Seacrest Industries Corporation

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IN THE l\fA TTER OF SK\CREST INDUSTRIES CORPORATION ET AL.

COX8I:XT ORDER , ETC. : IN REGARD TO THE ALLEGED VIOLATION OF FEDERAL TIL.\DE C01\n.nSSION ACT Docket 0-"/19. Complaint, Feb. 28, 1964-Decision, Feb. 28, 196.4 Consf:nt order requiring Yonkers. N. , sellers of freezers, food and freezer. food plans through four wholly owned subsidiary corporations, to cease making various false representations in brochures, circulars and otherwise, concerning purported savings, professional assistance afforded pur. chasers of their products, guarantees, terms of sale and other false claims. CO)rPLAI:NT 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 Seacrest Industries Corpcrat"io111 a corporation, and Engene Lissauer, ",Villiam Lissauer and Sol FcIdman, indiyiduaJJy and as offcers of said corporation and Sidney Lissauer and 'iValter S. Blazer, inc1ividua.Is hereinafter reff'rrecl t.o as responclents hav€', violated the provisions of said Act and .it appearing to the Commission that a, proceeding by it in respect t11ereof "\Tou1d be in the public interest, hereby issues its complaint stating 110: charges in that respect as folJo1Vs: PARAGR-\PH 1. Respondent Seacrest Industries Corporation is a corporation organized, existing and doing business under and by 1280 FEDERAL TRADE C01DlISSION DECISIONS Complaint 64 F T.

virtue of the laws of thc State of Delaware with its principal offec and place of business located at 6 Xavier Drive, in the city of Yonkcrs, State of New York.

R.respondents Eugene Lissauer, 1iVilliam Lissaucl' and Sol Feldmml are offcers of said corporation. They formulate, direct and control the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent Seacrest Industries Corporation. Sidney Lissauer and 'Walter S. Blazcr are indi,'idllals who 1"\1'ticipate in the management, direction and control of the. corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent SCtlcrest Industries Corporation.

PAR. 2. The respondents are now, and for some 6mB last p:1st have been, engaged in the advertising, offering for saJe sale J. ncl distribution of freezers, food and freezer. food plans through the hI. lowing whollyowned suhsidiary corporations: Serv.Well Foods Inc., :\t. Vernon, New York. Bonded Food Service Corp., Yonkers, New Yark. Franklin Foods Corporation, Yonkers \Te,w Yark. Franklin Sales Corporation, Yonkers, Ne,y York. PAR. 3. In the course and conduct of their business, respondents directly and through the a,aforementioned subsidiary corporatlDns cause freezers, when sold, to be shipped by the ma.nufacturer from its plant or warehouse located in the State of ),Tew York to PUl'chasers thereof, located in ,'arious other States of the cnited Sto tes: and CRuse food when sold to be shipped from warehouses located. in the State of New York, to purchasers thereof located in yar!()I1 other States of the United States. Respondents mainta,in and at an times mentioned herein have maintained a substantial course. of trade in said freezers and food in commerce as "commerce" is defied in the Federal Trade Commission Act. PAR. 4. In the course and conduct of their business, at an ti lies mentioned herein, respondents have been in substantial competition in commerce, with corporations, firms and individuals in the, 8:11e of freezers, food and freezer. food plans. PAR. 5. In the course a.nd conduct of their business, respondenrs have disseminated, and caused the dissemination of, certain advert. ments concerning the said food and freezer- food plan by the United States mails and by various means in commerce as "commerce:: is defined in the Federal Trade Commission Act: including but not limiter1 to brochures and circulars, for the purpose of inducing, and which were likely to induce the purohase of food, as the tenn "food" is SEACREST INDUSTRIES CORPORATION ET AL. 128J 1279 Complaint defined in the Federal Trade Commission Act; and have dissemilutcd and caused the dissemination of advertisements by various means including those aforesaid, for the purpose of inducing and which "ere likely to induce, directly or indirectly, the purchase of food and freezers in commerce, as "comlnerce" is defined in the Federal Trade Commission Act.

PAR. 6. By me,fills of advertisements disseminated, as afore,.aid and by the oral statements of respondents' salesmen, representatives and agents, respondents have represented directly or by inlplieation: 1. That purchasers of their freezer-food plan can purchase their food requirements and a freezer for the same or less money than they have been paying for food alone;

2. That purchasers of respondents' freezer- food phm will save e.enough money on the purchase of their food to PRY for the freezer; 3. That the initial food order supplied by the respondents will Jast the purchaser four months;

4. That "home economists" will assist purchasers of t.he aforesaid freezer-food plan in planning their food orders; 5. That the free,zer and the food are funy and uncondit.innally guaranteed or insured under the contract; 6. That purchasers of the aforesaid freezer-food plan make one monthly payment which covers both food and freezer; 7. That any money paid by purchasers for freezers or freezel'food plan will be refunded if they are not satisfied. PAR. 7. In truth and in fact:

1. Purchasers of the aforesaid freezer-food plan do not recpin freezer and their food requirements for the same or less money than they had been paying for food alone.

2. Purchasers of respondents' freezer-food plan do not 5i1Ve enough money on the purchase of their food to pay for the freezer. 3. The initial food order supplied by respondents is not suffcient to last purchasers four months.

4. The individuals sent to help purchasers of the a.foresaid freezerfood plan in planning food orders arc not "home ccollomists . They have not had suffcient or proper tra.ining to warrant calling t.hem home economists 5. The freezer and the food are not fully or unconditionally gnaranteed or insured under the contract.

6. Purchasers of the afores Lic1 freeze, food1 plan are required to make L,vo monthly payments, one for food and one for the freezer. 7. Purchasers of the freezer or the freezer-food plan do Ili)t receive a refund of their money if they are not satisfied. Therefore, the advertisements referred to in Paragraph Five \Tele and are, misleading in material respects and constituted, and now , 1282 EDERAL THADF CO nHSSIOX DECISIO Deti'-inn R1Hl O1'd,('1' 61 F. cOIFtitnte false advertisements " a,s that term is defined in the Federal Trade COlllll1ission Act, and the statements and representations referred to in Paragraph Six \fere, and nmy are, false, mi ll'ading and deceptive.

.lR. 8. The use by respondents of the aforesaid false misleading and deceptive statelUent5, representations and practices has had, and now has, the capacity and tendency to 111mislead members of the purchasing public into the erroneous and mista.ken belief that said statements and representations were and are true and into the purchase of 5\1 bstantial quantities of freezers, food and rreezer-food plans from the respondents by reason of said erroneous and mistaken belief.

PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, including the dissemination hy respondents of false advertise.ments as aforesaid, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce, in violation of ecrions 5 and 12 or Sllid Act.

DECISION AND ORDER Fte Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents ha.ving been furnished thereafter ,with a copy of a draft of complaint which the Bureau of Deceptive Practices proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation or the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereaftr exeented an agreement conta.ining a consent order, n-ll admit.ssion by the respondents of all thc jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is ror settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such con:plaint, and waivers and provisions as required by the C0n11nission s rules; and The. Commission, having reason to believe that the respondents h",, violated the Federal Trade Commission Act, and having determjned that complaint should issue stating its charges in that respect, hereby issues its complaint, accepts said agreement, makes the following jurisdictional findings "nd enters the following order: 1. Seacrest Industries Corpora6on is a corporation organized, existing and doing business under Rud by virtue of the laws of the , \ SEACRES1' I:\Dl'STHIES COHl:OHA'IIOX ET AL. 1283 127D Order State of Dcla,,'are, with its offcc and principal place of bll iness located at 6 Xavier Drive, Yonkers, liew York, Eugene Lissa-uer Tilliam Lissauer and Sol Feldman are individuals and offcers of the corporate respondent and their address is the same as that of said corporation.

Sidney Lissauer and ,Yalt.cr S. Blfzer are individuals and their address is the same as that of said corporation. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proccpc1ing and of t.he l':spondents, u.nd the ))1'0ceeding is in the public interest.

ORDER PART I It is ordered That respondents Se lcrest Industries Corporation a corporation, and its oilicers, and Eugene Lissauer, ,Villiam Lissauer and Sol Feldman, individually and as offcers of said corporation, and Sidney Lissauer ancl1Valter S. Blazer, individuals, illlcll'(,span dents' agents, representatives and employees, directly or through any corporate oJ. other dedce, in connection \\'ith the offering for sale: sale or distribution of freezers, iood or freezer-food plans in commerce as "commerce" is defined in the Federal Trade Commission Act: do IOlthwith cease and desist from:

1. Hepresenting, directly 01' by implication that: (a) Purchasers of a freezer- food phtn will reoci ,'e the same or any amount of food and a freezer for the same or less money than they have been paying for food alone: (b) Purchasers of a. freezer-food plan will save enough money on the purchase of their food to pay for the fre.ezer; (0) Fooe! ordered by purchasers ",ill be suffcient to last such purchasers any stated or specified period of time; (d) A "home economist" or other formally trainee! individual will assist purchasers or the aforesaid freezer-food plan in planning their food orc1e.r (e) A_ny freezer, or any part thereof, or any food is guaranteed or insured in any ma.nner, unless the nature. ancl extent of the guanultee or insurance and the manner in ,,-which the guarantor or insuror will perform thereunder, are c1e;truly and conspicuously disclosed in immediate conjunction ,,-ith any such representation;

(f) Purchasers of their freezer-food plan make lmt one monthly payment covering the food and the freezer; SyllalJus 64 Ji' (g) .\loney paid by purchasers for a freezer or a freezerfood plan will be refunded if they are not satisfied. 2. Misrepresenting in any manner the savings realized by purehasers of a free.zer-food plan, freezer, or food. PART II It is fwrther OJ-dered That respondents Seacrest Industries Corporation, a corporation, and its offcers, and Eugene Lissauer, vVilliam Lissauer and Sol Feldman, individually and as offcers of said corporation and Sidney Lissauer and Walter S. Blazer, individuals and respondents' agents representatives and employees, diredly or through any corporate or other device, in connection with the offering for sale, sale or distribution of any food or any purchasing plan involving food, do forthwith cease and desist from: 1. Disseminating or causing to be disseminated any advertisement by means of t.he United States mails or by any means in commerce, as "commerce" is defined in the Federal Trade Commission Act, which advert.isement contains n11Y of the representations or misrepresentations prohibit.ed in Paragraphs 1 a.nd 2 of PART I of this Order.

2. Disseminating, or causing the dissemination of any advertisement, by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of any food, or any purchasing plan involving food in COmJllerCC, as commerce" is defined in the Federal Trade Commission Act which advertisement contains any of tl1c representatiolls or misrepresentations prohibited in Paragraph 1 and 2 of PART I of this Order.

1 t ';8 flwthe1' 01'de"Nl That the respondents herein sha.ll. "\within sixty (60) days after service upon them of this order, file with the Commiesion a report in "'Titing setting forth in detail the D1anner and form in which they lut'i-e complied with this order.