'Written examinations will be held for many permanent Civil Service Jobs. and both veterans and non-veterans will be eligible for appointment. THE BEST 'YAY TO GET AN APPOINT::\lent IS TO PREPARE WITH OUR TRAINING SERVICE AND STAND A::\LONG 1'HE HIGHEST ON THE GOVERX::\lent EXA::\IJNATION.

Whichever job you pick, we will coach you for it successfully * * "' '" '" A personal appointment is necessary to determine your qualifications. If you qualify, you will be accepted for training. , ,, Complaint 59 F.

* * * Check two or three positions before he (our field counselor) cans. He ,,'inlet. you know whether or not you can qualify. SHiel brochure and other mnteriallist positions for which the course purports to train persons and the salaries for such positions. Respondent Claude 1. "\Voolwine further cooperates with respondent ith re-Grady L. Rushing by furnishing printed application blanks spondent Rushing s trade name printed thereon, ,,-which are used by e.spondent Rushing in connection ",ith the sale of said course. among and typical, but not all inclusive, of the statements appealing in said application blank, which is executed by the purchaser of said course, is the following:

CONTL\' UOlTS TRAINI:z\'G r:~TIL I A:\I APPOINTED. Should I fail pass the first examination taken, I am to receive, without further payment. training until I RECEIFE MY A_PPOINTJIENT. \R. ':1:. By means of the statements appearing in the advertising material, brochure, application blank, and other promotional material, respondents have represented, and are representing, directly or by implication, that:

1. Civil Service examinations are imminent for all of the positions listed in the brochure, in the areas in which the advertisements set out in Paragraph Three are circulated.

2. The completion of the course of instruction offered by respondents will enable a person to pass the Civil Se.rvice examination for the job selected.

3. The school trains the applicant for the position or positions he selects.

~L The course is sold only to those who qualify. 5. The starting sabriesfor the positions listed are those set out in the brochure and other material 6. The respondents will continue to instruct persons who have completed said course of instruction until they are appointed to a Civil Service position.

PAH.5. The aforesaid state.ments are false, misleading and deceptive. In truth and in fact:

1. Civil Se.rvice examinations had not been announced for any of the positions listed in the brochure in many of the. areas in ,,-hic.h ~aid :tchertisements ,were circl1bted.

2. The completion of the course of instruction offered by respondents by a purchaser of such course of instrutjon would not necessarily prepare him sufFicently to p~tSS a Civil Service examination. 3. Respondents have only one course, and it does not train persons for any particular position, MARCEL CO. 1185 1182 . Complaint 4. Hesponclents, in selling the course, have no requirement that. any qualifications be met other than subscribing and paying for the course.

5. The salaries indicated are not the starting salaries for the posi-tions 6. Respondents do not. continue listed.to instruct those who have completed the course of instruction until they have been appointed to a Civil Service position.

Pilon. 6. In the further course and conduct of the said business as aforesaid, respondent Grady L. Rushing and his sales agents and representatives hr.ve orally stated, represented and implied to prospective purchasers of said course of instruction that: 1. The purc.hasers of said course will be notified ",hen and where examinations ",viii be held.

2. The purchaser of said course will be trained specifically for such work as :

(a) Border Patrol;

(b) Livestock Inspector;

(c.) Immigration Inspector; or (d) Library Assistant.

3. Persons completing the course and passing a Civil Service examination ate assured of obtaining United States Civil Service positions.

4. Respondent, his age,nts and representatives are connected with the United States Civil Service Commission or a. branch thereof or some other agency of the United States Government. PAn. 7. The statements, representations and implications set out in Paragraph Six are exaggerated, false, misleading and deceptive. In truth and in fact:

1. Respondents do not notify the purchasers of the course of instruction when and where the examinations are being held. 2. The purchaser of the course is not trained for any specific type of work.

3. The completion of respondents' course and the passing of a Civil Service examination are no assurance of obtaining a United States Civil Service position.

4. Respondent Grady L. Rushing, his agents and re.presentflti,are not connected with the. United States Civil Service Commission a branch thereof, or any other agency of the rnitecl States Government.

PAR. 8. Respondent Grady L. Rushjng, jn the course and conduct of his business, nnd in nil effort to enforce collection of claims arismg out of the agreements entered into with the purchasers of the 490-- 64---- 76 Complaint 59 F.

said course of instruction, has devised and used a series of forms which have the capacity to mislead said purchasers into the mistaken belief that they were being sued for the outstanding balances allegedly due on their accounts, and cause such purchasers, in their mistaken belief, to pay such amounts. One of said forms consisting of two pages, is attached hereto and marked Exhibit Aand FINAL NOTICE TO DEBTOR COLLECTI ON--PROCEEDING S CREDITOR VS.

DEBTOR AMOUNT $ IMMEDIATE SETTLEMENT OF THIS CLAIM SAVES ADDITIONAL COST Note: To settle this without further cost remit full amount direct to Creditor.

EXHIBIT A- FINAL NOTICE TO DEBTOR CREDI'l' IN THE CLAIM OF \'S. DEBTOR You are hereby advised, informed and notified that a VALID CLAIM against you for the is substantiated by the sum of $following: 1. The contract which you signed states very clearly that this contract is not subject to cancellation by EITHER party. MARCEL CO. 1187 1182 Complaint 2. This contract stipulates that how quickly or slowly you study or send in your lessons does not affect in ANY way your obligation to the CREDITOR. 3. This contract further stipulates that default in payment at any time will ('cause the ENTIRE UNPAID BALANCE to become due and payable. Action will be held in abeyance for 5 DAYS, giving you an opportunity to tlay IN FULL DIRECT TO THE CREDITOR.

Failure to respond will force procedure WITHOUT FURTHER NOTICE. CREDITOR OR AGENT Subscribed and affirmed before me this day of 196- NOTARY PUBLIC OR WITNESS CP2 EXHIBIT A2 PAR. 9. In the course and conduct of his business, respondent Claude 1. 'Voolwine solicits salesmen to sell his course of instruction by advertising in various newspapers and nationally distributed magazines. Among ' and typical of such advertisements, but not all inclusive, is the following:

Educational Salesmen-~1200-$1800 average monthly earnings. Operate Home Study school. Details: * * * PAR. 10. By and through the statements in said advertisemem; and others of like import and meaning not specifically set out, said respondent represented that a person can earn an average of $1200- $1800 a month in selling the course of instruction and that he will operate a home study school.

In truth and in fact, such earnings from the sale of responclenfs course are not achieved by such salesmen and further, such salesmen do not operate home study schools.

PAR. 11. In the course and conduct of their business, the respondents are in substantial competition in commerce, with corporations, firms and individuals who sell correspondence courses similar to those sold by respondents.

PAR. . 12. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had and now has, the tendency and capacity to mislead a substantial portion of the purchasing public into the erroneous and mistaken belief that said statements and representations were, and are, true and to induce a substantial number thereof to subscribe to and purchase said course of instruction, to pay for said course in the incorrect belief that they were being sued for said payment and to Complaint. 59 F.

become employed as salesmen, by reason of such erroneous and mistaken belief. As a. consequence thereof, trade in c.omme.rce has been, and is being, unfairly diverted to the respondents from their competitors and substantial . injury has thereby been, and is being, done to competition in commerce.

PAR. 13. The aforesaid acts and practices of respondents, as herein alle.ged, ',"ere, and are, all to the prejudice and injury of the public nnd of respondents' competitors, and constituted, and now 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.

1111 . HaJ'J' .IJ E. JIiddleton, J7'. for the Commission. John E. Jackson Baldwin J. Allen by Jf1' . John E. Jackson, J1'. New Orleans, La., for respondents.

INITIAL DECISION BY I-ler~L\.N TOCKER, I-learing EXAMINER By a complaint issued October 12, 1960, the Federal Trade Commission charged Claude 1. 'Voolwine, doing business under the firm name and style of Universal Training Service, and Grady L. Rushing, doing business under the firm name nncl style of :l\farcel Company, with violating the Federal Trade Commission Act by engaging unfair and dec.eptive. acts and practices and unfair methods of competition in commerce. in connection with the sale and distribution " a course of study and instruction purporting to prepare purchasers thereof for United States Civil Servic.e examination and positions with the United States Government."

Both duly appeared herein and "ere represented by c.011l.1sel Issue as joined by the filing of a separate ans,yer on behalf of each. After a pretrial hearing, notice wns issued directing that the ease proceed to hearing at New Orleans, Louisiana, on the 15th day of l\fay, 1961. Just. prior to the time so sc.heduled, after all arrange- . ments had been made, Vir 001 wine suffered a series or heart attacks and, after motion made on his behalf, I issued an order severing the proc.eeding as to him and direc.ting that it go forward against. Rushing, who hereafter sometimes is reteHed to as the respondent. Consequently, this decision is concerned only with him, disposes only of the issues in which he is involved and leaves completely undisposed all charges a-f1'acting 'Voolwine. The hearing of the. charges against respondent. Hushing has been held. Hequests to find and arguments i11 support thereof have been filed by both counsel. Opposition to these also has been ii1eel. The case is now fully submitted. 1\n' soils '.I"hose interest in obtaining employment in the 1Jnited States Civil Service is aroused by the respondent necessarily win MARCEL CO. 1189 1182 Complaint form opinions about it. It is desirable and important that the Service be regarded with esteem and held in high regard. If the acts with which the respondent has been charged actually were committed and persons had been led to believe that he ",as associated with the Civil Service Commission, their regard and esteem for the Service would be adversely affected. For this, and other reasons, this proceeding is fraught with great public interest. :l\lany of the difficulties which respondent had with customers were caused, no doubt, by letters written by ",Voolwine (with whom the respondent had had a contract for the giving of the courses sold by him) after the termimtt1on of 'Voolwine s contract ,,'ith respondent. In arriving at my ultimate findings and conclusions, I have taken into consideration these difficulties, but have concluded that the determinative facts involved in this proceeding do not rest upon these difficulties. I have concluded also that respondent Rushing could have taken measures for the solution of these difficulties but did not. lVloreover, the matters in issue between ",Voolwine and Rushing, to the extent that they involve a personal controversy between them are irrelevant to this proceeding and their respective merits are not at all involved herein.

Respondent asserts that he is engaged in the sale of education. whether this is so depends to a large extent on what one regards as the meftning of education. His operation is not at all that of an educational instjtlltion. 'Vhat he sells consists mainly of practice exercises or tests designed to refresh the user in the common branches and elementary skills. These exercises and tests are supplements with some text material and the entire product is reproduced by an oflice-type duplicating machine. Subscribers receive the so-caned lessons in the mail in installments and they in turn, after completing the exercises or tests, send them back the respondent.. "Then they are returned to the respondent.: they are graded according to keys or mechanical arrangement. of multiple choices by ordinary clerical help. If the subscriber attains a "passing grade " the papers are returned to him and the next set of exercises or tests is sent at the same time. The process continues until the entire "course" has been completed in this manner. If this nndefinec1 "passing grade" is not atta,inect the papers are sent to an individual, who has no training in education, for transmission to the so-called Ec1ncaJionaJ Director ,-rho mrty send snpplemenbl materia.! to the failing subscriber. There ftlso is some "spot. eJwekil1~" : of the inlbaJ QTaclinQ". The subscriber ,yorks on the materinJsentL--to him at any' place convenient. to him-his home, or place Complaint 59 F.

employment or elsewhere. There is no supervision of the manner in which the work is performed and no one cares or is concerned. Whether the subscriber' takes ten minutes or ten hours to perform test or exercise, whether he does it relying solely on his own knowledge and the text material furnished or whether he gets assistance from others or by reference to source books and dictionaries does not appear and is not a factor in determining whether he has truly achieved a " passing grade.

The quality of the materials has not been made the subject of critical testimony or evaluation. A cursory examination of them persuades me to the conclusion, having in mind the testimony of the Commission s witnesses, an official of the United States Civil Service Commission, that the material could be of help to persons preparing to take Civil Service examinations. Although I make this observation, I do not find that the material does, in fact, prepare anybody to take and pass an examination or to qualify for a position. Prior to September or October 1960, the material was prepared and distributed by "\Voolwine, as the so-called Instruction Department of the respondent's business. Following the breach between them respondent hired the Educational Director. In determining the qualifications for that position, respondent specified no qualification in pedagogy. She had completed no courses in education and has had no experience in teaching. As a matter of fact, neither the respondent nor any of the so-called educational counsellors, the graders or anyone else in respondent's employ, has any qualifications in the field of education or any training to teach. fol- Salesmen in the field, that is to say, the representatives who, lowing inquiries induced by respondent's advertising, e.ndea vor to sell the "courses" to the inquirers are called educational counsellors or counsellors. The fact is that they do not counsel at all They know nothing about. education. Their only objective is to sell respondent' s courses and to get as large a down payment as possible because their commission and rate of compensation is dependent thereon. The training a11(l instructions which these salesmen receive from the respondent will be indicated by material to be quoted below. I-Iere it need be obselTed only that they are selected primarily because of their probable sales ability without regard to their educational qualifications either from the viewpoint of their own learning or their ability to instruct or counsel young people desiring to enter the Civil Service. Although, in his literature, respondent says that the qualifications of potential subscribers will be considered before they are permitted to enroll, these salesmen have no knowledge of the req uirements for Civil Service positions and respondent provides MARCEL CO. 1191 1182 Complaint them with no information as to the qualifications necessary before a person is permitted to take any examination for employment in the Civil Service.

As will appear from the material to be quoted below, these salesmen are instructed practically to hypnotize potential buyers of the courses. In many cases, buyers do not, or are not permitted read the contract. If the contract is read to them toto and the reading it is often read partially rather than in is quite rapid. Illustrative material supplied by the respondent containing assurances, inducements and glamorous descriptions of jobs in the Civil Service is referred to only in highlight fashion and carefully kept out of the physical reach of potential subscri bel's.

On the matter of examining potential subscribers as to their qualifications, reference may be made to the fact that respondent gets thousands of leads from answers to his advertisements and from lists of high sc.hool graduates. In preparation for the hearing, respondent culled through ten thousand salesmen reports on leads which did not materialize in sales. tie was able to turn up only about twelve leads which he offered in evidence. . Those do not indicate that the rejections were because a lead was found not to be qualified to take a Civil Service examination (unless a rejection of one or two turned do,,' n because they were too old could be so regarded).

:My findings concerned' with the literature or materials used by the respondent are amply supported by documentary exhibits contained in the record. The ultimate meaning of the statements made in the exhibits coupled with the oral presentation by respondent's salesmen is not open to doubt. Neither is open to doubt that persons solicited believed and were led by respondent' s salesmen to believe the various promises and representations made to them. A question asked by respondent' counsel of one of his witnesses, the objection to which on the part of Commission counsel was sustained, suggested that the salesmen, in the heat of endeavoring to make a sale, very well might make representations and promises which were not true. (That this is and was a likely happening ought to be apparent from the material quoted below. It is elementary that respondent cannot claim immunity from the representations made by the salesmen employed by him. To the extent that such salesmen made false representations and statements over and above and beyond those contained in the written materials supplied by respondent himself, the respondent is bound thereby. Complaint 1)9 F. Yet when respondent was asked if any salesman ever had been discharged for misrepresenting, the answer was in the negative. The assurance of continual training of subscribers until such time as they pass Civil Service examinations is completely misleading. Not only is no such continual training given, but respondent testified that he does not know how many subscribers if any, ever obtained any Civil Service jobs. respondent' s main concern and preoccupation is not education or the welfare of his customers. He is concerned primarily with the pushing of sales and the collection of payments. Nobody but the respondent or his wife has access to monies remitted. ",Vhen payments come in they go directly to the respondent or his wife who takes possession thereof. Only the opened envelopes with notations as to the amounts of the payments and the payers are sent to a clerk ,yllO keeps a record thereof. The respondent's business is big. At the time of the hearing he had approximately 3 000 subscribers and the grand total of subscribers by then amounted to 15 000. lie may deposit as much as $3 000 in his bank in a single day and deposits aggregate over $200 000 in a single year. The "course" itself sells for $199.50. For this $199. , as noted above: the subscriber receives nothing but inexpensively duplicated te.sts and exerc.ises supplemente.d by some text.. In making his collections, respondent relies on scare techniques. I-Ie obtains payments in many eases bee-cause of the misunderstandings or fears of the debtors who are led to believe either.r that court actions are pending against them, that garnishment of their wages is pending or that the constable may come up and enforce payment. Although collection mnLerial and communications used by the respondent simulate court. process and give the impression that court proceedings are pending or are imminent: respondent, "hen asked, stated that he had never sued any subscriber.

shall not quote from the materials ,with respect. to ,,-which I set forth findings of fad bel my. Hmyever, for the purpose of understanding better the findings and some of the remarh:s :tbove made" I set. forth in the footnote some bulletins or communicalons sent by respondent to his sa.lesmen. 1 Hpi"pondf:nt' s bulletin, :\1ay 16, 1960, ex 114: BULLETI:\' \s you go thl'(Jugh your p!tcl1 , be sure to watch e,cry cx)1rrsi"ion they make. Moving in their chair is nil exrJrl';;:;;:ion, CrOf'sillg' their If' )::'~ oruncro~sil r: them is an expression. U",ing' a hnnclccrchief (i"icj or Kleenex is exprp",sion. Any mOYenH~Dt is an expression. WHAT .\ PEHSO:\" DOES :'\01' say tells yr,u MORE thfln what they say Jots of times. Brushing the hair on their head, rubbing their face, hf'acl, or neck ,,' ill gjyC ~-ou expre~siom;. Frown, of ally kind will ~ho,," you what you wl1nt to know, These are a11 signs they are , , , , MARCEL CO. 1193 1182 Complaint COllsidering this sort of pressure, it is not surprising that so many of the subscribers, called to give testimony herein, who obviously never should have been sold the courses, bought. Several were hopelessly and clearly not fitted for or capable to attain appointment in the Civil Service. On the. other hand, they were particularly susceptible to the lures, blandishments and pressures utilized in inducing the sales.

In making my findings and conclusions I have not. relied solely on the supporting references of Commission counsel I-Ie could have set forth additional citations to the record. In addition to the testimony as reported and the exhibits, I rely also on my impressions of and judgments on the witnesses. At least t,ro of the witnesses called by the Commission counsel were definitely, in my opinion not relia hie, but the overall we.ight and substance of n.JI the testimony have persuaded me to make the findings below. Respondent' s counsel criticizes Commission counsel's use of the Commission s press release in comml1nieations to witnesses prior to the hearing. Y\Thile I am not satisfied tllat this is a. desirable procedure, partiel1larly since there were some very significant nnderlinings of portions of the releases transmitted, it was not brought out. on the hea,ring and it does not. appear that the witnesses whose testimony I have acgiving yon without realizing- this ot 011. Be sure to not wntch for them bnt recognize thl'm wlwn yon see them. Then, do something nbont them. For instnnee, something yon Iet a smile ont of, REPRE- . Something you get n frown out of-shy owny from. People like to J1Pnr good thing-s so repeat them so they will be impres!':'ecl. Stre!':'s or repent will tend to I)nt ynlne on things. Knowing whnt to stress find \,..hen to strrss it, will give you the sale. A (-alf'smnn hns to be nlert nt nll timf's. A!':'nle cnn he lost by the t\YinkJe of the eye. A glnncr nwny from the prospect conld CMt you that sale, You can spll fin~-borly if yon nre c:nefll1 nDr1 watch the renctions yon cnm:e in a pf'r!':'on, If yon nrf' not c1o!':'ing hall' of yonI' calls, something is wrong, YOn CAN NOT SELL ON THE PHO?\E. I-TOW CA:\' J DIPHOVE MYSELF His bulletin of Allgllst 1, HJ60, CX 115: First go through the ' Pitch' won1 for word. Do Dot ndd or take n\Y:l~' :l !':'ingle word, This pitch is written in simple eyel'ydny Inng-llage tl1nt is very meaning:ful. By adding more words YOll ~dll confuse and give too much information, By taking a word oft you don t give pnongh, Do not open your briefrnse llntil you get to the part Mn: Jones, let me show you \vhat Oll might qllnJify for . Then bring out tJle opportunity shect, nnd rend to her e:sa('tl~. as olltlined in the pitch-put the opportunity slwet up at once-DO ?\OT GIVE. on LET 'l'HBl\I I-I"'VB TI-IIS AT 'LL , This is the one and only time they see this, 'file next thing- you hrin:; out of your brief case is the enl'Ollme11t agreement and rend to them 1'11('1'(' are to be-' Lenve this out on the tahoe or chnir where they will be able to see it. "'hen you tell her your job is to npproye or disnpprove her brick to the SCllOOl-::\IEAN 'THJS From then on yon tnlk of MONEY. FUTURE, FAl\lILJBS FU'TUBE, BETTERI.:\G tl1emselyes, 'lIow close to $175,00 can ~' ou come Mrs, .1ones'!' will bring you lots of money, When she ask (sic) how does a Pf-rson usu:111y pay-tell her at once-::\lost p:I~' c:1. !':'h when they nle able- Thus saying ~2-:1, jO, How clue cnn you Il1nl,e it?' If she snys $50, 00 no\V tell her to give you the $50, 00 and n deck for baln11ce of ~125,OO, If she sn~. s she does not 11:1\'e a check accollnt, then say- if you will gin~ me $75, , I'll make ~.()nr pnnllents $5,00 wl'ekl~' , E,ery !':':de should h:lye a diffeJ'ent down payment. $75, $2G, $5G, $19, $11 $-:1, $2. 50 or $1.50 should he what you get. If yon always get $10, 01' $25 it shows us that CfID. 011e out ou are only asldng for that amount, Get EVERY PBNNY down that yon of 10 snIps should be for casb, :3 or 4 out of 10 should be for $;)0 to $75 down. 3 01' 4 8honlo Complaint 59 F.

cepted were influenced by these communications or that the testimony given by them was induced by the contents of the releases. The various motions made on behalf of the respondent to dismiss the complaint are denied. I shall refer briefly to what is involved on these motions. In my opinion, the evidence to support the relief sought is substantial, reliable and probative. "\Vhile some of the evidence reflects events "which occurred after the filing date of the complaint, this evidence did not change the gravamen of the complaint. That was concerned not with particular events but with JJ1' acNces. The evidence was illustrative only of the practices against which complaint was made. It is significant that such practices continued even after service of the complaint. Respondent' s counsel says that the evidence was given by persons with unclean hands." At worst, some of the witnesses could be said not to have made the payments called for by their contracts, but this proceeding 'was not concerned with whether contracts had been performed by subscribers except to the extent that those facts came out because. respondent either induced the eon tracts by false representations or failed to perform his obligations thereunder. In any event, the equity rule to which respondent' s counsel refers is not correctly stated nor \yould it be applicable herein if it were. The Commission s practice of issuing press releases is not a basis for be between $25, and $50. Follow the abo"e and y,ou will find your fronts increasing daily. Do not get in a di;;cussion a.about what the job consist (sic) of, nor what our course consist (sic) of, Tell them the Government trains them the way the~- want them trained after they get the appointment. We train for tl:'st only, Do not discuss when, where, and what job is going to be open-YOU ARI~ SELLING EDUCATION, first, last, and always. Follow the above, and put them on a weekly basis of about $5.00, starting within about 10 days from date of con tract, telI1ng them lis you leave, 'Mrs. Jones if you are not going to study, tell me now because you will lwye to paj' regardless of your rate of study,' and you will increase your income starting NO"' . No matter what y.ou baye been doing- follow this-it means MORE )lONEY We ha.\"e the BEST setup for any salesperson in the country. Cooperate with us, and we will go all out to make your stay lasting and profitable.

His bulletin of September 19, 1960, CX 117 : E'" ery person yo.u see will give you excuses as to why they ' Can t act now.' You will find that usually they fall into the same line of thought. ' I want this program because it is a wond,erful program but I want to wait. I just don t ba,e the money now but if you will come back in about n year, I'll be ready.' If you know ahead of time before you see tlIem-that this will be their excuse, why not eliminate it before they are able to give you such 7 Woulll not this be the best idea? If YOII KNOEW (sic) somebody was going to hit you on the head e'f'ery time you see them, would you prepare J'ourself for this Sooner or later you would find a way to protect yourself. I'm SURE. You would keep practicing, planning, tl1lnking of ways to keep from being bit, 'Sl:'lf preserya tion is the first law of nature.' Protect yourself against excuses BEFORE you get them. Do not fall into this trap, Do not even listen to them. Eliminate each one BEFORE they are able to tell you, HOW! !! Very Simple. If you told them BEFORE THEY could even give you a single one, that your job is to call or weed out curiosity seeds, fly-by-niter, nosey people, sightseeers, lazy people, non-ambitious peoplf', peoIlle trJ' ing to find an excuse to keep from impro\-ing themselves, people with no feeling for their family, and their future, people that want time to think it over, peojJle peOI)le (sic) who don t know what they want and care less, people who dont' t (sic) make much eft'ort to get the money. Tell tlJem this BEFORE they can give you ANY excuse. Let them know YOU are there to nppron, or disapprove them. You arc there to see if they qualify, You are tll er(e) to see if MARCET, COMPANY MARCEL CO. 1195 1182 Complaint. concluding that the respondent has been prejudiced thereby and thus has not received "a fun and fair hearing. In addition to the reference heretofore made to the press release, it may be observed that the case was not heard on the basis of press releases but upon (a) documentary materials which.h emanated from the respondent; (b) oral testimony which.h was subjec.t to c.ross-examination and contradiction; and (c) full opportunity to the respondent to offer whatever explanations or defenses he might have had both by way of his own testimony and by way of testimony of witnesses produc.ed and selected by hiln. Fina.1ly, the trade practice rules to which respondent refers have no bearing on whether the respondent committed the acts with which he is charged herein. To the extent that the findings hereinafter set forth do not follow those requested by counsel for the Commission, such requests are denied. For example, I am not at all satisfied that respondent has misrepresented the potential earnings in or starting salaries of Civil Servic.e positions. Some of the findings made are not substa.ntioally at varia-nee with some requested on the part of the respondent.. :Ho.wever; other of the findings requested by respondent are irrelevant or are not supported by the evidence.e herein. Those findings and the proposed conclusions of law submitted on behalf of the respondent, not found in substance.e, are denied. Wants' them, Ten them that you are the one to cJecide---not them,-whether y,ou will Bppro"e or disapprove them. Tell them Marcel Co, does NOT want them if they have excuses. Your time is too valuable to waste cn loafers, pu tter offers, excuse finders. You are ther( e) with a mission to do and a limited amount of time to accomplish it. Try this line of thinking and talking and see how It comes about.. Try this and prove me wrong? Its worth it, WHAT IS YOUR EXCUSE?"

And his bulletin of February 27 , 1961, CX 126, long after the fiing of the complaint herein:

WHY DON'T YOUMAI\:E MORE MONEY Upon entering a home, we s)JOuld ALWAYS remember that tbe FIRST IMPRESSION is the LASTING IMPRESSION, Be sure 3' OU conduct yourself in a lJUsinessJike way. Get friendly enough to command respect then go to work. Be sure you have the right person on hand. Be sure you are talking to the person THAT CAN BUY. Do not waste a good lead by trying to make an' easy sale just because you lire there. Do not go through your pitch unless you have ALL the odds on yom side. Trying to sell a minor alone, is wrong. You are not only cheapening yourself, and Marcel Co,. but costing your family 1;'000 money. Trying to make a sale at their place of business is wrong-wait until1 you can get things on your side. Walt until you have your way. If they have company or friends over, you should come bllck. Trying to sell there in front of OTHER people is wrong, Be courteous at a11 Umes. Be sure you CO~IMAND and not DE:\IAND. There is a great difference, BEl a leader and not a dominating person. He a good listener when it is their tur.n to talkat first. Be 11 good tall,er when it Is your turn--Be sure ~' ou don DRIFT from your pltch' . Be sure you don t let tllem In the drivers seat. Be sure you keep control at a11 times. Be sure you are watching the faces of all. Be sure the RIGHT person is being sold. Be sure you stay on the subject. Be ,sure you know when to ' shut up, and ask for the money-' . Be flure you don t come down too fast on the money. Remember some people have the money~', :J nd. can pay cash, ARE YOU ALWAYS ALERT?"

Findings 59 F.

The following are my FINDINGS OF FACT 1. The respondent, Grady L. Rushing, is an individual engaged in business under the firm name and style of l\1arcel Company, at 8210 Hickory Street, in the City of New Orleans, Louisiana. In the course and conduct of said business he utilizes a post office box for the receipt of mail and at the present time he is utilizing Post Office Box No. 1378, New Orleans, Louisiana. 2. The business so conducted by the respondent at the present time and for three years last past is the sale and distribution of materials which he represents will prepare purchasers thereof (a) to take and pass certain United States ChTil Service examinations and (b) for employment in certain positions in the United States Ci vii Servi ceo 3. The materials offered by respondent are distributed by him through the United States mails to subscribers therefor to be studied and "worked on by them at their homes or other places convenient to them.

4. The materials are sold and distributed by the respondent in many states of the United States and he has conducted for that purpose substantial trade in commerce, as "commerce is defined in the Federal Trade Commission Act.

5. For the purpose of promoting sale of said materials, the re. spondent hires and instructs a large number of sales persons, who in turn are organized into units or groups, supervised and assigned to district managers, also hired and instructed by him. G. lie. has utilized and engaged in newspaper and radio advertising for the purpose of soliciting subscribers and to obtain "leads" to be solicited by the sales persons employed by him. 7. I-Ie has prepared or obtained contract forms and miscellaneous literature which he has furnished to sales persons for the purpose of assisting them in, and promoting, sales of such materials to persons who have been led by respondents advertising to apply to the respondent for, and to request information a about, Civil Service posi tially nnd training offered for such positions. 8. In and by such advertising, literature. and contract. forms, the respondent has representeel and caused to be represented to persons solicited by him and by the sales p~rsons employed by him for that. purpose that:

(a) exam_inations arc about to be given in the areas of solicitation for Civil Sen-ice positions listed therein; (b) persons who complete the mate~'ials (called courses) offered MARCEL co. 1197 1182 Findings by him will be able to pass Civil Service examinations for the positions selected by them;

(c) he trains applicants for the positions selected by them; (d) only persons found qualified for the positions selected by them will be, permitted to subscribe for such training; and ,,-in receive (e) persons ,,-ho subscribe Jor find complete "courses" continual training until appointed to Civil Service positions. D. The representations so made by the respondent are false, misleading and deceptive because:

(a.) Civil Service examinntions for many of the positions so set forth had not been nnnouncec1 in areas ,,-here such solicitation had been made;

(b) mej:e completion of so-called "courses" offered by the respondent does not assure that persons so doing ",ill be able to pass Ci. vii Service examinations for the positions represented by the respondent to be the subjects of such "courses (c) while some of the materials recently utilized by the respondent are aimed at pLuticuhr skills in particuJn.r positions, such training was in most instances purelyas is and has been provided is nnd general and does not provide training for any particular positions; (d) in rate instances "here the evidence discloses that sales persons employed by the respondent inquired of persons solicited as to their background, skills find educntion, such inquiries "'ere per- June! ory and not. truly de~ignec1 to determine qualifications for a.ny particular position nnd, in fnet, such sales persons '"ere not informed , did not know and "\were unable to inquire about the qualifications required for the positions which were represented as the objectives of the training offered, and did not ascerta.in or determine whether persons solicited had the qualifications required for such positions; and (e) respondent did not provide eontinual training to subscribers until they y;ere appointed to Civil Service positions. 10. The respondent, by sales persons employed by him, hns stated believe that:represented and led persons solicited by them to (a) subscribers 'yould be notified of the times and p1aees when and where examinations for the positions selected by them ,vould be held;

(b) subscribers would be speejally trained for the positions selected by them;

(c) subscribers who completed the so-called "courses" selected by them and passed the Civil Service e.xamiliations for the positions so selected ,were assured of obtaining positions in the United States Civil Service; and Conclusions 59 F.

(d) the respondent and his sales persons were connected with the IT united States Ci vii Service Commission. 11. Such representations and the conduct and remarks which led the persons solicited so to believe were false, misleading and decepti ve because respondent:

(a) did not notify and had no practice or facilities to notify subscribers of the times and places when and where any Civil Service examinations would be given;

(b) did not specially train subscribers for positions selected by them;

(c) no person is assured of a Civil Service position merely because he passes a Civil Service examination; and (d) neither respondent nor any of the sales persons employed by him is employed by or connected with the United States Civil Service Commission.

12. In the course and conduct of his business, for the purpose of enforcing payment by subscribers for the materials sold by him the respondent has devised and used miscellaneous forms and techniques which were calculated to and did tend to lead many such persons to believe that court proceedings were pending or had been completed for the compulsory collection of outstanding amounts sought to be collected by him when, in fact, no court proceedings were pending and none had been completed; one particular paper used by respondent having been made to simulate a summons and complaint and other papers and oral communications threatening garnishment of wages although no court action had been brought and no judgment obtained.

And, from the foregoing, and upon all the evidence herein, the following are my CONCLUSIONS 1. The Federal Trade Commission has jurisdiction of both the subject matter of this proceeding and of the respondent.. 2. This proceeding is in the public interest. 3. The respondent disseminated and caused to be disseminated false advertising in commerce and made and caused to be made false representations in connection with and for the purpose of promoting the sale of and selling of the materials offered by him. Such activity constitutes unfair and deceptive acts and practices in violation of the Federal Trade Commission Act.

I have given consideration, as above noted, to the fact that transmission or delivery of materials sold by respondent was interrupted because of his controversy with Woolwine and to the fact that re- MARCEL CO. 1199 1182 Order spondent has caused to be prepared a complete new set of materials now being offered by him. I-Iowever, the nature of the representations made, the manner in which respondent always has conducted his business, his emphasis on indiscriminate sales without regard to the good which a purchaser might or could derive from the materials offered by him and his almost complete preoccupation with the collection of money claimed to be due from sales persuade me that the following order is necessary and appropriate. ORDER I t is ordered That respondent Grady L. Rushing, doing business as Marcel Company or under any other name, and respondent's representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of any materials or course of instruction, in commerce as "commerce" is defined in the Federal Trade Commission Act do forthwith cease and desist from representing, directly or implication, that:

1. Civil Service examinations for particular positions described orally or in any writing have been announced or are about to be given in or for any geographical or United States Civil Service area unless such examinations actually have been announced or are about to be given in or for such area and adequate time remains for the filing of applications to participate in such examinations. 2. The completion of any series of materials or course of instruction offered by the respondent in commerce win enable a person to pass the Civil Service examination for the position selected by such person.

3. Respondent's materials or course of instruction provide training for Civil Service positions.

4. Persons solicited to purchase respondent's materials or course of instruction are examined or screened as to their possession of qualifications for positions to be sought before they are permitted to purchase such materials or course.

5. Respondent will continue to train or instruct persons who have completed a purchased series of materials or course of instruction until they are appointed to a Civil Service position or misrepresenting in any manner the extent or nature of instruction that he gives to purchasers.

6. Representing directly or by implication: (a) That purchasers of respondent's materials or course will be notified when or where examinations will be held: ;\ ,, Order 59 F.

(b) That persons eompleting said materials or course of instruction and passing a Civil Sen-ice examination are assured of or will obtain Civil Serviee positions; or (c) That respondent or his agents or representatives are connected ",ith the United States Civil Service Commission or any branch thereof or any other agency of the United States Government. 7. Usii1g any document that simulates a court process in connection ,,- ith the c.ollection of accounts from debtors; or using any other document or practice which may suggest or imply that a debtor being sued when sneh is not the fact.

ORDER DENYING l~ETITION OF RESPONDENT GRADY L. RUSHING, .AND DECISIO::--T OF THE CO:;,\Il\IISSION The initial deeision of the hearing examiner having been filed in this matter on September 29 1D61 and respondent Grady L. Rushing on October 30, 1DG1, having filed a petition for review of said initial decision apparently in the belief that such review' ould be governed by the requirements of S 4.20 of the Commission s amended and l'Ewised Rnles of Practice, published July G , IDol, and counsel supporting the complaint having filed an ans"-e.r in opposition to said petition; fmd It appearing that the reception of evidence was completed in this ease prior to July 21 , 10G1 , and that under F. R.. Document 61-6766 published in the Federal Register on July 19, 1961, any appeal from the initial decision is governed by the Commission ~s Rules of Prac.tice, published :May 6 1D55 as amended, and that the amended and revised ;Rules of Practice, published July 6, 1961 , are not. applicable in any respect to the proceeding; and It further appearing that the respondent. has failed to file a notice of intention to appeal as required by 8 3.22 of the applicable Rules of l:)ractiee, and that the petition for review"\", although filed ",it-hin the time referred to in the amended and revised Rules of Practice, was not filed within the time permitted by the applicable rule for the filing of a notice of intention to appeal; and The Commission having nevertheless determined that in the spec.ial circ.ul11stances a review,,- of the entire proceeding in the light of the questions presented in the respondent' s petition would be in the public interest; and The Commission having made sneh review and having determined thereform that no substantial grounds have been presented in the petition for modifying or setting aside the initial decision of the hearlllg exn.ml11er:

AUDIOGRAPHIC POTO1'IAC CORP. ET AL. 1201 1182 Complaint 1 t i~ 01Yle7' That respondent's petition, treated as an appeal, be and it hereby is, denied.

It is further ordered That the findings, conclusions, and order contained in the initial decision of the hearing examiner be, and they hereby are, adopted by the. Commission.

It is /,u7,the7' o?yle?' That respondent Grady L. Rushing shall within sixty (60) cb:ys after service upon him of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which he has complied with the order to cease and desist contained in the initial decision. By the Commission, Commissioner Kern not participating.