William H. Rorer, Inc.

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

IN THE MATTER OF WILLIAM H. RORER, INC.

MODIFIED ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (a) OF THE CLAYTON ACT Docket 85.99. Complaint, Sept. 30, 1963 Decision Aug. 21, 1967 Order modifying a cease and desist order issued )Tay 9 , 1966, 69 F. C. 667 pursuant to a decision of the U. S. Court of Appeals, Second Circuit, 374 F. 2d 622 , March 1967 (8 S. & D. 432), by limiting the application of the prohibition against price discrimination in pharmaceutical products to competing retail customers.

ORDER MODIFYIKG ORDER TO CEASE AND DESIST Respondent having filed in the United States Court of Appeals for the Second Circuit a petition to review and set aside the order to cease and desist issued herein on May 9, 1966 (69 F. C. 667) ; and the court on March 20, 1967 (8 S. & D. 432), having issued its opinion and on April 17, 1967, having entered its final decree modifying and, as modified, affrming and enforcing said order to cease and desist; and the time allowed for filing a petition for certiorari having expired and no such petition having been fied; N ow therefore, it is hereby ordered That the aforesaid order of the Commission to cease and desist be, and it hereby is, modified in accordance with the said final decree of the court of appeals to read as follows:

It is ordered That respondent William H. Rorer, Inc. , a corporation, and its offcers, representatives, agents and employees, directly, indirectly, or through any corporate or other device, in or in connection with the sale of prescription and nonprescription pharmaceutical products in commerce, as commerce" is defined in the amended Clayton Act, do forthwith cease and desist from discriminating, directly or indirectly, in the price of such products of like grade and quality by selling to some retailers at prices higher than the price charged to any other retailer who, in fact, competes in the resale and distribution of respondent' s products with the retailer paying the higher prices.

It is further ordered That, in addition to an apart from the provisions of the preceding paragraph, if respondent at any time after the effective date of this order institutes a price schedule whereby it charges a different price for its products to any person, group or class of its competing retail customers TRACER RESERVE FUND 413 412 Complaint on the basis or in the belief that such difference in price is justified by savings to the respondent in the cost of manufacture, sale or delivery to the members of such customer group or class, respondent shall (a) promptly notify the Federal Trade Commission of the institution of such price schedules and submit to the Commission a written statement with necessary underlying data in support of the cost justification of such price discrimination; and (b) adequately and regularly publicize to aU retail customers that prices to some are higher than to others, together with reasons and details of the price differences or discounts.

It is further ordered That the respondent herein shall, within , filesixty (60) days after service upon it of this modified order in detailwith the Commission a report, in writing, setting forth the manner and form in which it has complied with this order. 1 N THE :vA TTER OF MICHAEL J. MILLER ET AL. TRADING AS TRACER RESERVE FUND ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 8724. Complaint, Dec. 966-Vecision, Aug. , 1967 Order requiring a St. Louis, Missouri, operator of a debt collection business and his wife to cease misrepresenting the purpose of respondents' business, that any money or any other thing of value is being held for de. linquent debtors, using any form which docs not reveal true intent of asking for information, and misrepresenting that respondents maintain a Chicago offce.

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 Michael J. Miler and Ida Miler, his wife, individuals trading and doing business as Tracer Reserve Fund, 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: 414 FEDERAL TRADE COMMISSIOJ\ DECISIONS Complaint 72 F.

PARAGRAPH 1. Respondents Michael J. Miler and Ida :viler, his wife, are individuals trading and doing business under the name of Tracer Reserve Fund, with their offce and principal place of business located at 4 X orth Eighth Street, St. Louis, :vissouri. They formulate, control and direct the policies, acts and practices hereinafter set forth.

PAR. 2. In the course and conduct of their business, respondents are now, and for some time last past have been, receiving accounts for collection, and requests for the location of alleged delinquent debtors from persons, firms, and businesses, located both in and outside the State of Missouri.

PAR. 3. Respondents are now, and for some time last past have been, engaged in the business of preparing and transmitting through the mails, a printed form and other material for use in locating alleged delinquent debtors. Respondents cause said printed form and other material including letters, checks, and documents to be transported from their place of business in the State of Missouri to a mailing address located at 2349 West Devon Chicago, Ilinois, from which address, said form and other material are mailed to addressees located in the various States of the United States. Respondents maintain, and at all times herein mentioned have maintained, a substantial course of trade 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 address place of employment, social security number and other pertinent information as to persons whose alleged delinquent accounts the respondents are seeking to collect. For this purpose respondents use, and have used, a certain printed form. The form is designated "Tracer Reserve Fund" and consists of a single sheet of paper with printing thereon, by which recipient is told that "we are holding a small sum of money for you, upon the return of this form, and the information proves it is correct, we will send this money to you.

The form letter then sets out questions which, if answered, provide information considered to be of value, in the collection of accounts owed or alleged to be owed by the addressee, or in the location of witnesses. These printed forms are mailed under separate cover to a secretarial service mail drop, located in Chicago, Ilinois, at 2349 W. Devon A venue, from where they are then mailed out to the addressee. When replies are received by this , ,, , , . ,,,, , TRACER RESERVE FUND 415 413 Complaint secretarial service man drop, at 2349 W. Devon Avenue, Chicago Ilinois, they are then mailed in a separate cover to respondents at 1252 Mt. Olive Street, University City, Missouri. PAR. 5. Through use of the mail address at 2349 W. Devon A venue, Chicago, Ilinois, respondents represent, directly ordrop implication, to addressees to whom the forms are mailed, that business offces are maintained in the city of Chicago, Ilinois. PAR. 6. The aforesaid representations and implications, that respondents maintain business offces in the city of Chicago Ilinois, are false, misleading and deceptive. In truth and in fact respondents do not maintain business offces in the city of Chicago Ilinois, or in any place other than University City, Missouri. Said man drop address is used to mislead persons, to whom form is sent, and to conceal respondents' correct business address. The respondents check the returned forms for information, and then relay the pertinent information to the requesting party or parties.

Said form is designed to be forwarded to addressee in envelopes provided by respondents, in which is enclosed a return envelope addressed to "Tracer Reserve Fund, 2349 W. Devon Avenue Chicago (45), Ilinois.

PAR. 7. The printed form used by respondents is as follows: Tracer Reserve Fund 2349 W. Devon Chicago (45), 111.

No.

If you are the right person, '\ve are holding a small sum of money for you. Upon return of this form, and the information proves it is correct, we wm send this money to you.

Inclosed you will find a stamped envelope for your reply. We tried to locate you at this address:

HUSBAND' S NAME - - EMPLOYED BY, - ADDRESS _.,--- DEPT. - SOCIAL SEC. ,,0. - WHERE YOU LIVED PREVIOUSLY - PHONE NO. -- --- WIFE' S :\AME - - EMPLOYED BY _ ADDRESS DEPT. SOCIAL SEC. NO. - REFEREXCE . ADDRESS - PHONE NO. - REFERENCE - - ADDRESS - - PHO E NO. , Please fill out correctly and return to us \within Five (5) days. Complaint 72 F.

THIS INFORMATION MUST BE PRINTED. IT IS IMPORTANT THAT WE HAVE THIS INFORMATION CORRECT IN ORDER THAT WE CAN DELIVER THIS CHECK TO THE RIGHT PERSON, WITHOUT DELAY. Signed Dated PAR. 8. Through the use of the name " Tracer Reserve Fund, and the statement, "If you are the right person, we are holding a small sum of money for you. Upon the return of this form, and the information proves it is correct, we wi1 send this money to you," and by other words on the said form, respondents represent directly or by implication, to those to whom the form is mailed that respondent has been named as a depository of a reasonably substantial sum of money to be delivered to the recipients of said form upon proper identification and by furnishing aU of the requested information.

PAR. 9. In truth and in fact, respondents are not engaged in any fiduciary or other capacity to receive money for the persons to whom the forms are sent, and the only money sent them is in the sum of twenty-five cents via respondents' check. Respondents use this form to seek the information solely for the purpose of locating alleged 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 set forth in Paragraphs Seven and Eight were, and are, false, misleading and deceptive.

PAR. 10. The use, as hereinabove set forth, of said form has had, and now has, the tendency and capacity to mislead and deceive persons to whom said form is sent into the erroneous and mistaken belief that the said representations and implications are true and to induce the recipients thereof to supply information which they otherwise would not have supplied.

PAR. 11. The aforesaid acts and practices of respondents, as herein aUeged 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.

Mr. J. Leon William, and M1. Alan M. Sill1e1'geld for the Commission.

M,' . Michael J. Mille?' 711'0 se, TRACER RESERVE FUND 417 413 Initial Decjsion INITIAL DECISION BY RAYMOND J. LYKCH, HEARING EXAMINER JULY 7, 1967 STATEMEKT OF PROCEEDINGS The Federal Trade Commission issued its complaint against the above-named respondents on December 27, 1966, a1Ieging that the respondents engaged in unfair methods of competition and unfair and deceptive acts and practices in violation of Section 5 of the Federal Trade Commission Act. More specifica1Iy, the respondents were charged with using false and deceptive forms for the purpose of collecting delinquent accounts. A copy of the complaint was served upon the respondents, who filed an admission answer waiving the right to a hearing and consenting to the issuance of the order attached to the complaint. Based upon the entire record consisting of the complaint, the respondents' admission answer and other matters of record, the hearing examiner makes the following findings of fact, conclusions drawn therefrom and issues the following order:

FINDINGS OF FACT 1. Respondents Michael J. Miler and Ida Miler, his wife, are individuals trading and doing business under the name of Tracer Reserve Fund, with their offce and principal place of business located at 4 North Eighth Street, St. Louis, Missouri. They formulate, control and direct the policies, acts and practices hereinafter set forth.

2. In the course and conduct of their business, respondents are now, and for some time last past have been, receiving accounts for co1Iection, and requests for the location of alleged delinquent debtors from persons, firms, and businesses, located both in and outside the State of Missouri.

3. Respondents are now, and for some time last past have been engaged in the business of preparing and transmitting through the mails, a printed form and other material for use in locating alleged delinquent debtors. Respondents cause said printed form and other material including letters, checks, and documents to be transported from their place of business in the State of Missouri to a mailing address located at 2349 West Devon, Chicago, Ilinois from which address, said form and other material are mailed to . Respondents' answer wa1; filed MIIY 23 , 1967 , the date th" matter was set for hearing in St. Louis, :Missouri. During the course of II prehearing conference held by tnOO undersigned examiner prior to the opening of II formal hearing, respondents joir,t:y executed their admission answer to the complaint.

Initial Decision 72 F.

addressees located in the various States of the United States. Respondents maintain, and at all times herein mentioned have maintained, a substantial course of trade in commerce, as "commerce" is defined in the Federal Trade Commission Act. 4. In the course and conduct of their business, respondents frequently desire to obtain information as to the current address place of employment, social security number and other pertinent information as to persons whose alleged delinquent accounts the respondents are seeking to collect. For this purpose respondents use, and have used, a certain printed form. The form is designated "Tracer Reserve Fund" and consists of a single sheet of paper with printing thereon, by which recipient is told that "we are holding a small sum of money for you. Upon the return of this form, and the information proves it is correct, we wjJ send this money to you.

The form letter then sets out questions which, if answered provide information considered to be of value, in the collection of accounts owed or alleged to be owed by the addressee, or in the location of witnesses. These printed forms are mailed under separate cover to a secretarial service mail drop, located in Chicago, Ilinois, at 2349 W. Devon Avenue, from where they are then mailed out to the addressee. When replies are received by this secretarial service mail at 2349 W. Devon Avenue, Chicago Ilinois, they are then mailed in a separate cover to respondents atdrop, 1252 Mt. Olive Street, University City, Missouri. 5. Through use of the mail address at 2349 W. Devon Avenue, Chicago, Ilinois, respondents represent, directly or bydrop implication, to addressees to whom the forms are mailed, that business offces are maintained in the city of Chicago, Ilinois. 6. .The aforesaid representations and implications, that respondents maintain business offces in the city of Chicago, Ilinois, are false, misleading and deceptive. In truth and in fact, respondents do not maintain business offces in the city of Chicago Ilinois, or in any place other than University City, :l1missouri, Said mail drop address is used to mislead persons, to whom form is sent, and to conceal respondents' correct business address. The respondents check the returned forms for information, and then relay the pertinent information to the requesting party or parties.

Said form is designed to be forwarded to addressees in envelopes provided by respondents, in which is enclosed a return envelope addressed to "Tracer Reserve Fund, 2349 W. Devon Avenue Chicago (45), Ilinois.

, TRACER RESERVE FUND 419 413 Initial Decision 7. The printed form used by respondents is as follows: Tracer Reserve Fund 2349 W. Devon Chicago (45), Ill.

No.

If you are the right person, we are holding a small sum of money for you. Upon return of this form, and the information proves it is correct, we will send this money to you.

Inclosed you wil find a stamped envelope for your reply. We tried to locate you at this address:

HUSBAND' S NAME - EMPLOYED BY ADDRESS -- SOCIAL SEC. NO. -WHEREDEPT.YOU LIVED PREVIOUSLY - PHONE NO. EMPLOYED BY ---WIFE'S NAMEADDRESS SOCIAL SEC. NO. ,DEPT.REFERENCE -- ADDRESS - PHONE XO- REFERENCE PHONE NO. ADDRESS Please fill out correctly and return to us within Five (5) days. THIS I:-FORMATION MUST BE PRIXTED. IT IS IMPORTANT THAT WE HAVE THIS IXFORMA TION CORRECT IN ORDER THA T WE CAN DELIVER THIS CHECK TO THE RIGHT PERSON. WITHOUT DELAY. Signed Dated 8. Through the use of the name " Tracer Reserve Fund, " and the statement If you are the right person, we are holding a small sum of money for you. Upon the return of this form, and the information proves it is correct, we wi1 send this money to you and by other words on the said form, respondents represent directly or by implication, to those to whom the form is mailed that respondents have been named as a depository of a reasonably substantial sum of money to be delivered to the recipients of said form upon proper identification and by furnishing all of the requested information.

9. In truth and in fact, respondents are not engaged in any fiduciary or other capacity to receive money for the persons to whom the forms are sent, and the only money sent them is in the sum of twenty-five cents via respondents' check. Respondents use Initial Decision 72 F. T. this form to seek the information solely for the purpose of locating alleged 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 set forth in Paragraphs 7 and 8 were, and are, false, misleading and decepti ve.

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

CONCLUSIONS 1. The aforesaid acts and practices of respondents, as herein found, 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.

2. The Federal Trade Commission has jurisdiction of and over respondents and of the subject matter of this proceeding. 3. The complaint herein states a cause of action and this proceeding is in the public interest.

4. The order, as hereinafter set forth, follows the form of the order contained in the complaint and is also the order agreed to by the parties.

After due consideration, the hearing examiner believes that such order is appropriate and may be entered. ORDER It is ordered That respondents Michael J. :V1il1er and Ida Miler, individuals trading and doing business as Tracer Reserve Fund, or under any other name or names, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the business of obtaining information concerning delinquent debtors, or the offering for sale sale or distribution of forms or other materials, for use in obtaining information concerning delinquent debtors, or in the collection of or attempting to collect accounts, in commerce, as "commerce " is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

TRACER RESERVE FUND 421 413 Final Order 1. Using the name "Tracer Reserve Fund" or any other name of similar import to designate, describe or refer to respondents' business, or otherwise misrepresenting the purpose for which information is sought.

2. Representing, directly or by implication that money or any other thing of value has been deposited with respondents for persons from whom information is sought, unless or until the money or other thing of value has in fact been so deposited, and then only when the exact sum of money or the exact nature of the other thing of value, is clearly and expressly disclosed and described.

3. Using, or placing in the hands of others for use, any form, questionnaire, or other material printed1 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.

4. Representing, directly 01' by implication, that respondents maintain business offces in Chicago, Illinois, or in any other city other than where business offces of respondents are actually maintained.

FINAL ORDER No appeal from the initial decision of the hearing examiner having been filed, and the Commission having determined that the case should not be placed on its own docket for review and that pursuant to Section 3.51 of the Commission s Rules of Practice (effective July 1 , 1967), the initial decision should be adopted and issued as the decision of the Commission: It is ordered That the initial decision of the hearing examiner shall, on the 21st day of August 1967, become the decision of the Commission.

It is furthe1' ordered That respondents, Michael J. Miler and Ida Miler, individuals trading and doing business as Tracer Reserve Fund, shall, within sixty (60) days after service of this order upon them, file with the Commission a report in writing, signed by such respondents, setting forth in detail the manner and form of their compliance with the order to cease and desist. Complaint 72 F.