A. C. Weber & Company, Inc.

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IN THE j\1:ATTEI: OF A. C. WEBER & COMPANY, IKC., ET AL.

CONSENT ORDER, ETC., I::'" REGARD TO THE ALLEGED VlOLATIOX OF THE FED- ERAL TRADE CO)DIISSIO ACT Docket 8-125. Complaint, June "i 19Cl-Decision, Feb. LJ, 1ge;! Consent order requiring Chicago distributors of '; Plaff" ::e\ying mne:hi11PS to cease representing' falsely, in ad'Vertisr.ments and fI(hertising mats distributed to dealers for their use, that excessive allounts '''ere the usual retail prices of their products and that tbe sewing llacbines were guaranteed for life or unconditionally; and to ('case pla('ing in the hands of their dealers 290 FEDERAL TRADE COMl\ISSIOK DECISIONS Complaint 60 F.

circulars describing a sales plan involving bait advertising which represented falsely that they were making a bona fide offer to sell a 100v-priced machine not intended to be sold at the advertised price hut described as "an excellent tool to enable you to 'step-up' your customer to Lhe (higher-priced) model"

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 A. C. ,Veber & Company, Inc., a corporation, Albert C. IVeber, individually and as an offcer of said corporation, and Frank Dolven, individual,lly and as Sales Manager 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 the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. A. C. ,Veber & Company, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illnois, with its offce and principal place of business located at 216 North Canal Street, in the city of Chicago, State of Ilinois.

Respondent Albert C. ,Veber is President and respondent Frank Dolven is Sales Manager of said corpomtion, and their addres is the same as that of the corporate respondent. These individual respondents formulate, direct and control the acts, practices and policies of said corporate respondent, including those hereinafter alleged. PAH. 2. Respondents arc now, and for some time last past have been, engaged in tho advertising, offering for sale, sale and distribution of sewing machines to dealers. 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 Illinois to purchasers thereof located in various other States of the United States and in the District of Columbia, and maintain, and at all times mentioned herein have main tained, a course of trade in said products in commerce, as "commerce is defined in the Federal Trade Commission Aet. PAR. 3. Respondents, in the course and conduct of their business and for the purpose of inducing the purchase of their products, have produced and distributed to their dealers various advertisements and advertising mats to be used by said dealers in advertising and offering respondents' products to the public. Respondents have participated in the publication of such advertisements through sharing the A. C. WEBER & CO. IKC. ET AL. 291 2S9 Complaint cost of the publishing of said advertisements in newspapers and otherwise. Among and tpyical, but not all inclusive, of the representations caused to be published are the following: A Fabulous PFAFF $88 Valued at $176 A Fabulous PFAFF $130 Valued at $219 A Fabulous PFAFF $9S Valued at $176 1h Price Sale Only 6 days left A Fabulous PFAFF $98 Valued at $176 Reg $289 this week $149 includes cabinet Reg $99. This week only $68 Save $31 Reg $124.95 Save $25 $99.

Reg. $B79 Ko. 230 P AFF 1 all three for only Reg $26. 00 Iron and Board $299 'With usual Pfaff Guarantee Lifetime Guaranteed Lifetime Guarantee PAIL 4. Through the use of the statements and representations set forth hereinabove, respondents and their dealers have represented that: 1. The prices set forth in connection with the word "Valued" were the prices at which the sewing machines advertised were customarily and usually sold in the trade area or areas where the representations were made, and that the differences between such prices and the lower sales prices represented savings from said trade area prices. 2. The prices set forth in connection with the term "Reg" were the prices at which the dealers publishing the advertisements had sold tho advertised machines in the recent regular course of business, and that the differences between said prices and the lower sales prices were savings from said dealers' usual and customary prices. 3. Their sewing machines are guaranteed for life, or arc unconditionally or completely guaranteed.

P/I.R. 5. The above said representations are false, misleading and deceptive. In truth and in fact:

1. The prices set forth in connection with the word "Valued" were in excess of the prices at which the sewing machines advertised were , Complaint 60 .'I'. usually and cl1st01llarily sold in the trade area or areas where the representations were made and the differences between such prices and the lower sales prices did not represent sa viugs from trade area prices. 2. The prices set forth in connection with the term "Reg" were in exce.-os of the prices at which the dealers publishing the advertisements had sold the advertised s8\\ing machines in the recent regular eoursc of business and the differences between such prices and the lower advertised prices did not reprcscnt savings from said dealers usmd and customary prices.

3. Respondents' machines arc not guaranteed for life but, on the contrary, many of the essential parts of said machines are guarauw teed for only one year, and the guarantee is subject to other limita tions not disclosed in the advertisements in which such guarantee representations Ivere made.

PAR. 6. Respondents have also engaged in unfair and deceptive practices, in commerce, through the use of a sales promotion plan '1'hieh placed in the hands of their de ders the means of engaging in bait tdvertising. In connection therewith, respondents cfIused to be distributed to dealers of their sew"ing machines a form letter or circular stating as follows:

TO: ALL PFAFF DJiALERS SEHVICED BY I' HE CIlCAGO OF:'ICE, A. C. 'YEBEn & CO. , 1KC- SUBJECT: PFAFF #13D ZIG-ZAG MACIIKIc FOR CHRISTMAS Psmla T10:: Al\D EW PRODLCTS.

GE"TLEMEN:

We call your attention to the below-listed new products: 1. Pfaff Model #139 fot Christmas promotion: We have secured a limited number of this low-priced, three position, manual zig-zag machine just for IDGO Christmas promotion. This model is to be used strictly as a "leader" and quantity is limited to two (2) units per dealer. This model u;-il not be available after January 1st, 1961. Here s The Good Ne\vs:

YOUR COST-$99. 00 in Complete POTtable Step- Up To Higher" Priced Models 'l' l1e #139 is an excellent tool to enable you to "step- " your customer to the model #259, #260A Remember-anyl)(Hly efin sell this machine to a cllstomer, so "nail it to the floor" find get the 2GOA and 360A sale.

We repeat, we wil not gtlarantee delivery of over two #139 units to a dealer so govern yourself accordingly.

How To Advertise The #13.9 Enclosed are two proof s11eets of mats now available to promote this machinf'. Take your choice of how you \,i h to ach-ertise it-in n base. in a complete portable, ill fi #103 cabinet, or in a #40,) desk- A. C. WF,BER & CO. , INC., ET AL. 293 2S9 Complaint The advertising mats furnished dealers in connection with this promotion sUttee! as follows:

(Dealer s llame to be inserted) Breaks All Price Barriers 1961 Pfaff Zig Zags Automatically for the next 7 days only at this price $000 W..ith a Lifetime Guarantee and 11-11". Dealer this is a 4-way ad. Take your choice of any of the following variations (1) Advertise 'with portable base only at $139 (2) Advertise with portable case at $159 (3) Advertise with console at $179 (4) Advertise with lIesk at $19D Through the use of this plan respondents pJacccl in the hands of their de,alers the means and insi:rumenta.lities whcreby their dealers could, ane! die!, represent that they were making a bona fide offer to sell the # 139 sc,,-ing machine at the advertised price and that there was a suffcient number of said machines on hand to 1l1cet the reasonable, anticipated demand.

PAIL 7. Said representations were false, lllisleac1ing and deceptive. In truth and in fact, under said plan it \Vas not intended that the dealers would sell the advertised machines at the advertised price, or any other price, but rather that they should refrain from selling the advertised machines and sell higher priced ma,chines to persons who responded to said advertisement. Only two of the advertised maehines ",were mado available to dealers by respondents, which number under ordinary circumstances was insuffcient to meet the reasonable, anticipated demand.

PAR. 8. Hespondents' said acts and practices, as hereinabove set forth, serve to place in the hands of dea.lers means and instrumentalities whereby such dealers 111ay mislead the public as to the llsuaJ and customary prices of respondents: sewing machines, the nature and extent of the guarantee of such machines, and the availability of certain specially priced machines.

PAR. 9. The use by respondents of the aforesa,id fal::e, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief th tt such statements and representations \'-ere, and are, true and into the purch2Se of substantial quantities of respondents: products by reason of said errone011S and mistaken beljef.

PAR. 10. The aforesaid acts and practices of respontlcnrs, as herein a.alleged, were, and are, a.1 to the prejudice and injury of the public and of respondents: competitors and constituted, anclnO'v constitute 719- 603- G4-- Decision and Order 60 F.

unfair and cleceptiye acts and practices in commerce, within the intent and meaning of the Federal Trade Commission Act. DECISION AND ORDER This matter having come on to be heard by the Commission upon rt record consisting of the Connnission s complaint charging the respondents named in the caption hcreof with violatioll of the Federal Trade Comnljssion Act and an agreement by and between respondents and counsel supporting the complaint, which agreement cont.ains an order to cease and desist, an admission by the respondents of an the jurisdictional facts alleged in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the Jaw as alleged in the complaint, and waivers and provisions as required by the Commission s rules; and The Commission having considered the agreement, and order contained therein and being of the opinion that the agreement provides an adequate basis for appropriate disposition of the proceeding, the agree-ment is hereby accepted, the following jurisdictional findings arc made, and the following order is entered: 1. Respondent A. C. 'Weber & Company, Inc" is a corporation existing and doing business under and by virtue of the laws of the State of Illinois, with its offce and principal place of business located at 216 orth Canal Street. , in the city of Chicago, State of Illinois. Respondent Albert C, 'Weber is an individual1 and an officer of said corporation, and respondent Frank Dolven is aninclividual and Sales Manager of said corporation. Their address is the same as that of 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 It i8 ordered That respondent A. C. 'Weber & Company, Inc. , a corporation, and its offcers, and respondents Albert C. 'Weber, individnal1y and as an offeer of said corporation, and Frank DDlvcn, indiviclual1y and as Sales l\Ianager of said corporation, Rud respondents representatives, agents and employees, directly or through any corporate or other device., in connection with the offering for saJe, sale or distribution in commerce, as "commerce " is defined in the Feeleral Trade Commission Act, of sewing machines and accessories, or an other product or products, (10 forthwith:h cease. and desist from: A. C. WEBER & CO. , INC., ET AL. 295 l89 Decision and Order A. Representing, directly or by implication, that: 1. Any amount is the customary and usual retail price of merchandise in a trade area or areas when it is in excess of the price at which said merchandise is usually and regularly sold at retail in the trade area or areas where t.he representations are made. 2. Any savings are afforded in the purchase of merchandise from the price at which said merchandise is usually and cust01narily sold at retail in a trade area or areas where such representations are lia, unless the price at which it is offered constitutes a reduction fr01n the price at which said merchandise is usually and customarily sold at retail by respondents' dealers in such trade area or areas. 3. Any amount is respondents' dealers ' usual and customary price of merchandise when it is in excess of the price at which said merchandise is usually and customarily sold by said dealers in the recent regular course of their business.

4. Any savings are afforded in the purchase of merchandise from respondents' dealers ' usual and customary price, unless the price at which it is offered constitutes a reduction from the price at which said merchandise is usually and customarily sold by said dealers in the recent regular course of their business.

5. Any product is guaranteed. unless the terms and conditions of the guarantee and the manner in which the guarantor will perform are clearly set forth.

B. Lsing the word "value" to describe or refer to the price of merchandise when such amount is not the price at which the merchandise has been usually and customa.rily sold at rcta.il in the trade area or area.s where the representation is made.

C. Using the word "Reg" or "Regular" to describe or refer to the price of merchandise when such amount is not the price at which said merchandise has been usually and customarily sold by respondents or their dealers in the recent regular course of business. D. Misrepresenting in any manner the amount of savings available to the purcha.sers of respondents' merchandise; or the amount by which the price of said merchandise is reduced from the price at which it is usually and customarily sold by respondents or their dealers in the normal course of their business.

E (1) Placing in the hands of retailers or others any sales program or means of offering merchandise for sale when such offer is not a bona fide offer to sell the merchandise so offered. (2) Representing in any manner that merchandise is being offered for sale when such offer is not a bona fide offer to sell the merchandise. It is further ordered That the respondents herein shall, within sixty 296 FEDERAL TRADE CO \ISSION DECISIONS- Complaint 60 F.

(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 this order. Ix THE IA rrER 01 SWISS LABORATORY INC., ET AL.

CD:XSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATlOK OF THE FEDER. L TRADE CO BnSSION ACT Daoket 0-77. Com.plaint, Feb. 11,. 1962-Decision, Feb. 14, 1962 Consent order requiring Cleveland, Ohio, distributors Df plastic metal menders designated "Black Magic" and "Elack Jack" to jobbers for resale to autobody repair shops and automotive supply cbains, to cease representing falsely in advertisements in magazines, in form letters and on labels, and otherwise that the substances used in their metal menders were non toxic and would not cause itching, that their said "Black .:lagic" metal mender was endorsed by a shop nurse, and that their said "mack Jack" product was a solder; and i'acquiring them to label their products with warnings of dangers attendant Oll use tbereof.

CO),lPLAIXT 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 Swiss Laboratory Inc., a corporation, and Leon ,V. Di unond, illc1ividual1y and as an offcer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the COllnission that a proceeding by it in respect thereof ,,' ould be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Swiss Laboratory Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Ohio, with its principal offce and place of business located at 1533 Hamilton A venue, in the city of Cleveland, State of Ohio. ltespondeut Leon ,V. Diamond is an oficer of the corporate respondent. He formulates, directs and controls the 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.e respondent. PAR. 2. Respondents are now, and for some time last past have been enga,gcd in the advertising, oflering for sale, sale and distribution of among other things, plastic metal menders designated "Black :Magic ,;:

SWISS LABORATORY INC. , ET AL. 297 296 Complaint and "BJack Jack" to jobbers for resale to alltobody repair shops and automotive supply chains.

PAR. 3. In t.he course and conduct of their business, respondents now cause: and for some time last past have caused, their said products, when sold, to be shippee! from their place of business in the State of Ohio to purchasers thereof located in various other States of the United States and in the District of Columbia, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said product in commerce, as "commerce" is defined in the Federal Trade C0llJnission Act.

PAR. 4. In the course and conduct of their business, and for the purpose of inducing the sale of their p1nst.ic metal menders designated "Black i\fagid and I'Black .J ack" , respondents have made certain statements and representa.tions in advertisements in magazines of national circulation, in form letters and on labels, and by other media, of which the following arc typical: SHOP NURSE SAYS:

Hemember, with BLACK :'L\GIC you re sure there are O ITCH.

XO:\-'lOXIC BLACK MAGIC with its original Non-Toxic Cream Hardener.

BLACK JACK :b lexiblc SOLDER with NOX-Toxic CREAM HARDENER PAR. 5. By and through the use of the aforesaid statements and representations, and others of similar import but not specifically set forth 11ercin respondents represente(1, directly or by implication: (1) That the substances useel in t.he putty and cre.am hardener cOlnposing the plastic metalmenclers are non- toxic and win not cause itching.

(2) That their plastic mct"l mender designated "Black Magic " is endorsed by :: shop nurse.

(3) That the metal mender designated "Black Jack" is a solder. PAR. 6. The aforesaid statemcnts and representations \fcre, and arc false, misleading and deceptive. In truth and in fact: (1) The putty and cream hardener are not 110n toxic and may cause itching or skin irritation as the putty contains cobalt naph- 298 FEDERAL TRADE CO:VIMISSIQN DECISIOKS Complaint GO F.

then ate and the cream hardener contains benzoyl peroxide, both of which are prima.ry irritants and sensitizers to the skin. (2) The plastic body mender has not been endorsed by any type of nurse.

(3) The metal mender designated "Black Jack" doe.s not have the characteristics and effectiveness of a solder. Its effectiveness depends pr:ncipally on its organic and non-metallic ingredients. PAR. 7. The labels on the respondents' putty and cream hardener are misleading in that they fail to reveal facts ll1atcrial with respect to the consequen( s which may re,sult from the use of said products as directed on the label for the putty and with respect to conditions of storage of the cream hardener. In truth and in fact, the cobalt napthenate contained in the putty and the benzoyl peroxide contained in t.he cream hnrdener may through prolongcd or repeated contact with the skin irritate and sensitize the skin and, therefore, in case of contact should be flushed from the skin. Both the putty and cream hardener are toxic if taken intcrnal1y a,nel, the.refore, should be kept out of reach of children. The benzoyl peroxide contained in the cream hardcne.r may be flammable if coming in contact with heat or flame and this fact is not disclosed.

PAR. 8. In the conduct of their business, at all times mentioned here- , respondents have been in substantial cOllpetition in commerce with corporations, firms and individuals in the sale of plastic metal nlenders of the same general kind and nature as that sold by respondents.

PAn. 9. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices and failure to ntn the purchasing public on the labels of the products of the da,ngers attendnnt to the use of the products have had, and now have the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said stat.ements and representations were and are true and that there is no danger in use of the pro duets and into the purchase of substantial quantities of respondents' products by reason of said erroneous and mishlken beJicfs.

\R. 10. The aforesaid acts and practices of respondents, as herein alleged, were, and al' , all to the prejudice and injury of the public and of t.he respondents' competitors and constituted, and nmv const.itute, unfair methods of competition ill comlnerce (lnd unfair and deceptive acts and practice.s in con1111e1'C8 in violation of Section;) (a) (1) of the Federal Trade Commission Act.

rISS LABORATORY INC.) ET AL. 299 296 Order DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents having been served with notice of said determination and with a copy of the complaint the Con1mission intended to issue, together with a proposed form of order; and The respondents and cOUJ1sel for the Commission having thereafter executed an agreement containing 'R consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as set forth in such complaint and waivers and provisions as required by the Commission s rules; and The Commission, having considered the Rb:reement, hereby accepts same, issues its complaint in the form contemplated by said agreement Jl1akes the following jurisdictional findings, and enters the following order:

1. Respondent, Swiss Laboratory Inc. is a corporation organized existing and doing business under and by virtue of the laws of the State of Ohio, with its offce and principal place of business located at 1533 Hamilton A venue, in the city of Cleveland, State of Ohio. Respondent Leon ,V. Diamond is an offcer of said corporation and his address is the same as that of said corporation. 2. The Federal Trade Conm1ission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proee,eding is in the public interest.

ORDER It is ordered That respondent S,viss Laboratory Inc., a corporation and its ofiicers, and respondent Leon ,V. Diamond, individually and as an offcer of said corporation, and respondents' representatives agents and employees, directly or through any corporate or ot.her device) in connect.ion with the nla.nufacturing, advertising and oifering for sale, sale 'and distribution of plastic metal Tnenuers dcsigl1ated Blaek 1agid\ and "Black Jack", or any other product or products of similar composition or possessing substantially similar properties under whatever name sold, do forthwith cease und desist from: 1. Representil1s, directly or by implication: (a) That such products are non-toxic or ,vin not cau e itching or skin irritation.

, .

300 FEDERAIJ TRADE COMMISSIOK DECISIO Complaint 60 ".

(b) That the product designated "Black Magic" has been endorsed by a nurse or representing, contrary to fact., that said product has been endorsed or approved by any other person or organization. 2. Using the word "solder" to describe any product which is not a met.allic compound or otherwise misrepresenting the composition of the product.

3. Failing to include on the label on the container for the putty the following statements:

CAUTIO : Keep out of reach of children. If taken internally, induce vomiting; consult physician. Avoid prolonged or repeated contact with skin. In case of contact, flush skin with water.

4. Failing to include on the label on the container for the cream ha.rdener the following statements:

CAUTION: Keep away from heat or flame. Keep out of reach of children. If taken internany, induce vomiting; consult physician. Avoid prolonged or repeated contact with skin. In case of contact, flush skin with water. It lslarthel' 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 fornl in which they have complied ,with this order.