C. F. Corporation D/B/A Sun Radio Discount Center

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IN THE :\1ATTEH OF F. CORPORA Tlo:: D/E/ A SUN RADIO DISCOUNT CEXTER ET AL.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATIO:- OF THE FEDERAL TRADE COMMISSIO:- ACT Docket C-1184. Complaint, Ma1" H67-Decision, Mat. , 1967 Consent order requiring a Washington, D. , apIJliancc dealer to cease using bait advertisements and misrepresenting used items as new. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it hy said Act, the Federal Trade Commission, having reason to believe that C. Corporation, a corponJtion doing business as Sun Radio Discount Center and Sun Radio Discount Warehouse, and William Warsaw Marcus Warsaw and Joseph :v. Warsaw, 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:

PARAGRAPH 1. Respondent C. F. Corporation is a corporation SUN RADIO DISCOUNT CENTER ET AL. 333 332 Complaint organized, existing and doing business under and by virtue of the laws of the State of Virginia with its principal offce located at 3300 Kenilworth A venue, Hyattsville, Maryland, and has places of business located at Bailey s Crossroads, Fairfax, Virginia, 120 IngTaham Street, NE. , Washington, D. , and 2321 University Boulevard West, Wheaton, Maryland.

William \Varsa\v, ;"larcus \Varsaw and Joseph 1\1. \\t'arsaw are offcers of the corporate respondent. They formulate, direct and control the acts and practices hereinafter set forth. Their business address is the same as that of the principal office of corporate respondent.

PAR. 2. Respondents are now, and for 801118 tim last past have been, engaged in the advertising, offering for sale, sale and distribution of elcctrical appliances and other merchandise at retail to the public.

PAR. 3. In the course and conduct of their business, respondents no\v cause, and for some time last past have caused, their said products, when sold, to be shipped from their places of business in the States of Virginia and Ylaryland and in the District of Columbia, to purchasers thereof located in various other States of the United States and in the District of Columbia, and maintain and at all times 111entioned herein have maintained a substantial course oJ trade in said products in commerce, as Ucommerce " is defined in thc Federal Trade Commission Act. PAR. 4. In the course and conduct of their aforesaid business and for the purpose of llducing the purchase of their products respondents have made numerous statements and representations in advertisements appearing in newspapers of general circulation respecting the character of their offer to sell and the merchandise included in such offer.

Typical and illustrative, but not all inclusive, of such statements and representations are the following:

Frigidaire 1 H. 6000 BTl: $144 RCA Victor 19-IX. PORTABLE TV tuner, carrying handle telescoping antenna built in $t12 purl CO 19-1N. l:HF PORTABLE TV. Exclusive Cool Chassis Df'si 2:, easy ca1'ying handle, telescoping built-in antenna $112 \VESTINGHOUSE 19-IN. PORT ABLE TV. Front contl'ois and front sound; carrying handle, built-in telescoping antenna. $99 GE 9", Transistorizf'd TV Set S117. Complaint 7t F.

PAR. 5. By and through the use of the above quoted statements and representations, and others of similar import and meaning, but not specifically set out herein, the respondents have represented, directly or by implication, that they are making a bona fide of IeI' to sell the advertised merchandise at the prices and on the terms and conditions specified in the advertisements. PAR. 6. In truth and in fact, respondents' offers are not bona fide offers to sell the said merchandise at the aforesaid advertised prices and on the terms and conditions therein stated but are made for the purpose of obtaining leads and information as to persons interested in purchasing respondents' products, and members of the purchasing public who appear at respondents' places of business, in response to said advertisements are discouraged from purchasing the advertised articles of merchandise, and attempts are made to sell them higher priced products. Said members of the purchasing public are also advised, in many cases, that the advertised items were in limited supply and are no longer available.

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

PAR. 7. In the course and conduct of their aforcsaid business, and for the purpose of inducing the purchase of their articles of merchandise, respondents represent and have represented directly or by implication, in oral sales solicitations made by their representatives or salesmen that articles of merchandise being offered for sale by them are new.

PAR. 8. In truth and in hct, many of the articles of merchandise which respondents sell are floor samples, used for demonstration purposes, as a result of which they are used, abused and damaged, and therefore not new merchandise when sold to the public.

PAR. 9. In the conduct of their business at all times mentioned herein, respondents have been in substantial competition, in commerce, with corporations, firms and individuals in the sale of articles of merchandise of the same general kind and nature as those sold by respondents.

PAR. 10. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and no\v has the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true SI:N RADIO DISCOlJNT CENTER ET AL. 335 332 Decision and Order and into the purchase of substantial quantities of respondents products by reason of said erroneous and mistaken belief. PAR. 11. The aforesaid acts and practices of respondents, as herein alleged, 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, and unfair and decepbve acts and practices in commerce, in violation of Section 5 of the Federal Trade Commission Act.

DECISION A D ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with 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 C. F. Corporation is a corporation organized existing and doing business under and by virtue of the laws of the State of Virginia, with its principal offce located at 3300 Kenilworth A venue, Hyattsvile, Maryland, and has places of business located at Bailey s Crossroads, Fairfax, Virginia, 120 Ingraham Street, !\E. , Washington, D. , and 2321 University Boulevard West, Wheaton, Maryland. Respondent C. F. Corporation does business as Sun Radio Discount Center and Sun Radio Discount Warehouse.

Respondents William Warsaw, Marcus Warsaw and Joseph lvi. Warsaw are offcers of the corporate respondent and their address is the same as that of the principal offce of the corporate respondent.

2. The Federal Trade Commission has jurisdiction of the sub- 336 FEDERAL TRADE COMMISSION DECISIO;\S Decision and Order 71 F. ject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It ':8 ordered That respondents C. F. Corporation, a corporation, and its offcers, and vVilliam \Varsaw, lVIarcus \Varsaw and Joseph 1\. Warsaw, individually and as offcers of said corporation, and respondents ' agents, representatives and employees in connectiondirectly or through any corporate or other device, with the advertising, offering for sale, sale or distribution of electrical appliances, or any other products, in commerce, as commerce" is defined in the Federal Trade Commission Act forthwith cease and desist from:

1. Using, in any manner, a sales plan, scheme or device wherein false, misleading or deceptive statements or representations are made in order to obtain leads or prospects for the sale of merchandise.

2. :'laking representations purporting to offer ll1erchandise for sale when the purpose of the representation is not to sell the offered merchandise but to obtain leads or prospects for the sale of other merchandise at higher prices. 3. Discouraging the purchase of, 01' disparaging, any merchandise which is advertised.

1. Representing, direc:ly or by implication, that any n1erchandise is offered for sale 'when such offer is not a bona fide offer to sell such merchandise.

5. Advertising any item of merchandise for sale, which is not available at all stores in suffciently substantial quantities , hou- to meet reasonably anticipated demands: Pro')ided ever That items available only in limited supply may be advertised, if such advertising clearly and conspicuously discloses the number of units available and at which store. 6. Representing as new, articles of merchandise which have been used for demonstration purposes or used in any other manner; or advertising or offering for sale any such article, unless a clear and conspicuous disclosure is made in the advertising in immediate conj function with any such advcrtised item, and on the item itself, that it has been so used. It is hathe,. 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. SUSAN THOMAS , INC. 337 Complaint