Perfect Film & Chemical Corporation

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

In ter Martrer oF PERFECT FILM & CHEMICAL CORPORATION ET AL. CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-1918. Complaint, May 13, 1971—Decision, May 18, 1971 Consent order requiring New York City, Philadelphia, Pa., and Fort Worth, Texas, corporations engaged in using deceptive and unfair means to sell magazine subscriptions and collect accounts to cease misrepresenting that they are conducting surveys or contests, performing services for the Youth Ovvortunity Program, failing to reveal that their contacts are to sell maga- WHEEL FILM & CHEMICAL CORP., ET AL. YYL 990 Complaint zines, harassing customers by phone and falsely threatening legal action, and failing to give all essential details on their subscription contract; the order also defers the effective date of the subscription contract for 72 hours and gives the customer the right to cancellation within the period; it also forbids respondents to use third-party solicitors unless such third parties agree to be bound by the order. :

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 Perfect Film & Chemical Corporation, a corporation; Perfect Subscription Company, a corporation; and Keystone Readers’ Service, Inc., a 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:

Paracrary 1. Perfect Film & Chemical Corporation (hereinafter referred to as Perfect Film) is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal place of business located at 641 Lexington Avenue in the city of New York, State of New York. Respondent Perfect Film is a diversified corporation with a substantial interest in the publishing, sale and distribution of magazines and periodicals. A substantial portion of Perfect Film’s income is derived from the sale and distribution of magazines and_ periodicals through newsstand and subscription sales. Subscription sales are those in which the subscribers remits the full amount of the subscription price at the outset or in which the subscriber remits the price of the subscription contract at monthly intervals during the first half of the term of the subscription contract. The latter form of subscription sales, hereinafter referred to as “paid-during-service” or “PDS” subscription sales, are solicited by respondent Keystone Readers’ Service, Inc. Net sales for Perfect Film for the year 1968 were over 100 million dollars. Respondent Perfect Subscription Company (hereinafter referred to as Perfect Subscription) is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal office and place of business located at Independence Square in the city of Philadelphia, State of Pennsylvania. It is a wholly-owned subsidiary of respondent Perfect Film. Perfect Subscription is primarily engaged in the business of selling and distributing magazines and periodicals through its various Complaint 78 E.T.C.

operating divisions and subsidiaries, such as respondent subsidiary Keystone Readers’ Service, Inc. Perfect Subscription’s volume of business in the sale and distribution of magazines and periodicals to the general public is substantial.

Respondent Keystone Readers’ Service, Inc. (hereinafter referred to as Keystone), is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal office and place of business located at the Transamerica Building, Seventh and Main Streets, in the city of Fort Worth, State of Texas. It is a wholly owned subsidiary of respondent Perfect Subscription. — Keystone is engaged in the business of selling and distributing magazines and periodicals to the general public through its franchisees and subfranchisees, sometimes referred to as Regional Franchise Operators (RFOs) and Local Franchise Operators (L¥Os). Subscription contracts are sold on an installment basis (PDS). for a large number of publishers through telephone and door-to-door solicitations. Keystone authorizes the use of five trade names under which subscriptions can be solicitated and written: Keystone Readers’ Service, Ben Franklin Reading Club, Publishers’ Associated Service. Sales by Keystone for 1968 were over 24 million dollars. Keystone is essentially the same corporation: formerly whollyowned by the Curtis Publishing Company. In June of 1968, all of the assets of Keystone were transferred to Perfect Film where for a time it was operated as a division. Subsequently, in November of 1968, Keystone was transferred to Perfect Subscription where it operated as a division until January of 1970. Subsequently, Keystone has operated as a wholly-owned subsidiary of Perfect Subscription.

' The aforementioned respondents cooperate and act together in carrying out the acts and practices hereinafter set forth. Par. 2. In the course and conduct of their business of selling and firms who have entered into franchise agreements with Keystone, and through representatives engaged by or through franchisees and subfranchisees, have induced members of the general public to subscribe to various publications.

Respondents, through their said franchises, subfranchises, and representatives engaged by or through said franchisees and subfranchisees, place into operation and, through various direct and indirect means and devices, control, direct and implement sales methods whereby members of the general public are contacted by telephone calls and door-to-door solicitations, and by means of state- ©) PERFECE: sium ev uesmeever ons 990°5 1 2 1 1 2 1134 219 14 25 0.000000 ~-5 1 2 1 1 3 1156 227 179 41 95.090302 Complaints 1 2 1 1 4 1370 205 33 52 28.049988 oP2 1 3 0 0 0 665 178 1435 144 -1 3 1 3 1 0 0 665 178 1435 144 -1 4 1 3 1 1 0 665 178 1435 144 -1 5 1 3 1 1 1 665 252 74 70 95.000000 5 1 3 1 1 2 1956 178 144 113 95.000000 2 1 4 0 0 0 519 272 1457 597 -1 3 1 4 1 0 0 519 266 1481 603 -1 4 1 4 1 1 0 584 272 1329 92 -1 5 1 4 1 1 1 521 320 207 44 40.467487 ments,5 1 4 1 1 2 739 305 403 57 93.346436 representations,5 1 4 1 1 3 1053 301 90 67 89.631790 acts5 1 4 1 1 4 1155 297 68 46 71.443619 and.5 1 4 1 1 5 1246 291 164 50 79.767548 practices5 1 4 1 1 6 1428 301 43 32 79.747292 as5 1 4 1 1 7 1474 278 240 55 64.530441 hereinafter.5 1 4 1 1 8 1728 280 51 33 89.954178 sets 1 4 1 1 9 1789 272 124 47 21.806328 forth,4 1 4 1 2 0 593 320 1321 92 -1 5 1 4 1 2 1 593 368 63 39 78.220604 ares 1 4 1 2 2 665 362 298 50 92.258125 induced5 1 4 1 2 3 825 346 43 71 96.091393 to5 1 4 1 2 4 884 362 78 50 96.950066 signs 1 4 1 2 5 971 350 236 53 96.337418 subscriptions 1 4 1 2 6 1222 348 169 46 96.319397 contracts5 1 4 1 2 7 1412 325 196 73 96.617424 purporting5 1 4 1 2 8 1625 336 38 37 93.026344 to5 1 4 1 2 9 1684 329 61 33 93.026344 lists 1 4 1 2 10 1761 320 153 54 0.000000 publica-4 1 4 1 3 0 598 368 1347 99 -1 5 1 4 1 3 1 598 420 153 47 96.982330 tions5 1 4 1 3 2 710 401 36 70 94.652634 of5 1 4 1 3 3 760 411 61 50 94.652634 thes 1 4 1 3 4 830 405 220 53 78.221863 purchasers”5 1 4 1 3 5 1060 395 162 52 95.941040 choice,5 1 4 1 3 6 1203 383 18 68 90.009323 a5 1 4 1 3 7 1237 397 113 43 96.134644 stated5 1 4 1 3 8 1366 387 228 49 95.975174 subscriptions 1 4 1 3 9 1609 379 121 47 96.943481 periods 1 4 1 3 10 1747 378 60 38 95.384781 for5 1 4 1 3 11 1813 373 103 49 0.000000 each,4 1 4 1 4 0 519 422 1411 98 -1 5 1 4 1 4 1 519 471 152 49 13.578873 ands 1 4 1 4 2 690 472 59 31 97.000740 thes 1 4 1 4 3 768 462 104 44 96.248100 terms5 1 4 1 4 4 889 461 67 47 96.248100 ands 1 4 1 4 5 968 450 203 58 96.292465 conditions5 1 4 1 4 6 1192 452 56 32 96.916779 for5 1 4 1 4 7 1268 440 177 51 96.301186 payments5 1 4 1 4 8 1464 434 55 48 96.301186 by5 1 4 1 4 9 1531 425 233 55 96.841217 installments5 1 4 1 4 10 1775 421 75 51 96.898560 for5 1 4 1 4 11 1857 422 73 45 64.389114 thea 1 4 1 5 0 613 522 1308 95 -1 5 1 4 1 5 1 556 605 59 17 26.479431 ee5 1 4 1 5 2 628 569 105 45 32.145248 The.5 1 4 1 5 3 756 559 164 53 72.653923 executed.5 1 4 1 5 4 949 552 229 47 89.375404 subscriptions 1 4 1 5 5 1196 573 4 14 59.415512 .5 1 4 1 5 6 1210 551 174 42 92.312370 contracts.5 1 4 1 5 7 1412 553 58 22 92.312370 .ares 1 4 1 5 8 1500 533 189 42 94.230804 thereafter5 1 4 1 5 9 1723 522 198 53 96.201561 forwarded4 1 4 1 6 0 560 565 1401 103 -1 5 1 4 1 6 1 560 630 7 5 15.563599 :5 1 4 1 6 2 590 617 164 47 24.077667 ‘through5 1 4 1 6 3 772 615 144 49 77.387268 various5 1 4 1 6 4 934 596 288 72 77.387268 representatives5 1 4 1 6 5 1235 596 162 45 94.608696 engaged5 1 4 1 6 6 1420 594 44 44 95.761459 by5 1 4 1 6 7 1485 601 39 32 96.779198 or5 1 4 1 6 8 1545 584 60 44 96.748215 for5 1 4 1 6 9 1626 584 64 41 96.748215 thes 1 4 1 6 10 1714 565 208 65 73.254707 franchisees5 1 4 1 6 11 1942 579 19 40 73.254707 _4 1 4 1 7 0 596 626 1359 89 -1 5 1 4 1 7 1 596 681 2 2 77.607285 ands 1 4 1 7 2 610 657 363 58 91.589783 subfranchisees5 1 4 1 7 3 988 665 39 39 97.010750 to5 1 4 1 7 4 1039 648 179 53 79.800323 Keystone.5 1 4 1 7 5 1232 644 166 51 94.920204 business.5 1 4 1 7 6 1409 632 230 51 67.874428 ‘Respondents 1 4 1 7 7 1659 631 142 46 96.732376 Perfect5 1 4 1 7 8 1822 622 98 65 85.053925 Film,5 1 4 1 7 9 1952 641 3 15 21.580429 —4 1 4 1 8 0 564 675 1412 94 -1 5 1 4 1 8 1 564 717 192 52 0.000000 through5 1 4 1 8 2 777 719 61 39 84.187325 its5 1 4 1 8 3 855 710 198 48 90.391861 subsidiary5 1 4 1 8 4 1076 697 158 59 76.942863 Perfect5 1 4 1 8 5 1246 690 247 53 13.006279 Subscription,5 1 4 1 8 6 1514 679 153 68 74.573608 accepts.5 1 4 1 8 7 1678 683 60 41 96.480301 thes 1 4 1 8 8 1763 675 213 48 64.159836 revenues.4 1 4 1 9 0 613 726 1315 90 -1 5 1 4 1 9 1 613 767 138 49 95.902344 flowing5 1 4 1 9 2 773 764 94 49 95.902344 from5 1 4 1 9 3 887 764 71 42 95.000488 said5 1 4 1 9 4 979 753 217 55 95.000488 circulation,5 1 4 1 9 5 1213 752 81 45 84.650055 sales 1 4 1 9 6 1305 746 82 46 96.036194 ands 1 4 1 9 7 1402 738 221 50 82.805420 distributions 1 4 1 9 8 1645 734 40 33 94.863693 of5 1 4 1 9 9 1707 733 60 31 96.942352 thes 1 4 1 9 10 1789 726 139 35 64.284988 various5 1 4 1 9 11 1954 725 25 44 57.561661 —4 1 4 1 10 0 586 779 1292 90 -1 5 1 4 1 10 1 586 827 2 2 0.000000 ~5 1 4 1 10 2 614 815 229 54 94.162773 publications5 1 4 1 10 3 860 809 239 47 40.636047 offered...5 1 4 1 10 4 1148 801 2 2 40.636047 -5 1 4 1 10 5 1297 800 49 7 27.061348 ote5 1 4 1 10 6 1463 789 65 14 35.008301 eh5 1 4 1 10 7 1789 779 89 11 13.865356 need2 1 5 0 0 0 1918 465 1 2 -1 3 1 5 1 0 0 1918 465 1 2 -1 4 1 5 1 1 0 1918 465 1 2 -1 5 1 5 1 1 1 1918 465 1 2 95.000000 2 1 6 0 0 0 1918 462 182 214 -1 3 1 6 1 0 0 1918 462 182 214 -1 4 1 6 1 1 0 1918 462 182 131 -1 5 1 6 1 1 1 1918 462 182 131 95.000000 4 1 6 1 2 0 1956 593 144 83 -1 5 1 6 1 2 1 1956 593 144 83 95.000000 2 1 7 0 0 0 560 567 66 35 -1 3 1 7 1 0 0 560 567 66 35 -1 4 1 7 1 1 0 560 567 66 35 -1 5 1 7 1 1 1 560 567 66 35 95.000000 2 1 8 0 0 0 661 829 1268 82 -1 3 1 8 1 0 0 661 829 1268 82 -1 4 1 8 1 1 0 661 829 1268 82 -1 5 1 8 1 1 1 661 869 44 38 74.224152 Jn5 1 8 1 1 2 733 872 62 39 89.697922 thes 1 8 1 1 3 821 875 141 35 94.575623 manners 1 8 1 1 4 981 851 194 48 79.558777 ‘aforesaid,5 1 8 1 1 5 1205 843 217 51 83.393829 respondent.5 1 8 1 1 6 1438 837 142 47 90.766731 Perfect.5 1 8 1 1 7 1594 836 118 46 42.696480 Film:5 1 8 1 1 8 1729 829 200 44 93.992065 dominates,2 1 9 0 0 0 544 875 1521 741 -1 3 1 9 1 0 0 544 875 1527 744 -1 4 1 9 1 1 0 606 875 1379 99 -1 5 1 9 1 1 1 606 917 170 57 75.822624 controls,5 1 9 1 1 2 790 904 181 64 96.697983 furnishes5 1 9 1 1 3 988 908 61 44 96.961075 thes 1 9 1 1 4 1061 905 137 47 47.873154 ‘means,5 1 9 1 1 5 1215 893 326 48 92.350174 instrumentalities,5 1 9 1 1 6 1563 886 143 44 96.480232 services5 1 9 1 1 7 1726 881 71 43 92.922020 ands 1 9 1 1 8 1819 875 112 37 71.255280 facili-5 1 9 1 1 9 1959 901 26 5 11.570320 ..4 1 9 1 2 0 619 925 1438 92 -1 5 1 9 1 2 1 575 1000 18 20 26.247543 _5 1 9 1 2 2 619 975 64 42 81.170639 ties5 1 9 1 2 3 711 973 68 39 81.170639 for,5 1 9 1 2 4 806 968 69 34 96.784409 ands 1 9 1 2 5 901 954 177 53 93.262283 condones,5 1 9 1 2 6 1087 963 196 40 90.176804 approves,5 1 9 1 2 7 1305 948 73 46 92.612946 ands 1 9 1 2 8 1401 947 141 39 92.612946 accepts5 1 9 1 2 9 1564 941 70 41 64.879677 the.5 1 9 1 2 10 1650 932 196 46 94.342522 pecuniary5 1 9 1 2 11 1865 925 69 47 17.875198 anda 1 9 1 3 0 580 972 1356 92 -1 5 1 9 1 3 1 580 1024 17 38 0.000000 -5 1 9 1 3 2 620 1026 98 38 94.798698 others 1 9 1 3 3 738 1003 153 65 89.915459 benefits5 1 9 1 3 4 911 1003 137 65 89.915459 flowing5 1 9 1 3 5 1074 1010 98 41 89.120560 from5 1 9 1 3 6 1192 1006 57 31 95.954750 thes 1 9 1 3 7 1270 998 93 48 95.954750 acts,5 1 9 1 3 8 1386 984 171 66 91.273544 practices5 1 9 1 3 9 1586 988 66 46 81.539581 ands 1 9 1 3 10 1671 986 97 33 94.278366 others 1 9 1 3 11 1791 962 145 65 69.068062 benefits4 1 9 1 4 0 581 1026 1427 93 -1 5 1 9 1 4 1 581 1080 13 39 55.567123 ~5 1 9 1 4 2 621 1070 293 42 95.021721 hereinafter5 1 9 1 4 3 852 1057 55 66 93.956612 sets 1 9 1 4 4 928 1061 106 42 93.956612 forth,5 1 9 1 4 5 1057 1060 39 32 96.845009 of5 1 9 1 4 6 1109 1059 68 32 96.869705 thes 1 9 1 4 7 1198 1046 233 49 96.513527 respondents5 1 9 1 4 8 1442 1038 152 52 74.615417 Perfect.5 1 9 1 4 9 1605 1026 333 55 69.345192 Subscriptions 1 9 1 4 10 1870 1019 72 66 0.000000 anda 1 9 1 5 0 578 1077 1361 90 -1 5 1 9 1 5 1 578 1155 2 2 29.765907 ~5 1 9 1 5 2 623 1117 185 50 95.875999 Keystone,5 1 9 1 5 3 818 1113 82 52 95.694008 ands 1 9 1 5 4 919 1116 63 43 95.694008 thes 1 9 1 5 5 1002 1109 186 44 95.763046 respective5 1 9 1 5 6 1210 1094 232 54 83.812889 franchisees,5 1 9 1 5 7 1449 1082 282 60 89.848137 subfranchisees,5 1 9 1 5 8 1744 1077 76 50 87.499084 ands 1 9 1 5 9 1840 1077 109 43 42.542992 their4 1 9 1 6 0 544 1126 1521 92 -1 5 1 9 1 6 1 544 1213 2 2 0.000000 _5 1 9 1 6 2 625 1163 289 55 73.868156 yepresentatives5 1 9 1 6 3 925 1160 154 46 93.003761 engaged5 1 9 1 6 4 1094 1155 74 45 43.891861 ‘by.5 1 9 1 6 5 1183 1151 37 37 78.927307 or5 1 9 1 6 6 1233 1146 156 49 88.871178 ‘through5 1 9 1 6 7 1412 1140 95 51 44.664108 said.5 1 9 1 6 8 1524 1128 217 71 84.688080 franchisees,5 1 9 1 6 9 1754 1131 100 45 71.929222 ands 1 9 1 6 10 1863 1126 77 46 6.247711 sub-4 1 9 1 7 0 572 1179 1369 89 -1 5 1 9 1 7 1 572 1218 269 50 0.000000 franchisees5 1 9 1 7 2 849 1208 225 53 68.886780 ‘hereinafter5 1 9 1 7 3 1094 1202 216 51 73.556335 referred5 1 9 1 7 4 1271 1193 38 64 94.341606 to5 1 9 1 7 5 1323 1197 53 47 94.341606 as5 1 9 1 7 6 1388 1186 236 59 93.807114 respondents’5 1 9 1 7 7 1636 1179 305 52 59.247093 representatives.4 1 9 1 8 0 640 1228 1374 88 -1 5 1 9 1 8 1 640 1312 2 2 20.851204 ~5 1 9 1 8 2 661 1268 141 48 84.111794 Par.5 1 9 1 8 3 770 1258 37 62 80.140594 8.5 1 9 1 8 4 822 1265 37 45 96.460251 In5 1 9 1 8 5 865 1262 85 47 91.236801 the.5 1 9 1 8 6 956 1259 116 51 96.701385 courses 1 9 1 8 7 1092 1259 71 44 82.803810 and.5 1 9 1 8 8 1177 1238 149 61 84.901764 conduct.5 1 9 1 8 9 1345 1247 32 47 93.209808 of5 1 9 1 8 10 1396 1242 95 53 96.945877 theirs 1 9 1 8 11 1502 1233 228 51 95.258743 subscriptions 1 9 1 8 12 1746 1231 93 44 93.293770 sales5 1 9 1 8 13 1850 1228 91 49 17.962112 busi-4 1 9 1 9 0 629 1270 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84.745979 mail4 1 9 1 11 0 610 1373 1341 96 -1 5 1 9 1 11 1 610 1425 126 35 2.343834 from.5 1 9 1 11 2 753 1412 240 61 56.535500 respondents’.5 1 9 1 11 3 1003 1405 125 52 66.823135 places.5 1 9 1 11 4 1138 1404 40 48 96.753349 of5 1 9 1 11 5 1183 1399 175 53 96.005577 business5 1 9 1 11 6 1375 1411 40 29 96.005577 or5 1 9 1 11 7 1432 1387 200 53 74.991165 sources5 1 9 1 11 8 1593 1382 58 62 84.013062 of.5 1 9 1 11 9 1656 1386 126 44 75.947693 supply.5 1 9 1 11 10 1805 1387 37 29 85.902916 to5 1 9 1 11 11 1856 1373 95 57 0.000000 -pur-4 1 9 1 12 0 631 1432 1320 93 -1 5 1 9 1 12 1 631 1455 136 70 95.947662 chasers5 1 9 1 12 2 784 1455 135 70 95.737869 thereof5 1 9 1 12 3 936 1459 140 47 92.909958 located5 1 9 1 12 4 1086 1462 40 44 80.956917 in5 1 9 1 12 5 1132 1450 163 54 80.956917 various.5 1 9 1 12 6 1303 1449 114 47 96.310799 States5 1 9 1 12 7 1430 1447 43 34 96.153275 of5 1 9 1 12 8 1492 1446 58 36 93.956146 thes 1 9 1 12 9 1568 1440 132 45 93.956146 United5 1 9 1 12 10 1720 1432 114 38 81.196655 States5 1 9 1 12 11 1846 1432 105 41 96.499611 other4 1 9 1 13 0 587 1477 1391 94 -1 5 1 9 1 13 1 587 1551 23 14 0.000000 -.5 1 9 1 13 2 637 1528 96 43 68.520325 than’5 1 9 1 13 3 745 1524 62 39 73.857162 thes 1 9 1 13 4 832 1519 86 44 73.857162 states 1 9 1 13 5 927 1512 54 48 77.258507 of5 1 9 1 13 6 986 1506 240 48 96.354729 origination,5 1 9 1 13 7 1248 1504 78 44 88.173477 ands 1 9 1 13 8 1341 1495 95 50 96.432648 have5 1 9 1 13 9 1452 1491 220 48 96.097061 transmitted5 1 9 1 13 10 1696 1473 76 60 94.446510 and.5 1 9 1 13 11 1787 1477 160 52 51.445229 received,4 1 9 1 14 0 601 1532 1383 84 -1 5 1 9 1 14 1 601 1572 111 44 12.121315 ands 1 9 1 14 2 727 1569 127 50 78.530205 caused5 1 9 1 14 3 867 1566 45 47 78.530205 to.5 1 9 1 14 4 922 1564 39 41 94.364449 be5 1 9 1 14 5 968 1555 236 53 96.483253 transmitted5 1 9 1 14 6 1216 1552 85 41 73.173645 ands 1 9 1 14 7 1309 1546 218 48 96.126877 received,5 1 9 1 14 8 1492 1532 33 66 96.126877 in5 1 9 1 14 9 1547 1545 55 41 96.863136 thes 1 9 1 14 10 1614 1536 185 47 88.697533 courses 1 9 1 14 11 1756 1532 44 66 88.697533 of5 1 9 1 14 12 1819 1532 147 42 23.540565 selling,2 1 10 0 0 0 581 1580 1495 746 -1 3 1 10 1 0 0 581 1580 1424 93 -1 4 1 10 1 1 0 581 1580 1424 93 -1 5 1 10 1 1 1 581 1615 269 58 0.000000 delivering,5 1 10 1 1 2 857 1602 58 67 96.879471 ands 1 10 1 1 3 936 1602 191 67 93.868210 collecting5 1 10 1 1 4 1145 1600 249 52 93.015388 payments 1 10 1 1 5 1324 1593 54 63 93.015388 for5 1 10 1 1 6 1401 1597 76 37 96.990677 said5 1 10 1 1 7 1495 1591 228 48 96.690559 publications5 1 10 1 1 8 1748 1584 121 47 96.474648 among5 1 10 1 1 9 1888 1580 83 43 85.353584 ands 1 10 1 1 10 2003 1611 2 2 9.676216 —3 1 10 2 0 0 609 1627 1378 294 -1 4 1 10 2 1 0 609 1627 1378 94 -1 5 1 10 2 1 1 609 1675 7 46 31.568542 _5 1 10 2 1 2 641 1677 149 42 94.295387 between5 1 10 2 1 3 810 1661 51 64 96.277550 thes 1 10 2 1 4 853 1665 164 49 95.363174 several5 1 10 2 1 5 1030 1666 112 43 95.597366 states5 1 10 2 1 6 1163 1659 39 33 96.980415 of5 1 10 2 1 7 1221 1659 59 36 96.980415 thes 1 10 2 1 8 1300 1648 137 49 96.901985 United5 1 10 2 1 9 1453 1649 124 39 96.771637 States,5 1 10 2 1 10 1598 1642 180 37 77.699799 contracts,5 1 10 2 1 11 1798 1632 159 45 81.465584 invoices,5 1 10 2 1 12 1974 1627 13 5 40.840118 —4 1 10 2 2 0 643 1676 1315 97 -1 5 1 10 2 2 1 643 1726 131 47 96.161514 checks,5 1 10 2 2 2 802 1719 176 46 93.339958 collections 1 10 2 2 3 1003 1713 130 47 89.687004 notices5 1 10 2 2 4 1161 1701 80 63 76.083336 and.5 1 10 2 2 5 1245 1705 149 46 85.660271 various5 1 10 2 2 6 1414 1695 105 50 70.273766 others 1 10 2 2 7 1543 1692 106 44 96.320328 kinds5 1 10 2 2 8 1677 1690 40 43 96.320328 of5 1 10 2 2 9 1744 1676 214 73 96.429962 commercial4 1 10 2 3 0 646 1737 1313 83 -1 5 1 10 2 3 1 646 1774 107 46 96.484352 papers 1 10 2 3 2 772 1772 68 34 96.605484 ands 1 10 2 3 3 861 1768 203 46 96.605484 documents.5 1 10 2 3 4 1079 1754 241 53 86.636162 Respondents5 1 10 2 3 5 1338 1743 179 45 96.710541 maintain,5 1 10 2 3 6 1538 1744 75 43 91.207733 ands 1 10 2 3 7 1625 1746 37 39 77.296570 at5 1 10 2 3 8 1678 1740 52 44 77.296570 all5 1 10 2 3 9 1751 1737 98 44 89.426460 times5 1 10 2 3 10 1868 1743 91 30 89.426460 men-4 1 10 2 4 0 646 1782 1337 92 -1 5 1 10 2 4 1 646 1825 117 45 96.668030 tioned5 1 10 2 4 2 780 1820 118 46 96.773750 herein5 1 10 2 4 3 918 1820 81 39 96.693192 have5 1 10 2 4 4 1021 1805 218 69 96.936157 maintained,5 1 10 2 4 5 1258 1818 19 21 90.910988 a5 1 10 2 4 6 1295 1799 203 48 96.181999 substantial5 1 10 2 4 7 1508 1789 125 50 72.855347 courses 1 10 2 4 8 1646 1791 44 35 96.860115 of5 1 10 2 4 9 1707 1786 98 47 96.541862 trades 1 10 2 4 10 1823 1785 38 45 96.371513 in5 1 10 2 4 11 1879 1782 84 34 85.715302 such5 1 10 2 4 12 1979 1808 4 2 83.288986 -4 1 10 2 5 0 649 1832 1315 89 -1 5 1 10 2 5 1 649 1871 163 50 96.543983 products5 1 10 2 5 2 823 1872 40 32 96.836594 in5 1 10 2 5 3 877 1863 192 43 95.260689 commerce,5 1 10 2 5 4 1084 1863 40 41 96.434898 as5 1 10 2 5 5 1134 1855 223 43 74.639915 “commerce”5 1 10 2 5 6 1372 1853 30 39 74.639915 is5 1 10 2 5 7 1417 1843 184 52 81.319862 defined.5 1 10 2 5 8 1568 1839 30 60 81.319862 in5 1 10 2 5 9 1615 1844 59 43 96.703171 thes 1 10 2 5 10 1689 1836 146 45 96.306480 Federal5 1 10 2 5 11 1847 1832 117 35 91.765770 ‘Trade3 1 10 3 0 0 624 1879 1425 89 -1 4 1 10 3 1 0 624 1904 1425 64 -1 5 1 10 3 1 1 624 1914 347 54 20.511009 “Commissions 1 10 3 1 2 1006 1917 97 41 41.434704 Act...5 1 10 3 1 3 1191 1904 32 39 9.768799 ie5 1 10 3 1 4 1324 1890 283 48 21.682007 ee5 1 10 3 1 5 1635 1885 136 51 32.227829 ee5 1 10 3 1 6 1933 1911 116 11 4.348076 fee,3 1 10 4 0 0 589 1932 1450 130 -1 4 1 10 4 1 0 589 1932 1450 91 -1 5 1 10 4 1 1 589 1977 194 46 7.658684 Par.5 1 10 4 1 2 800 1976 30 30 72.938553 4.5 1 10 4 1 3 852 1973 51 45 85.562279 In5 1 10 4 1 4 918 1969 65 43 65.949608 the.5 1 10 4 1 5 999 1956 117 60 69.898895 courses 1 10 4 1 6 1139 1960 67 43 69.898895 ands 1 10 4 1 7 1228 1956 156 46 51.784798 conduct.5 1 10 4 1 8 1398 1952 36 42 92.358139 of5 1 10 4 1 9 1447 1944 100 44 67.432533 ‘theirs 1 10 4 1 10 1568 1939 161 48 86.931282 business5 1 10 4 1 11 1745 1950 37 34 29.926598 as5 1 10 4 1 12 1806 1932 161 49 0.000000 foresaid,4 1 10 4 2 0 654 1984 1315 78 -1 5 1 10 4 2 1 654 2028 69 34 96.768257 ands 1 10 4 2 2 745 2027 56 32 96.768257 for5 1 10 4 2 3 820 2023 60 33 96.993980 thes 1 10 4 2 4 898 2014 156 48 96.693718 purposes 1 10 4 2 5 1067 2011 39 36 96.951073 of5 1 10 4 2 6 1126 2009 165 45 93.209496 inducing5 1 10 4 2 7 1319 1994 150 64 93.209496 members5 1 10 4 2 8 1490 1998 45 45 94.889244 of5 1 10 4 2 9 1543 1997 86 43 86.562805 thes 1 10 4 2 10 1636 1989 144 48 87.032028 general.5 1 10 4 2 11 1795 1984 116 46 85.432915 public.5 1 10 4 2 12 1924 1986 45 36 95.736389 to3 1 10 5 0 0 616 2030 1436 191 -1 4 1 10 5 1 0 616 2030 1381 92 -1 5 1 10 5 1 1 616 2120 2 2 41.713184 ~5 1 10 5 1 2 652 2079 80 41 59.264751 signs 1 10 5 1 3 747 2070 242 44 23.554459 subscription.5 1 10 5 1 4 1003 2062 192 49 95.180855 contracts,5 1 10 5 1 5 1209 2044 251 58 69.839737 ‘respondents:5 1 10 5 1 6 1473 2042 88 51 29.728477 ands 1 10 5 1 7 1569 2041 94 47 60.638996 theirs 1 10 5 1 8 1663 2030 308 56 60.638996 representatives5 1 10 5 1 9 1992 2046 5 8 0.000000 —4 1 10 5 2 0 656 2082 1396 86 -1 5 1 10 5 2 1 656 2124 119 44 95.471939 utilizes 1 10 5 2 2 801 2124 35 41 94.353325 or5 1 10 5 2 3 841 2112 169 54 87.276703 displays 1 10 5 2 4 1019 2112 87 50 87.276703 sales5 1 10 5 2 5 1122 2101 235 59 89.728500 promotional5 1 10 5 2 6 1370 2085 187 66 76.793114 ‘materials5 1 10 5 2 7 1575 2089 42 51 94.296013 or5 1 10 5 2 8 1634 2086 110 51 73.798325 others 1 10 5 2 9 1766 2097 112 33 82.193596 means5 1 10 5 2 10 1905 2082 68 35 0.000000 anda 1 10 5 3 0 654 2129 1366 96 -1 5 1 10 5 3 1 654 2165 324 60 62.569916 jnstrumentalities5 1 10 5 3 2 990 2159 197 56 96.329559 furnished,5 1 10 5 3 3 1206 2155 167 47 96.362221 approved5 1 10 5 3 4 1394 2146 45 39 96.362221 or5 1 10 5 3 5 1456 2141 145 59 86.533684 ratified:5 1 10 5 3 6 1619 2145 45 42 85.198120 by.5 1 10 5 3 7 1677 2129 236 63 96.434402 respondents.5 1 10 5 3 8 1924 2135 96 43 3.943489 In.3 1 10 6 0 0 633 2177 1443 145 -1 4 1 10 6 1 0 633 2177 1443 101 -1 5 1 10 6 1 1 633 2221 247 57 34.247002 conjunction5 1 10 6 1 2 895 2212 202 51 89.208214 therewith,5 1 10 6 1 3 1105 2200 243 55 81.738602 ‘respondents.5 1 10 6 1 4 1373 2202 59 48 85.187958 ands 1 10 6 1 5 1453 2199 114 47 38.986740 theirs 1 10 6 1 6 1581 2183 282 60 96.734673 representatives5 1 10 6 1 7 1880 2177 196 46 20.557442 have.4 1 10 6 2 0 658 2233 1385 93 -1 5 1 10 6 2 1 658 2256 84 70 95.537506 made5 1 10 6 2 2 770 2256 83 70 91.352501 oral5 1 10 6 2 3 869 2260 205 50 91.352501 statements5 1 10 6 2 4 1087 2262 61 44 93.926041 ands 1 10 6 2 5 1168 2250 301 60 50.720577 representations5 1 10 6 2 6 1482 2237 203 53 96.899284 concerning5 1 10 6 2 7 1704 2239 62 36 96.944870 thes 1 10 6 2 8 1783 2244 105 28 85.708725 terms5 1 10 6 2 9 1909 2234 70 34 15.897369 and2 1 11 0 0 0 635 2283 1365 93 -1 3 1 11 1 0 0 635 2283 1365 93 -1 4 1 11 1 1 0 635 2283 1365 93 -1 5 1 11 1 1 1 635 2317 221 59 32.396133 conditions5 1 11 1 1 2 875 2322 38 35 94.691940 of5 1 11 1 1 3 930 2316 79 47 94.691940 said5 1 11 1 1 4 1028 2308 228 55 84.716949 subscriptions 1 11 1 1 5 1277 2294 188 52 84.753616 contracts,.5 1 11 1 1 6 1480 2298 87 43 96.958046 theirs 1 11 1 1 7 1585 2283 146 60 96.166679 renewals 1 11 1 1 8 1751 2283 48 60 90.751724 or.5 1 11 1 1 9 1816 2285 184 47 21.473404 cancella-_2 1 12 0 0 0 598 2334 1385 99 -1 3 1 12 1 0 0 598 2334 1385 99 -1 4 1 12 1 1 0 598 2334 1385 99 -1 5 1 12 1 1 1 598 2369 13 17 69.666656 :5 1 12 1 1 2 629 2386 11 47 0.000000 -5 1 12 1 1 3 658 2374 102 57 92.572960 tion,5 1 12 1 1 4 769 2365 127 63 96.716164 specials 1 12 1 1 5 912 2365 116 63 92.981079 offers,5 1 12 1 1 6 1048 2361 61 51 96.312859 thes 1 12 1 1 7 1122 2360 128 51 92.054718 nature5 1 12 1 1 8 1272 2357 68 37 94.414597 ands 1 12 1 1 9 1362 2346 147 52 84.777496 purposes 1 12 1 1 10 1531 2346 39 44 84.777496 of5 1 12 1 1 11 1586 2337 64 48 96.764664 thes 1 12 1 1 12 1661 2335 229 55 96.762672 solicitation,5 1 12 1 1 13 1908 2334 75 35 96.306793 and2 1 13 0 0 0 802 2488 112 6 -1 3 1 13 1 0 0 802 2488 112 6 -1 4 1 13 1 1 0 802 2488 112 6 -1 5 1 13 1 1 1 802 2488 112 6 95.000000 2 1 14 0 0 0 783 2509 48 19 -1 3 1 14 1 0 0 783 2509 48 19 -1 4 1 14 1 1 0 783 2509 48 19 -1 5 1 14 1 1 1 783 2509 48 19 95.000000 994. FEDERAL TRADE COMMISSION DECISIONS Complaint 78 E.T.C.

and their representatives have represented, directly or indirectly : (a) That they are primarily conducting or participating in bona fide surveys, quizzes or contests.

(b) That their offers are being made only to specially selected persons.

(c) That they represent, or are performing services for bona fide non-commercial organizations, or other similar organizations such as Youth Opportunity Program.

(d) That publications or other products will be given free, or for the cost of mailing, handling, editing or printing said publications, or at special or reduced prices.

(e) That subscribers wil] be allowed to cancel the subscriptions if they should decide to do So.

(f) That a free gift subscription to a publication will be sent to. a subscriber’s friend or relative, Par. 5. In truth and in fact:

(a) Said representatives were not primarily conducting or participating in bona fide Surveys, quizzes or contests, but to the contrary, were, and are, engaged in inducing the general public to sign subscription contracts in the manner aforesaid. (b) Respondents’ said offers were not being made only to specially selected persons, but to the contrary, were made to numerous members of the general public through frequent solicitations of broad segments thereof.

(c) Said representatives neither represented nor performed sery- - ices for bona fide non-commercial organizations, or other similar - organizations such as Youth Opportunity Program, but to the contrary, represented or performed services for respondents in the manner aforesaid.

(d) Publications or other products were not given free, nor solely for the cost of mailing, handling, editing or printing of said publications, nor at special or reduced prices. To the contrary, the subscription contracts provided for payment to cover respondents’ regular or prevailing subscription contract prices, (e) On a substantial number of occasions subscribers were not allowed to cancel their subscription contracts or were only allowed to do so after extended delay.

(f) Gift subscriptions to a person designated by the subscriber were not given free, but to the contrary, the cost of said gift subscriptions were included within the price of the subscription contract. Therefore, the statements and representations as set forth in Paragraph Four hereof were, and are, false, misleading and deceptive, a sronate costs of a uubseription contract. on a weekly. basis in €0! Ap the further ‘course ia conduct of theic pusiness, a: _ of their purpose ‘of ind ng the pu hase, of and payid. publications by the general pt; and tives. directly or indirectly, | ‘acts and practices:

(a). In. a gubstantial number of. tae t “Junction . with: statements | of typical subscription periods as, fe example, a cost. of “50. cents per weel 2?-and: a period of .60. -months. Respondents and their ‘yepresentatives falsely and deceptively » fail to disclose, in connection with such. statements, the material fact that s ae their contracts seldom, if ever, provide: for weekly installment ‘pay ments, oF for payments. spread over 60: months. In truth and. in fact, ‘the contracts require monthly installment payments, of. substantially - higher. amounts. over a: substantially s shorter period of time than ae stated during such oral presentations. ees (b) Ina substantial. number of instances they have. Gnduced © cus- LS tomers. ‘to sign @ subscription. contract. py falsely: and. deceptively os representing it. to be a. preference - ‘list, a. guarantee, a. route | ‘ship, or. a documen of an i port. or. nature other than. a subseription com see ‘acco “subscription. contracts, they. have. resorted to. telephone « calls at un efforts to collect what respondents elect to treat 2 as Ss a unts of customers who have been. induced to sign — aS -_ reasonable hours: ‘and other forms of harassment, by m ns of which ae they. have unfairly, falsely and deceptively repre esented, di rectly or indirectly :.

(1) That. the general. or. ‘piiblie: ‘eredi such customer’ will be adversely affectec unless “payment igmade; (2). ‘That the failure of a customer. to remit money to. respondents cee will result in the. ‘institution. of legal: action to effect. payment}. and — (8) That. the failure of a customer to remit money to. respondents will ‘result in said customer’s account, being rrned over to. a ‘Pons os ee fide, independent co collection agency for collection... : ote ee In truth and in fact, respondents . seldom, af ever, take a ‘any aioe S os including legal | action or referral of said. accounts to a bona fide, . ee independent | collection agency, which. adversely affects the general : public credit rating of such subscribers. . = (d) Ina substantial number of, instances, cespondents. ‘have “gab: : stituted publications. for. those. originally contracted. for by subseribers. without first giving the subseriber an. option. to choose the substi- | ine or other publication, or. to receive, a full return with | rating’ or. - standing of any ae tS; as. set ‘forth herein.

and deceptive acts and _.. Therefore, Tespondents’ statemerits, rep tices, and their failure to reveal ma erie were, and are, unfair, false, 3 misleading “Practice. ee ae :

Par. 7. In addition to the foregoing statements, representations, os acts and practices, respondents have engaged in door-to-door solici- a tations of magazine subscriptions, either without ‘prior invitations oe _ to solicit’such sales from prospective purchasers or by using one or rf t sand methods aforesaid to gain access to prospective. purchasers at times and under circumstances when: such Prospective purchasers were not otherwise considering the purchase © = of magazine subscriptions, and without either: a PEE SUE (a): Aflirmatively stating and affording such purchasers the right to cancel any resulting subscription contract for a period of not. less. than 72 hours, or aE, TREES ETE eget ces (b) By refusing to honor any such right purportedly given either orally or in writing, or thwarting the exercise of any right so given, The solicitation of subscription sales without. permitting cancellation Within'a reasonable time constitutes an unfair, false, misleading and deceptive Practice where such sale involves long term obligations on the part of the subscriber and: where it is made under the conditions and circumstances herein alleged. Se aS are Therefore, respondents’ acts and practices as set forth herein were, and are, unfair, false, misleading and deceptive acts and practices, Par. 8 By cand through the use of the aforesaid acts and practices, respondents place in the hands of others the means and instrumentalities by and through which they may mislead and deceive the public in the manner and as to the things: hereinabove alleged, Par. 9. In the cotirse and conduct of their business, and at al] times mentioned herein, respondents have been, and now are, in substan. tial competition, in commerce, ‘with. corporations, firms and. individ-. PERFECT FILM & CHEMICAL CORP., ET AL. YgY/ 990 Decision and Order uals in the sale of products of the same general kind and nature as that sold by respondents.

Par. 10. The use by respondents of the aforesaid unfair and false, misleading and deceptive statements, representations and practices, and their failure to disclose material facts, as aforesaid, 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 complete, and into the purchase of substantial quantities of said products by reason of said erroneous and mistaken belief and unfairly into the assumption of debts and obligations and the payment of monies which they might otherwise not have done. — 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 in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption here of 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 the respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said argument is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and The Commission having considered the agreement and having accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in Section 2.84(b). of its Rules, the Commission hereby issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order: Decision and Order 7 F.T.C.

1. Respondent Perfect Film & Chemical Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at 641 Lexington Avenue in the city of New York, State of New York.

Respondent Perfect Subscription Company is a corporation organized, existing and doing business under and-by virtue of the laws of the State of Delaware, with its office and principal place of business located at 841 Chestnut Street, in the city of Philadelphia, State of Pennsylvania.

Proposed respondent Keystone Readers’ Service, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at the Transamerica Building, Seventh and Main Streets, in the city of Fort Worth, State of Texas. 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 I It is ordered, That respondents Perfect Film & Chemical Corporation, a corporation, Perfect Subscription Company, a corporation, and Keystone Readers’ Service, Inc., a corporation, and respondents’ officers, representatives, employees, successor or assigns, franchisees, sub-franchisees, salesmen, agents or solicitors, and the men, agents or solicitors engaged by or through respondents’ franchisees or subfranchisees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of magazines or any other publications or merchandise, or subscriptions to purchase any such magazines or services, or in the collection or attempted collection of any delinquent or other subseription contract or other account, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or indirectly, that respondents are primarily conducting or participating in any survey, quiz or contest, or are engaged in any activity other than soliciting business; or misrepresenting, in any manner, the purpose of the call or solicitation.

2.. Representing, directly or indirectly that any offer to sell said products or services is being made only to specially selected PERFECT FILM & CHEMICAL CORP., ET AL. 999 Decision and Order persons; or misrepresenting, in any manner, the persons or class of persons afforded the opportunity of purchasing respondents’ products or services.

3. Representing, or performing services for Youth Opportunity Program or any similar organization, or any individual or firm other than one engaged in soliciting business; or misrepresenting, in any manner, the identity of the solicitor or of his firm and of the business they are engaged in. 4. Representing, directly or indirectly, that any merchandise or service is free, or is provided as a gift to either the subscriber or a person designated by him, or without cost or that any merchandise or service can be obtained free or as ‘a gift or without cost or charge, in connection with the purchase of, or agreement to purchase any merchandise, or combination of merchandise or service, unless the stated price of the merchandise or service or combination thereof required to be purchased in order to obtain such free merchandise or gift is the same or less than the customary and usual price at which such merchandise or service or combination thereof required to be purchased has been sold separately from such free or gift item, for a substantial period of time in the recent and regular course of business in the trade area in which the representation is made. 5. Representing that any price is a special or reduced price unless it constitutes a significant reduction from an established selling price at which such product or service has been sold in substantial quantities in the recent and regular course of trade; or misrepresenting, in any manner, the savings which will be accorded or made available to purchasers, or that any price for any product or service covers only the cost of mailing, handling, editing, printing, or any other element of cost, or is at or below cost. - 6. Refusing or failing upon request to cancel a contract when the representation has been made, either directly or indirectly, that the contract will be cancellable. , 7. Failing, clearly, and unqualifiedly to reveal initially at all contacts or solicitations of purchasers or prospective purchasers, whether directly or indirectly, or by telephone, written or printed communication, or person-to-person, that the purpose of such contact or solicitation is to sell publications, prodnuets or services, as the case may be, which purpose shall be identified with particularity at the time of each such contact or solicitation. 470-536—73. 64 Decision and Order 78 F.T.C.

8. Making any reference or statement concerning “5S0¢ per week,” “60 months,” or any other statement as to a sum of money or duration or period of time in connection with a subscription contract or other purchase agreement which does not in fact provide, at the option of the purchaser, for the payment of the stated sum, at the stated interval, and over the stated duration or period of time; or misrepresenting, in any manner, the terms, conditions, method, rate or time of payment actually made available to purchasers or prospective purchasers. 9. Representing, directly or indirectly, that a subscription contract or other purchase agreement is a “preference list,” guarantee,” “route slip” or any kind of document other than a contract or agreement; or misrepresenting, in any manner, the nature, kind or legal characteristics of any document. 10. Failing, clearly and unqualifiedly, to reveal orally to each purchase or prospective purchaser before execution, and in writing on each document, the identity, and nature of any document, such as a “contract” they are requested or required to execute in connection with the purchase of any product or service; and orally that the terms of any such document are binding on the parties to the document.

11. Attempting, by the use of telephone calls or any other means, to harass or intimidate customers in order to effect payment of any account.

12. Misrepresenting, directly or indirectly, that in the event of nonpayment or delinquency of any account or alleged debt arising from any subscription contract or purchase agreement, the general or public credit rating or standing of any person may be adversely affected, unless respondents actually do refer information concerning delinquencies to a bona fide credit reporting agency.

13. Failing, clearly and unqualifiedly, to disclose to a debtor or an alleged debtor, on each contact, that the collection agency to which the delinquent account will be referred, or said collection agency which is contacting a debtor or an alleged debtor, is an operating division of the respondents’, and is not an independent bona fide collection agency unless in fact said collection agency is an independent, bona, fide collection agency. 14. Representing, either directly or indirectly, that legal action may be instituted unless respondents in good faith intend to institute legal action against each delinquent debtor or alleged debtor to whom such representation is made; or misrepresenting, PERFECT FILM & CHEMICAL CORP., ET AL. 1001 Decision and Order .

in any manner, the action or results of any action which may be taken to effect payment of any such account or debt or alleged debt.

15. Contracting for any sale in the form of a subscription contract or other purchase agreement which shall become binding on the purchaser prior to a period of time not less than 72 hours after the date of signing by the purchaser. 16. Failing to disclose orally prior to the time of sale, and in writing on any subscription contract or other agreement with such conspicuousness and clarity as will be likely to be observed and read by such purchaser, that the purchaser may rescind or cancel the sale by directing or mailing a notice of cancellation to residents’ address prior to 72 hours after the date of signing by the purchaser.

17. Failing to provide either on the contract or on a- separate sheet a clearly understandable form which the purchaser may use as a notice of cancellation.

18. If coupon books are used, failing to include with each coupon book furnished to a subscriber :

(a) A legend, on the cover, stating “check the number of coupons in this book and their amounts against your original subscription contract: (See Page 1).”

(b) A statement, on the first separate inside page, showing the total. number of coupons in the book, the dollar amount of each ‘such coupon and the total dollar amount of all such coupons;

(c) The address, on the first separate inside page, of Keystone Readers’ Service, Inc., its successors or assigns. . . 19. Failing to furnish to each subscriber at the time of his signing of the subscription contract a duplicate original of the contract showing the exact number and name of the magazines or other publications to which the purchaser 1 is subscribing; the number of issues for each, and the total price for each magazine and for all such magazines: Provided, however, AS an alternative, the price for each magazine may ‘be furnished on a separate schedule attached’ to each of said contracts. , 20. Failing to furnish with each coupon book initially provided to gach | subscriber, a copy of the original sales contract. 21. Substituting, requesting substitution or permitting. substition, except at the request of the customer, at any time during the collection period of the contract, of any magazine or publication for any magazine or publication covered by the contract Decision and Order 78 ¥F.T.C.

without first providing the subscriber an option in writing, as stated in the subscription contract, to reduce his future payments by the pro rata portion of the remaining payments due on the cancelled magazine or other publication. Provided, That respondents may offer to those subscribers with paid-in-full contracts an option to either lengthen already existing subscriptions or to select from among all of respondents’ then currently offered magazines or publications, a magazine or publication as a substitute for the remaining period of the subscription. 92. Failing or refusing to cancel, at the subscriber’s request, all or any portion of a subscription contract whenever respondent in good faith finds that any misrepresentation prohibited by this order has been made.

23. Failing to clearly, conspicuously, and adequately designate and disclose both orally, and in writing on the subscription contract, on the same side of the page and above or adjacent to the place for the customer’s signature :

(a) The total cash price, (b) The downpayment, (c) The unpaid balance of the cash price, (d) The amount financed, if any, (ec) The rate of the finance charge, if any, expressed as the annual percentage rate, and (£) The number, amount, and due rates or period of payments scheduled to satisfy the payment of the contract: 24, Furnishing or otherwise placing in the hands of others the means and instrumentalities by and through which the public may be misled or deceived in the manner or by the acts and practices prohibited by this order.

II It is further ordered: - (a) That respondents herein deliver, or have delivered, a copy of this decision and order, or the contents of this decision ‘and order, to each of their present and future dealers or franchisees, licensees, employees, salesmen, agenis, solicitors, independent contractors, or other representatives who sell, promote or distribute the products or services included in this order. (b) That respondents herein deliver or have delivered to each person so described in Paragraphs (a) above a form clearly stating his intention to be bound by and to conform his business PERFECT FILM & CHEMICAL CORP., ET AL. 1003 990. Decision and Order practices to the requirements of this order which shall be forwarded to the respondents.

(c) That respondents inform or have informed all such present and future dealers or franchisees, licensees, employees, salesmen, agents, solicitors, independent contractors, or other representatives who sell, promote or distribute the products or services included in this order that the respondents shall not use any third party, or the services of any third party for the solicitation of magazine subscriptions unless such third party agrees that it will be bound by the provisions contained i in this order and the respondents are so informed.

(d) If such party will not so agree and the respondents and the Commission are not so informed then the respondents shall not use such third party or the services of such third party to solicit subscriptions.

(e) That respondents so inform or have informed the persons so engaged that the respondents are obligated by this order to discontinue on their own the deceptive acts or practices prohibited by this order.

(f) That respondents institute a program of continuing surveillance to reveal whether the business operations of each of said persons so engaged conform to the requirements of this order: and g) That respondents upon receiving information or knowledge from any source concerning two or mere bona fide complaints prohibited by this order against any franchisee, his employees or agents during any one-month period will be responsible for either ending “said practices or securing the termination of the franchisee or the employment of the offending employee or agent.

Lt is further ordered, That respondents herein shall notify the Commission at least 30 days prior to any proposed change in any of the corporate respondents such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution which may affect compliance obligations arising out of the order.

It is further ordered, That 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. Complaint 78 ETC.