West Coast Claim Adjusters

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In tue Matrer or WEST COAST CLAIM ADJUSTERS ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-901. Coniplaint, June 1, 1965—Deeision, June 1, 1965 Consent order requiring a Los Angeles, Calif., corporation engaged in the: business of purchasing waterless cookware, tools, radios, jewelry, watches, and other merchandise from manufacturers and suppliers and selling such merchandise at retail for their own account, to cease using the term “Claim Adjuster” as part of their corporate name, thereby misrepresenting: that they are liquidators or authorized adjusters engaged in the sale of distress merchandise for the purpose of settling claims, and falsely representing the guarantee on certain watches. 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 West Coast Claim Adjusters, a corporation, and Alan Grahm, Sam Stone and Ruth (zrahm, individually and as officers 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: Paracrarn 1. Respondent, West Coast Claim Adjusters, is a corporation organized, existing and doing business under and by virtue of the laws of the State of California with its principal office and place of business located at 5176 Santa Monica Boulevard in the city of Los Angeles, State of California. Respondents Alan Grahm, Sam Stone and Ruth Grahm are officers of said corporation. They formulate, direct and control the acts and practices of said corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporation.

Par. 2. Respondents are now, and for some time last past have been, engaged in the advertising, sale and distribution of waterless cookware, tools, radios, jewelry, watches, and other articles of merchandise to members of the purchasing public. Par. 8. In the course and conduct of their business respondents now cause and for some time last past have caused, their products, when sold, to be shipped from their place of business in the State of California to purchasers thereof located in various other States of WEST COAST CLAIM ADJUSTERS ET AL. 975 974 Complaint the United States and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, as “commerce” is defined in the Federal Trade Commiission Act.

Par. 4, In the conduct of their business and at all times mentioned herein, respondents have been in substantial competition in commerce with corporations, firms and individuals engaged in the sale of waterless cookware, tools, watches, radios, and other articles of merchandise of the same general kind and nature as that sold by respondents. Pan. 5. In the course and conduct of their business, and for the purpose of inducing the purchase of their merchandise, respondents through the use of their trade name West Coast Claim Adjusters and in circulars and promotional material sent to prospective purchasers, make numerous statements respecting their trade status, the nature of their business, the source of their merchandise and the nature and extent of their guarantee. , ;

Among and typical, but not all inclusive, of the statements and ‘representations appearing in said advertisements are the following: WEST COAST CLAIM ADJUSTERS 5176 Santa Monica Blyd. Los Angeles 29, California a ax . ue oe ae a Gentlemen: .

We have just been notified that.our company has been selected to liquidate 380 sets of fine Winfield China * * *. :

% % * 1% Bo ES ws PLEASE REFER T0 ABOVE CLAIM NUMBERS WHEN ORDERING at xt s tk . Xk Me: a GRUEN, HELBROS AND WALTHAM WATCH LIQUIDATION -W54-7 Bo me a a * * * This entire lot of watches is being offered on a no limit—no reserve basis. All orders will be processed on the priority system, until supply is exhausted.

% Pa * a * * TOOL LIQUIDATION NO. SSW-45-65 PUBLIC NOTICE ;

| i You are hereby notified that the recorded lot numbers in this bulletin are now being released as a public offering.

* * * * * Eo * West Coast Claim Adjusters (Liquidating Dept.) * * Ed * * * * Complaint 67 FT.C.

LIFETIME GUARANTEE LIFETIME FACTORY GUARANTEE a # * Py * * * Par. 6. By and through the use of the statements and representations set forth in Paragraph Five hereof and others of similar import not specifically set forth herein, respondents represent, and have represented, directly or by implication:

1. Through the use of the name “West Coast Claim Adjusters,” separately or in conjunction with the foregoing statements and representations or by said statements and representations alone that they are liquidators, authorized adjusters or agents engaged in the sale of hankrupt, estate, distrained or other distress or surplus merchandise for the purpose of liquidating, adjusting, paying off or otherwise settling indebtedness or claims.

2. That certain of the Waltham wrist watches offered for sale are unconditionally guaranteed for the lifetime of the purchaser. Par. 7. In truth and in fact:

1. Respondents are not liquidators, authorized adjusters or agents engaged in the sale or disposition of bankrupt, estate, distrained or other distress or surplus merchandise for the purpose of liquidating, adjusting, paying off or otherwise settling indebtedness or claims. Instead, respondents are engaged in the business of purchasing the advertised merchandise from manufacturers or suppliers and selling it at retail for their own account to the purchasing public. 2. The aforestated watches are not guaranteed for the lifetime of the purchaser, but only for the useful life of the watch and said enarantee is not unconditional but is subject to limitations and conditions which are not set. forth in respondents’ advertising of said guarantee.

Therefore, the statements and representations referred to in Paragraphs Five and Six hereof were and are false, misleading and deceptive.

Par. 8. The use by respondents of the aforesaid false, 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 that such statements and representations were and are true and into the purchase of substantial quantities of respondents’ products by reason of said erroneous and mistaken belief.

Par. 9. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public WEST COAST CLAIM ADJUSTERS ET AL. 977 974 Decision and Order 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 Section’5 of the Federal Trade C ission A Hederal Lrace Commission Act.

DEcISIOoN AND ORDER The Commission having heretofore determined to issue its complaint charging certain of the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and such 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 named in the caption hereof 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 West Coast Claim Adjusters is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its office and principal place of business located at 5176 Santa Monica Boulevard in the city of Los Angeles, State of California.

Respondents Alan Grahm, Sam Stone and Ruth Grahm are officers of said corporation, and their 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 respondents West Coast Claim Adjusters. a corporation, and its officers, and Alan Grahm, Sam Stone and Ruth Grahm, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, Syllabus iT IVT.C, sale or distribution of waterless cookware, tools, radios, jewelry, watches, or any other articles of merchandise in commerce, as “ecommerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using the term “claim adjusters” or any other word, or words of similar import or meaning, in or as a part of respondents’ trade or corporate name, or otherwise representing, directly or by implication, that they are liquidators, authorized adjusters or agents engaged in the sale or disposition of bankrupt, estate, salvage, distrained or other distress or surplus merchandise for the purpose of liquidating, adjusting, paying off or otherwise settling indebtedness or claims; or misrepresenting, in any manner, their trade or business status or the source, character or nature of the merchandise being offered for sale. © 2. Representing, directly or by implication, that any of respondents’ products are guaranteed unless the nature and extent of the guarantee, the identity of the guarantor, and the manner in which the guarantor will perform thereunder are clearly and conspicuously disclosed.

3. Using the word “Lifetime” or anv other word or words of similar meaning which relate to any life other than that of the purchaser or original user in reference to the duration of an advertised guarantee unless the “life” referred to is clearly and conspicuously disclosed in said advertisement; or misrepresenting in any manner the duration of a guarantee. 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.