Grayel Enterprises, Inc

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

products, — operating”

refer ‘to Ti : ‘it ap aring to the Com Assio “spect the of a uk UAL MU BINA Lod, LNU., BL AL, 495 492 Complaint and practices hereinafter set forth. Their business address is the same as that of the corporate respondent.

Par. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of household appliances, books, tools and other merchandise to the pubhte, Par. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their agents, representatives, and employees to contact various persons by telephone and by post in the District of Columbia for the purpose of inducing such persons to travel into the State of Maryland to the respondents’ place of business so that they might be sold merchandise by the respondents’ agents, representatives and employees, 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 the respondents’ business, and for the purpose of inducing the purchase of respondents’ merchandise, respondents’ agents, representatives and employees have made, and are now making, numerous statements and representations, directly or by implication, to prospective customers that: Respondents are conducting a market survey for future potential buying in the area.

Prospective customers have won a prize by correctly answering a simple question.

Prospective customers are especially selected. Customers are receiving a special introductory price. Customers are receiving additional merchandise at no additional cost.

_ The respondents’ purpose is to introduce and make known in the area the EmpeKo brand name in preparation for the placing of EMDEKO products in local retail stores.

Par. 5. In truth and in fact:

_ 1. The respondents are not conducting a market survey. Respondents are only seeking information about a person’s appliance needs and credit rating to determine whether an attempt should be made to sell merchandise to that person.

2. Persons do not win a prize by correctly answering a simple question, but are so notified because such persons appear to be good prospects for the sale of merchandise. The awarding of a prize to all persons who appear to be good credit risks is the means used to induce prospective customers to make an appointment with respondents’ agents, representatives and employees. Complaint 18 F.T-.C.

3. Respondents’ customers are not especially selected. On the contrary, said merchandise is available to anyone with the money or credit rating to buy it.

4. Respondents’ customers do not receive a special introductory price but are offered merchandise at prices which are higher than those charged for comparable merchandise in the respondents’ trade area. a ;

5. Respondents’ customers do not receive additional merchandise at no additional cost, but the price of any additional items of merchandise is included in the price that such customers pay for the major, or principal, item selected, and the major item selected has never been sold separately in substantial quantities at the price being asked for such major item. , 6. The respondents’ true purpose is to sell merchandise to the public at a profit. exprxo brand products are not sold in regular retail stores, but are sold only by methods similar to those used by the respondents.

Therefore, the statements and representations set forth in Paragraph Four hereof were, and are, false, misleading and deceptive. Par. 6. In the course and conduct of the respondents’ business, and for the purpose of inducing in prospective buyers the belief that said prospective buyers would receive a special introductory price in return for the rendering of a valuable advertising service to the respondents and to National Housewares, respondents’ agents, representatives and employees have solicited from prospective buyers: 1. Written promises that said prospective buyers will write testimonial letters concerning merchandise they purchase from respondents. , 2. Oral promises that said prospective buyers will not sell or give away, during the following year, merchandise they purchase from respondents.

Par. 7. In truth and in fact all respondents’ customers have been required to make such promises as part of a sales scheme and such customers do not receive a special introductory price. Par. 8. The aforesaid solicitations set forth in Paragraph Six hereof had, and now have, the capacity and tendency to deceive, and have in fact deceived, members of the purchasing public into believing that they were receiving a special introductory price in return for the rendering of a valuable advertising service. Par. 9. In the course and conduct of their business, and for the purpose of inducing prospective customers to visit respondents’ place of business, respondents operated, or pretended to operate, various GRAYEL ENTHERPHLSHID, LIN.) H+ tee 492 Complaint lotteries in which valuable merchandise was allotted by lot or chance for consideration, the consideration being the prospective customer’s visit to respondents’ place of business. Par. 10. The uses by the respondents of the aforesaid lotteries, or pretended lotteries, were, and are, all to the prejudice and injury of the public and of respondents’ competitors. Par. 11. In the course and conduct of their business, respondents, in the operation of a, lottery, have represented that they were giving away $12,500 in sample products, from the rmprxko brand name product line, to include major and minor sales items. Par. 12. In truth and in fact:

1. The respondents did not give away $12,500 in sample products in the aforesaid lottery.

2. Most of the sample products listed to be given away were not given away in the aforesaid, lottery.

3. Those items of lesser value which were given away in aforesaid lottery were not part of the emprxo brand name product line in that they were never offered for sale by the respondents. Therefore, the representations set forth in Paragraph Eleven hereof were, and are, false, misleading and deceptive. Par. 13. In the course and conduct of respondents’ business, and for the purpose of inducing the purchase of respondents’ merchandise, respondents’ agents, representatives and employees have made, and now make, numerous statements and representations, directly or by implication, to prospective customers that said prospective customers:

1. Have a gift waiting for them at respondents’ “office.” 2. Are invited to listen to and evaluate a presentation of the EMpDEKO marketing program.

3. Will be entered in an EMDEKO contest. Par. 14. The respondents, when making such statements and representations as shown in Paragraph Thirteen have failed to disclose to said prospective customers the following material facts: 1. Respondents’ agents, representatives and employees will attempt to sell respondents’ merchandise to persons who arrive at respondents’ place of business to pick up a gift. 9. Respondents’ agents, representatives and employees will attempt to sell respondents’ merchandise to persons who listen to a presentation of the empexo marketing program upon completion of the presentation.

3. It is necessary for a person to listen to a presentation of the empEKo marketing program in order to be eligible to enter the EMpexo contest. .

Complaint GS F.T.C.

Therefore, the statements and representations set forth in Para- - graph Thirteen hereof were, and are, deceptive. Par. 15. In the course and conduct of the respondents’ business, and for the purpose of inducing the purchase of respondents’ merchandise, the respondents’ agents, representatives and employees have made numerous statements and representations to prospective buyers with respect to the “value” or “comparative value” of respondents’ merchandise.

Par. 16. By and through the use of said statements and representations, respondents have represented, and are now representing, directly or by implication, that said “values” or “comparative values” are not appreciably in excess of the prices at which substantial sales of comparable merchandise have been made in the recent regular course of business in the trade area where such representations were made.

Par. 17. In truth and in fact:

The aforesaid stated “values” or “comparative values” appreciably exceeded the prices at which substantial sales of comparable merchandise have been made in the recent regular course of business in the trade area where such representations were made. Therefore, the statements and répresentations set forth in Paragraphs Fifteen and Sixteen hereof were, and are, false, misleading and deceptive.

Par. 18. 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 in the sale of household appliances, books, tools and other merchandise of the same general kind and nature as that sold by respondents. Par. 19. The use by the 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 said 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. 20. The aforementioned acts and practices of the 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 in commerce and unfair and deceptive acts and practices in commerce, in violation of Section 5 of the Federal Trade Commission Act. with the p: cedut oe Commission | issues its complain ers the following orde poral 01 commission - as uris et Decision and Order 78 F.TC, Foster, individually and as officers of said corporation, and respondents’ agents, representatives and employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of household appliances, books, tools or any other product, in commerce as “commerce” js defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing, directly or by implication, that: (a) Respondents are conducting a market survey for future potential buying in the area.

(b) Prospective customers have won a prize by correctly answering a simple question.

(c) Prospective customers are especially selected. (d) Customers are receiving a special introductory price. (e) Customers are receiving additional merchandise at no additional cost, (f) The respondents’ purpose is to introduce and make known in the area the zapnxo brand name in preparation for the placing of rmprxo products in local retail stores. - Soliciting in any manner:

(a) Testimonials, or promises of future testimonials, from a buyer concerning the merchandise being offered for sale, prior to the consummation of any sales transaction, or prior to the termination of any period for rescission available to the buyer, whichever is later.

(b) Promises from a buyer that said buyer will not sell or give away merchandise being offered for sale, except where necessary to protect a security interest. 3. Operating a lottery.

4. Failing to disclose to all persons contacted for the purpose of selling respondents’ merchandise to them that: (a) Respondents’ agents, representatives and employees will attempt to sell merchandise to persons invited to respondents’ place. of business to pick up a gift, (b) Respondents? agents, representatives and employees will attempt to sell respondents’ merchandise to persons who are invited to listen to, and evaluate, a presentation of the PMDEKO marketing program.

(c) It is necessary for a person to listen to a presentation of the ymprxo marketing program in order to be eligible to enter the EMDEKO Sweepstakes Contest, provided that the EMpDEKO Sweepstakes Contest, has been brought to the attention of said person.

bo -amount ubstantial- Jaims and* comparatry’ of the type described in Decision and Order 78 F:T.C.

9. Representing; directly or by implication, that any offer is limited in point of time or restricted in any manner, unless the represented limitation or restriction is actually imposed and in good faith adhered to by respondents.

ft is further ordered, That the respondents herein shall, in connection with the offering for sale, sale or distribution of respondents’ products or services, incorporate the following statement on the face of all contracts executed by respondents’ customers with such conspicuousness and clarity as is likely to be observed, read and understood by the purchaser:

Important Notice If you are obtaining credit in connection with this contract, you will be required to sign a promissory note. This note may be purchased by a bank, finance company or any other third party. If it is purchased by another party, you will be required to make your payments to the purchaser of the note. You should be aware that if this happens you may be required to pay the note in full to the new owner of the note even if this contract is not fulfilled. I Lt is further ordered, That the respondents herein shall, in connection with the offering for sale, sale or distribution of respondents’ products or services, forthwith cease and desist from: 1. Contracting for any sale whether in the form of trade acceptance, conditional sales contract, promissory note, or otherwise which shall become binding on the buyer prior to midnight of the third day, excluding Sundays and legal holidays, after the date of execution.

2. Failing to disclose, orally prior to the time of sale and in writing on any trade acceptance, conditional sales contract, promissory note or other instrument executed by the buyer with such conspicuousness and clarity as is likely to be observed and read by such buyer, that the buyer may rescind or cancel the sale by directing or mailing a notice of cancellation to respondents’ address prior to midnight of the third day, excluding Sundays and legal holidays, after the date of the sale. Upon such cancellation the burden shall be on respondents to collect any goods left in buyer’s home and to return any payments received roposed change in n the ment or sale, resultii n, th _ creation or diss ol oration. which may aff Complaint 78 F.T.C,