National business Service, Inc.

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

In the Marrer or NATIONAL BUSINESS SERVICE, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-246. Complaint, Sept. 28, 1962—Decision, Sept 28, 1962 Consent order requiring a collection agency in Elizabeth, N.J., to cease, in efforts to obtain information as to the current addresses, etc., of delinquent debtors, using such misleading questionnaire forms as those stating falsely that “money will be sent you if you will complete this questionnaire ... within 10 days’, or which bore the words “Official Questionnaire”. “Please send me ‘Free Post Paid’ GIFT Reg. No. __-_”, or simulated a card used in an IBM key punch machine and purported to be “Current Employment Records” forms.

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 National Business Service, Inc., a corporation, and Eli Levine, 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 the public interest, hereby issues its complaint, stating its charges in that respect as follows:

Paracrary 1. Respondent, National Business Services, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, with its principal office and place of business located at 208 Broad Street, Elizabeth, N.J. Complaint 61 F.L.C.

Respondent, Eli Levine, is an officer 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 business 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 operation of a collection agency and in collecting debts owed to others, upon a commission basis, contingent upon collection.

Par. 3. In the course and conduct of their business, respondents are now, and for some time last past have been, receiving accounts for collection from persons, firms and corporations located outside the State of New Jersey and have been referring accounts which they have received for collection to persons, firms and corporations in other states than New Jersey and have been collecting accounts owed by persons, firms and corporations who are located outside the State of New Jersey. In addition thereto respondents have caused certain forms, hereinafter referred to, to be transported from their place of business in the State of New Jersey to other states in the United States and have sent and received, by means of the United States mail, letters, checks and documents to and from states other than the State of New Jersey and maintained, and at all times herein mentioned have maintained, a substantial course of trade in said business in commerce, as “commerce” is defined in the Federal Trade Commission Act. Par. 4. In the course and conduct of their business, respondents frequently desire to obtain information as to the current addresses, places of employment and other pertinent information as to persons whose delinquent accounts the respondents are seeking to collect. For this purpose they use, and have used, certain printed forms. These are principally of four types or kinds. Typical but not all inclusive of said forms are the following:

1. “American Information Service” form. This form consists of a single sheet of paper with printing thereon, by which the recipient is told that money will be sent if the questionnaire is completed and returned within ten days. The form isas follows: NATIONAL BUSINESS SERVICE, INC., ET AL. 885 883 Complaint American Information Service 21 Broadway HamMMonton, N.J.

Money will be sent to you if you will complete this questionnaire and return to this office within 10 days. Enclosed is a self addressed envelope for your convenience.

PLEASE TYPE OR PRINT ALL INFORMATION Ocecupation...------_---- eee ene eee Date of Birth-__._..-...-._______--- Employed by.-----------------------------------------------------~-------- Employer’s Address____-.-------------------------------------------------- Bank ___/_-_--_-_-------------------~-------------+------~---------++------- Husband's or Wife’s name___--_---_----------------------------------------- Employed by..--------------~-----------------------------------------+-+--- Address _...---_---.----~--------------------~-------+--~~-------------------+ Nearest Phone.__-------------------- Business Phone__.------.------.-~---- Said form is mailed in a white window envelope, the return address being “American Information Service, 21 Broadway, Hammonton, N.J.” Also enclosed is a return envelope with the same address. 2. “Official Questionnaire” form. This form consists of a yellow, official appearing card, which is as follows: (Side One) OFFICIAL QUESTIONNAIRE 15386 ATLANTIC AVE., ATLANTIC CITY, NJ.

AMOUNT OF CLAIM TO BE DETERMINED Fill in the Reverse Side of this form for identification of this claim. DO NOT PIN, RETURN FOLD OR MUTILATE _ FINAL NOTICE _ At ONCE ANSWER ALL QUESTIONS ON REVERSE SIDE OF THIS FORM Complaint 61 F.T.C.

(Side Two) OFFICIAL QUESTIONNAIRE Name __. . _- Spouse’s Name__-_-----_-_- Address pene een ne een ene nee nee City ---- --- Date of Birth_ _.._ Nearest Phone_..---------------- IMPORTANT All questions are accurate as of 195 IMPORTANT Whom do you Bank with J----- Bank’s Address or Branch Name___---.------------------ City- - - . -- State --- -- What Kind of Banking Do You Do—Checking 0 Savings 0 Loan QO Current Employer’s Name-- — - - -- Current Employer’s Address___....-------~------- : City_-.---------------------~----------- - State. -- - -~-- Said form is mailed in a white window envelope with a return address of “Official Questionnaire, 1586 Atlantic Avenue, Atlantic City, N.J.” Also enclosed is a brown envelope with the above address printed thereon.

. 8. “Mr. Q” form. This form used by the respondents consists of a card which is printed as follows:

Please mail me “Free Post Paid”

GIFT Reg. No.

Name _____________---- +--+ + ee ee - Print or type name in full Address .-_-------_-----------~--~----+-~-+----- +--+ - = ----- eee Print or type City or Post Office-_-__--------------------------------------------~--------- And State..-._--.-_---------------------------------------------+---- Nearest Phone.____------------------------~-------------------+--+----------- Employed by_-------------------------------------------------------------- Give complete name of employer Ad@ress _-__-----------------------~--+---+-------+------+-------------+----+---- City and State__----------------------------------------------------------- Husband’s or Wife’s First Name_------------------------------------------- Bank, ----~-~2----------- woe woe eee eee eee eee Print or type name in full Address ..-----------+-------------------------~- +--+ ++ ee oe + + Print or type Checking [] Savings (] . Loan Own Home?___--------------------------------------- Rent?_---.-_--- Said form is mailed in a white envelope with a return address of “Mr. Q, 1267 N. Vermont Ave., Los Angeles 28, California.” Printed on the reverse side of this form is the same address as on the envelope. 4. “Current Employment Records” form. This form consists of a card with small numbers printed on one side to simulate a card used NATIONAL BUSINESS SERVICE, INC., ET AL. 887 883 Complaint in an IBM key punch machine. The appearance of the other side is as follows:

Return This Form Within Five (5) Days 748 WASHINGTON BLDG. STATH OF NEW JERSEY WASHINGTON, D.C. STATUTES FILE NO. AX249 Section 43-21-16 of Chap. 21 Report your new employer, Employers ad- (Unemployment Compensation) dress, city and state on lines A, B, and C. provides—That whoever makes a false statement or representa- SOCIAL SECURITY tion, knowing it to be false, or NUMBER knowingly fails to disclose a ee lala cacea a material fact, to obtain or increase any benefit or other payerated -- coon ment under the Unemployment Compensation Law, either for 1961-62 himself or for any other person, Ay ------nnn nn nnn nnn nner shall be liable to a fine of not less than $20.00 nor more than B, --~-----------n nnn nnn $50.00 The purpose of this card is to C, ~-~---------------- 9-00 0- obtain information concerning a delinquent debtor, and to fur- OCCUPATION ther advise that this is not conpenne eee 5 nnne nected in any way with any state or the United States eee eee ee Government.

NJ-2 Said form is mailed in a brown, official appearing envelope with a return address of “748 Washington Building, Washington 25, D.C.” Also enclosed is a return business reply envelope addressed to “Current Employment Records, 748 Washington Building, Washington 25, D.C.”

Each of these forms, stamped and addressed, is mailed in bulk to the respective return address, from where they are mailed to the addressees.

Tf any of the above forms are returned by the respective addressees they are mailed in bulk to the respondents without being opened. Through the use of the name “American Information Service” and the statement “Money will be sent to you if you will complete this questionnaire and return to this office within ten days” and by other words on the first form, respondents represent, directly or by implication, to those to whom the form is mailed that a substantial sum of money is being held for that person by the respondents. In truth Decision and Order 61 F.T.C.

and in fact, no substantial sum of money is being held by the respondents but instead respondents send to each person who returns the form the sum of 10¢.

From the use of the designation “Official Questionnaire” and by other words and by the general format of the second form, respondents represent, directly or by implication, to those to whom the form is mailed that the respondents are communicating with the addressee in some official capacity and that the information is required for official purposes. In truth and in fact, respondents are not acting in any official capacity but desire the information solely for the purpose of locating the person to whom it is addressed. By the form and wording on the third form, which promises a free gift, respondents represent, directly or by implication, that the return of the postal card will result in the receipt by the addressee of a valuable gift. In truth and in fact, the respondents have no valuable gift for the addressee but to everyone who returns the card the respondents send an inexpensive key chain. By the use of the name “Current Employment Records” and the words on the fourth form and the general format thereof, respondents represent that they desire the information requested for some official purpose. In truth and in fact, the respondents have no official or governmental capacity and desire the information solely for the purpose of locating the person to whom the form is addressed. The sole purpose of each of said forms is to locate delinquent debtors by subterfuge. This practice constitutes a scheme to mislead and conceal the purpose for which the information is sought. Therefore, the aforesaid statements and representations were, and are, false, misleading and deceptive.

Par. 5. The use, as hereinbefore set forth, of said forms has had, and now has, the tendency and capacity to mislead and deceive persons to whom said forms are sent into the erroneous and mistaken belief that said representations and implications are true and induce the recipients thereof to supply information which they otherwise would not have supplied.

Par. 6. The aforesaid acts and practices of the respondent as herein alleged, were, and are, all to the prejudice and injury of the public and constituted, and now constitute, unfair and deceptive acts and practices in commerce, in violation of Section 5 of the Federal Trade Commission Act.

Deoision AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with NATIONAL BUSINESS SERVICE, INC., ET AL. 889 883 Decision and Order 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 Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by 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 agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. Respondent, National Business Service, 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 208 Broad Street, in the city of Elizabeth, State of New Jersey.

Respondent Eli Levine is an officer of said corporation and his address is the same as that of said corporation. 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 is ordered, That National Business Service, Inc., a corporation, and its officers, and respondent Eli Levine, individually and as an officer of said corporation, and respondents’ agents, representatives and employees, directly or through any corporate or other device, in connection with the collection of, or attempting to collect, delinquent accounts in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from : 1. Using, or placing in the hands of others for use, any form, questionnaire or other material, printed or written, which does not clearly reveal that the purpose for which the information is requested is that of obtaining information concerning alleged delinquent debtors.

2. Representing, or placing in the hands of others, any means by which they may represent, directly or by implication, that money or a free gift or any other thing of value, is being held Complaint 61 FVT.C.

for the person from whom information is sought, unless respondents have in their possession a substantial sum of money or a gift of substantial value which will be sent to such person and then only when the exact sum of money or the exact nature of the gift or other thing of value is clearly and expressly disclosed and described.

3. Representing, or placing in hands of others any means by which they may represent, directly or by implication, that they have any official capacity or that any information requested is to be used for official purposes.

4, Using post cards, form letters or other material which represent, directly or by implication, that respondents’ business is other than that of collecting delinquent accounts for themselves and for others.

5. Using the name or appellation “American Information Service”, “Official Questionnaire”, “Mr. Q”, “Current Employment Records”, or any other name or names of similar import to describe or refer to respondents’ business or otherwise misrepresenting the purpose for which information is sought by respondents.

It is further ordered, That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.