Remco Industries, Inc.

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

IN THE ~fA TTER OF RE~1CO INDUSTRIES, INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\HnSSION ACT Docket 0-199. Oo1npla.int, Ju, ly 1962-Decision, Ju.ly 26, 1962 Consent order requiring a Newark, N. , distributor to cease misrepresenting toys by such practices as representing falsely in television commercials that a transistor radio could be constructed from the components contained in its REMCO INDUSTRIES, INC. 311 310 Complaint Radio craft Kit" and radio broadcasts transmitted, and that its "Electro Chemistry Science Kit" contained a battery and a glass beaker. CO:MPLAINT Pursuant to the provisions or the Federal Trade Commission Act and by virtue or the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Remco Industries Inc., a corporation, hereinafter referred to as respondents, has violated the provisions or 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. Respondent Remco Industries, Inc., is a corporation organized, existing and doing business under and by virtue or the laws or the State or New Jersey, with its principal office and place or business located at 113 North 13th Street, in the city or Newark, State or New PAR. 2. Respondent Remco Industries, Ine., is now, and for some Jersey. time last past has been, engaged in the advertising, offering for sale sale and distribution or toys and related products, including toys designated "Radiocrart ICit" and "Electro Chemistry Science lCit", to distributors and retailers for resale to the public. PAR. 3. In the course and conduct or its business, respondent now eauses, and for some time last past has caused, its said "Radiocraft IGt" and "Electro Chemistry Seience lCit", when sold, to be shipped from its place or business in the State or New Jersey to purchasers thereof located in various other states or the United States and in the District or Columbia, and maintains, and at all times mentioned herein has maintained, a substantial course or trade in said products in commerce, as "commerce~' is defined in the Federal Trade Commission Act.

PAR. 4. In the conduct or its business, at all times mentioned herein respondent has been in substantial competition, in commerce, with other corporations, firms and individuals in the sale or radio kits science kits, and other toys and related products. PAR. 5. In the course and conduct or its business and for the purpose or inducing the purchase in commerce or the said "Radiocrart IGt" respondent made certain statements, representations and pictorial presentations with respect thereto, by means of commercials transmitted by television stations located in various states or the United States and in the District or Columbia having sufficient power to carry such broadcasts across state lines.

.;.

Complain t 61 F.

PAR. 6. Among and typical of the statements and representations made and appearing in said advertisements disseminated as hereinn bove set forth are the following :

This REl\1CO Tran~istor Radio I made myself. All you have to do is put together all the parts that come in the Remco Kit. The transistor, the tuner and the separate loud speaker for broadcasting. '" '" '" get your RE)ICO Radio at your favorite toy store--flom $3.95 * * * Call you do ~.our own broadcasting too? Yeah, sure. I'll do the announcing with this microphone * PAR. 7. Through the use or the aforesaid advertisements, and others containing statements and representations or the same import not specifically set forth herein, respondent has represented, directly and by implication:

(1) That it is possible to transmit broadcasts by radio through use or the components contained in each "Radiocraft let" (2) That a transistor radio can be constructed from the components contained in each "Radiocrart l\:it"

PAR. 8. An enlargement or a frame extracted from said television commel cials, illustrating typical representations with respect to the component parts or the said "Radiocrart let" and the manner in which the said toy purports to perform, as alleged in paragraphs 6 and 7 above, is marked Exhibit "A" and incorporated herein by reference. PAR. 9. Said statements, representations and depictions are. raise; misleading and deceptive. In truth and in fact (1) Radio broadeasts cannot be transmitted through use or the components contained in any "Radiocrart l\:it" (2) A transistor radio cannot be constructed from the components contained in one or the advertised "Radiocrart l\:its PAR. 10. In the course and conduct or its business and for the purpose of inducing the purchase in commerce or the said "Electro Chemistry Science let", respondent made certain statements, repre. sentations and pictorial presentations with respect thereto, by means of commercials transmitted by television stations located in various states or the United States and in the District or Columbia having sufficient power to carry such broadcasts across state lines. PAR. 11. Among and typical or the statements and representations made and appearing in said advertisements disseminated as herein- 1 Pictorial exhibit "A" not published.

REMCO INDUSTRIES, INC. 313 310 Complaint above set forth is the depiction or a battery connected to electrodes ill a glass beaker, accompanied by the oral representation: Electro Chemistry Scienee IGt"

PAR. 12. Through the use or the. aforesaid advertisements, and others ' containing statements and representations not specifically set forth herein, respondent has represented, directly and by implication that the "Electro Chemistry Science Kit" contains a battery and a glass beaker as depicted.

PAR. 13. An enlargement or a frame extraeted from said television commercials, illustrating typieal representations with respect to the component pads or the said "Electro Chemistry Science IGt" and the manner in which the said toy purports to perform, as alleged in paragraphsll and 12 above, is marked Exhibit B" and incorporated herein by rererence.

PAR. 14. Said statements, representations and depictions are raise lllisleadingand deceptive. In truth and in fact a bntteryand a glass beaker are not components or the "Electro Chemistry Science IGt", and sa.id toy is not as: large asthet he beakerdepictedsupplied as a componentbeaker.or the . P.\R. 15. Respondent's toys, including the "Radiocraft IGt" and Electro Chemistry Science IGf~, are designed primarily for ehildren and are bought either by or for the benefit or children. Respondent' false, misleading and deceptive advertising claims thus unfairly ex~ ploit a consumer group unqualified by age or experience to anticipate or appreeiate the possibility that the representations may be exaggerated or untrue. Further, respondent unfairly plays upon the arfection or adults, especially parents and other close relatives, for children, by inducing the purchase or toys and related products through raise, misleading and deceptive. claims or their performance which claims appeal both to adults and to children who bring the toys to the. attention of adults. As a consequence or respondent's exaggerated and untrue representations, toys are purchased in the expectation that they will have charaetedstics or perform ac~s not substantiated by the facts. Consumers are thus misled to their disappointment and competing advertisers who do not engage in raise, misleading or deceptive advertising are unfairly prejudieec1. PAR. 16. The use by respondent or the aforesaid raise, misleading and deceptive representations has had, and now has the capacity and tendency to mislead members or the purchasing public into the erroneous and mistaken belief that said representations were, and are, true 2 Pictorial exhibit "B" not published.

Decision and Order 61 F.

and into the purehaseor substantial quantities of the products of respondent by reason or said erroneous and mistaken belief. PAR. 17. The aforesaid acts and practices of respondent, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondent's competitors and constituted, and now constitute unfair methods or competition in commerce and unfair and deceptive acts and practices in commerce, in violation or Section 5 or the Federal Trade COlnmission Act.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondent named in the caption hereof with violation or the Federal Trade Commission Act, and the respondent having been served with notice of said determiilation and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional raets set forth in the complaint to issue herein, a statement that the signing or said agreement is for settlement purposes only and does not constitute an admission by respondent 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 agreement, hereby accepts same, issues its complaint in the ror111 contemplated by said agreelnent n1akes the following jurisdictional findings, and enters the following order:

1. Respondent, Remco Industries, Inc., is a corporation organized existing and doing business under and by virtue or the laws or the State of New Jersey, with its office and principal place or business located at 113 North 13th Street, in the city or Newark, State or New Jersey.

2. The Federal Trade Commission has jurisdiction of the subject matter or this proceeding and or the respondent, and the proceeding' is in the public interest.

ORDER 1 t is ordered That respondent Remc.o Industries, Inc., a corporation, and its officers, and respondents agents, representatives and employees, directly or through any corporate or other cleviee, in connection with the offering for sale, sale or distribution or toys or related , , , , , , MALE PUBLISHING CORP. ET AL. 315 310 Complaint products in commerce, as "cOlnmerce" is defined in the Federal Trade Commission Aet, do forthwith cease and desist rrom: 1. Representing, by use or any illustration, depiction or denionstration, alone or accompanied by oral or written statements purporting to illustrate, depict or demonstrate any toy or related product, or the performance thereof, or representing in any other manner, directly or by implication, that any toy or related product contains a component or performs in any manner not in accordance with fact.

is further ordered That the respondent herein shall, within sixty (60) days after service upon it or this order, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order.