Edward W. Putnam doing business as Blue Diamond Chinchillas

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Ix THE :YIATTER OF EDWARD W. PUTNAM DOING BUSINESS AS BLUE DIAMOND CHINCHILLAS CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-1167. ComplrLint, Feb. 1967-Decision, Peb. , 1967 Consent order requiring a Sioux City, Iowa, distributor of chinchila breeding stock to cease misrepresenting the quality and fecundity of their animals and profits to be made from home breeding of chinchilas. 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 Edward W. Putnam, an individual doing business as Blue Diamond Chinchillas, hereinafter referred to as respondent, has 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. Respondent Edward W. Putnam is an individual doing business under the name of Blue Diamond Chinchilas, with BLUE DIAMOND CHINCHILLAS 127 126 Complaint his principal offce and place of business located at 3406 Military Road, Sioux City, Iowa.

PAR. 2. Respondent is now, and for some time last past has been, engaged in ihe advertising, offering for sale, sale and distribution of chinchila breeding stock to the pubhc. PAR. 3. In the course and conduct of his business, respondent now causes, and for some time last past has caused, his said chinchillas, when sold to be shipped from his place of business in Iowa to purchasers thereof located in various other States of the United States, and maintains, ilnd at a1l times mentioned herein has maintained, a substantial course of trade in said chinchillas in commerce, as "commerce " is defined in the Federal Trade Commission Act.

PAR. 4. ln the course and conduct of his business, and for the purpose of inducing the sale of his chinchilas, the respondent has made numerous statements and representations in television and direct mail advertising, and through the oral statements and representations of salesmen to prospective purchasers with respect to the raising, breeding, pelting of chinchilas and the profits to be derived therefrom:

Typical and ilustrative, but not all inclusive, of the statements made in respondent's television and direct mail advertising and promotional literature, are the follo\ving: If you are a - - - Farm.er City D\veJ.er Suburbanite Chinchillas are a profitable hobby. They don t require a large area you can raise them right in your own home '" ,. " spare :room, b2.sement. Money in your pocket * * * providing you have the high quality such as Blue Diamond has to offer.

The female usually breeds at anywhere from 6 to 10 months of age. Gestation period is about 111 days, with litters averaging approximately 2 babies '" "' '" making 3 litters per year possible.- the average being approximately 2 litters when figured on national basis. Now, figuring on the conservative side of the national average rate of reproduction, one could have twenty pairs of chinchillas in three years starting with one adult pa.ir and on this same. basis a rancher coule! h&ve eighty pairs at the end of the three-year period by startir.g with four p&irs. On the basis of two litters per year and two babies per litter, and barring any unpredictable casualties, eighty pairs could give you an annual production of three hundred and twenty animals to l)e marketed at the proper time. (Starting) with four pairs it ,vculct take about 3 year;; time to be Eelfsupporting .-; * '" by self-supporting, I mean 88 000 to $10 000. Complaint 71 F. T.

Chinchilla ranchers are earning thousands of dollars each year in their spare time. Quality chinchila pelts on today s market bring $30 to $60 each. Quality is a must in tile chinchila business and we make every endeavor to start the new rancher with what we believe to be the best stock available. PAR. 5. Through the use of the above quoted statements and representations, and others of similar import and meaning, but not expressly set out herein, separately and in connection with oral statements and representations in direct sales presentations to prospective purchasers, respondent represents, and has represented, directly 01' by implication, that: (1) It is practicable to raise chinchilas in the home and large profits can be made in this manner.

(2) The breeding of chinchilas for profit requires no previous knowledge or experience.

(3) Chinchila breeding stock sold by respondent is of top quality, select quahty or the best grade that can be obtained. (4) :VIated pairs of chinchilas sold by respondent wil produce an average of t\vo or more litters per year with an average of at least two animals per litter, resulting in four or more live offspring per year.

(5) The national average production of female chinchillas is two litters per year with two 01' more offspring per litter. (6) Purchasers of respondent's mated pairs of chinchillas can expect them to multiply as follows:

One pair will increase to 20 mated pairs in three years and four pairs wil increase to 80 mated pairs in the same period of time.

Eighty mated pairs of chinchillas will produce 320 offspring per year.

(7) A1l offspring from breeding stock sold by respondent wil produce good quality pelts which will sell for at least $30 per pelt.

(8) Four mated pairs of respondent's breeding stock wil, in three years, produce an annual income of $8 000 to $10 000. (9) Breeding chinchillas by mated pairs produces more offspring of better quality than by using one male to breed several females, called polygamous breeding.

PAR. 6. In truth and fact:

(l) It is not practicable to raise chinchillas in the home and large profits cannot be made in such manner. (2) The successful breeding of chinchillas for profit requires BLUE DIAMOND CHINCHILLAS 129 126 Complaint knowledge in the feeding, care and breeding of said animals much of which must be acquired through actual experience. (3) Chinchila breeding stock offered and sold by respondent is not of select or top quality, or the best grade which can be obtained.

(4) Mated pairs of chinchilas sold by respondent will neither produce an average of two litters per year, nor an average of two animals per liter, nor four live offspring per year, but substantially less than that production.

(5) The national average production of female chinchilas is not two litters per year with two or more offspring per litter but substantially less than that production. (6) Purchasers of respondent's mated pairs of chinchilas wil not achieve the production of live offspring stated in Paragraph Five (6), above, since these figures do not allow for factors which substantially reduce chinchilla production, such as those born dead or which die after birth, cu1ls which are unfit for reproduction, fur chewers, sterile animals, and pairs which will not breed. (7) A1l offspring produced by breeding stock sold by respondent wil not produce good quality pelts, nor wil the pelts from said offspring sell for $30 or more per pelt but substantially less than that amount.

(8) Four pairs of breeding stock purchased from respondent will not in as much as three years produce an annual income of 000 but substantially less than that amount. (9) Breeding chinchilas by mated pairs does not produce more offspring or offspring of better quality than by the polygamous breeding method.

Therefore, the statements and representations as set forth in Paragraphs Four and Five hereof were and are false, misleading and deceptive.

PAR. 7. In the course and conduct of his business, at all times mentioned herein, respondent has been in substantial competition in commerce, with corporations, firms and individuals in the sale of chinchila breeding stock.

PAR. 8. The use by respondent of the aforesaid false, misleading and deceptive statements, representations and practices has had and now has, the tendency and capacity to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondent's chinchilas by reason of said erroneous and mistaken belief. PAR. 9. The aforesaid acts and practices of the respondent, as Decision and Order 71 F. 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 of competition in commerce and unfair and deceptive acts and practices in commerce, in violabon of Section 5 of the Federal Trade Commission Act. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of c€rtain acts and practices of therespondent named in the caption hereof, and the respondent having 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 char!;e respondent with violation of the Federal Trade Commission Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated as alleged in such complaint, and waivers and provisions as required by the Commission s rules; and The Commission having reason to believe that the respondent has violated the Federal Trade Commission Act, and having determined that complaint should issue stating its charges in that respect, hereby issues its complaint, accepts said agreement, makes the following jurisdictional findings, and enters the following order:

1. Respondent Edward W. Putnam is an individual doing business as Blue Diamond Chinchillas, with his principal offce and place of business located at 3406 Military Road, Sioux City, IO\'lu.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceediI1g is in the public interest.

ORDER It is ordered That respondent, Edward W. Putnam, an individual doing business as Blue Diamond Chinc:hillas, or under any other trade name, and respondent' s representatives, agents9.nd BLUE DIAMOND CHINCHILLAS 131 126 Decision and Order employees, directly. or through any corporate or other device, in connection with the advertising, ofiering for sale, sale or distribution of chinchilla breeding stock in commerce, as "commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or by implication: (1) That it is practicable to raise chinchillas in the home or that large profits can be made in this manner. (2) That breeding chinchilas for profit can be achieved \vithout previous knowledge or experience in the feeding, care and breeding of such animals.

(3) That chinchila breeding stock sold by respondent is of select or top quali ty or the best grade that can be obtained; or misrepresenting in any manner the quality of breeding stock sold by respondent.

(4) That mated pairs of chinchilas sold by respondent will produce each year an average of two or n10re litters of two animals pel' litter or will produce four live offspring per year; or representing, directly or by implication, that chinchillas purchased from respondent or the offspring of said chinchilas wil produce during a given period of time offspring in excess of the number usually and customarily produced by chinchillas sold by respondent or the offspring of said chinchillas; or misrepresenting the number of live chinchilla offspring resulting for any specified period of time. (5) That the national average production of female chinchillas is as much as two litters pel' year with two offspring per litter; or misrepresenting in any manner the number of offsjJing produced by female chinchillas generally. (6) That chinchila pelts produced from respondent' breeding stock will sell for any amount in excess of that usually and customarily received for pelts by other purchasers of respondent breeding stock; or misrepresenting in any manner the quality of pelts from the offspring of said animals. (7) That four mated pairs of chinchila breeding stock purchased from respondent will in three years result in annual income of as much as $8 000; or representing that the income derived from raising chinchillas is any amount in excess of the amount usually and customarily earned by breeders of chinchillas purchased from respondent. (8) That breeding chinchillas by mated pairs wil produce more 01' better quality offspring than by polygamous breeding.

Complaint 71 F.

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