Gulf Coast Distributors & Acceptance Corporation

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

reason to believe that.

, Commission, having eptance. Corporation, a corporation, and Maur Complaint 80 F.T.C.

acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. His 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 various books, including encyclopedias named “The New Standard Encyclopedia,” the “Negro Heritage Library” and other products to the public.

_ Par. 3. In the course and conduct of their business as aforesaid, respondents now distribute and for some time in the last past have distributed said books, including the “New Standard Encyclopedia,” the “Negro Heritage Library,” and other products, when sold, to purchasers residing in various States of the United States, and maintain and have maintained a substantial course of trade in said’ books and other products in commerce, as “commerce” is defined in the Federal Trade Commission Act.

Par. 4. In the course and conduct of their aforesaid business, respondents now are, and at all times mentioned herein have been, engaged in substantial competition with corporations, firms and individuals m ithe sale of books and other products of the same general kind and nature as those sold by respondents. Par. 5. In the course and conduct of the aforesaid business respondents sell said books and other products, at retail to the general public. Sales are made by respondents’ sales representatives who contact prospective purchasers in their homes. Respondents have formulated, developed and carried out a plan for the purpose of inducing the sale of said books and other products and have trained their sales representatives to use a sales presentation and materials in connection therewith and instruct them to use and follow same.

In the course of said sales presentation respondents and their sales representatives have made certain oral statements and representations concerning the newness, quality, and price of said books and other products. In addition to the foregoing, respondents and their sales representatives, prior to and during said sales presentations utilize or display certain materials furnished, approved, or ratified by the respondents, for the purpose of obtaining sales leads and inducing the purchase of said books and other products. Typical and illustrative of materials used by respondents in order to obtain sales leads is a 3” x 5” cardboard card which respondents cause to be disseminated in grammar schools and other public places _mpUATONAD MATE I a FREE ica ( LN ANALYSIS OF OL REQUIREMENTS.

presentations, ‘respondents! sales representatives ‘right hand corner. 0:

- ‘During: their ‘sales act. in Bee utilize an “installment: contr:

said. contract, across: from the : Jew Standard Encyclop L : Inscribed therein and display’ s: ‘te mended. b D. 12 ‘a government 1 age oe oO That 2 mondents O° conducting Pe oe fide contests to determine the ident ( e books and other products ¢ a8 prize bona fide ra gs sons chgible & to ‘receiv e.

» the public generally selected group.

edia such as “The N, ew Standard WU a aN We ee ee ey . —weu 229 Complaint (2) Respondents’ offer of said books and other products is not a special introductory or reduced price, nor is it limited to any selected group, é.e., students. To the contrary, it has been offered and is being offered to the general public in the regular course of respondents’ business.

(3) Certain of the books and other items included with the sale of an encyclopedia to purchasers are not free of cost, or at a specially reduced price, or the case may be. To the contrary, the cost of all such items is included in the contract price. Further, purchasers pay the full price for all books purchased from the respondents.

(4) The price, terms and conditions of said offers are not limited to the time when the call is made on the prospective purchaser. Therefore, the statements and representations referred to in Paragraph Eight hereof, were and are false, misleading and deceptive. Par. 10. In the further course and conduct of their business, respondents, in an attempt to collect what they elected to treat as delinquent accounts, respondents have represented directly or by implication, that the failure of a customer to remit payment will result in legal action by respondents’ attorney. Par. 11. In truth and in fact, respondents rarely, if ever, in the normal course of their business, forward accounts to an attorney for the purpose of instituting legal proceedings. Therefore, respondents’ statements and representations referred to in Paragraph Ten hereof, were and are false, misleading and deceptive.

Par. 12. In the further course and conduct of their business and in furtherance of their purpose of inducing the purchase of said books and other products by the general public, respondents and their sales representations have engaged in the following additional acts and practices.

In a substantial number of instances, the books and other products offered for sale and sold by respondents, have been used editions, old editions, or editions no longer in print. In such instances, respondents and their sales representatives, have represented, directly or by implication, that said books and other products were new, or were the latest editions, and have failed to disclose the material fact that said books and encyclopedias were used, or were old editions, or were no longer in print, as the case may be. The aforementioned books and other products shown to prospective customers have the appearance of being new. When represented to be new, or in the absence of a disclosure that they were used, the said books are Decision andi Order 80 F.T.C.

readily accepted by the public as being new, a fact of which the Federal Trade Commission takes official notice. The Commission also takes official notice of the fact that there is a preference by the purchasing public for new books over used books. Therefore, respondents’ statements, representations, acts and practices, and their failure to disclose material facts, as set forth herein were, and are, unfair, false, misleading, and deceptive acts and practices.

Par. 13. The use by respondents and their sales representatives, of the aforesaid unfair, false, misleading and deceptive statements, representations, acts 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. books and other 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 incurred.

Par. 14. The aforesaid acts and practices of the respondents, as herein alleged, were, and are, all to the prejudice and injury to 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 Orprer The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; 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 aforesaid draft of complaint, 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 alleged in such complaint, and waivers and other provisions as required by the Commission’s rules; and

os or other “products Ofte -proval or sanction, of effect at the time of said off ae Representing, | ire ‘ . - Eee of te third aay, orl:

statement | on the 1a with such is. contract you will be purchased by a pank ;

1b. Contracting for any | sale, 1 es contract, ‘promissory acceptance, condit jonal sal the buyer: prior: to mic wise, which shall become pinding on uding Sundays a and. legal bole) ane ee ‘or services, , signe fe) partnership: or any :

obligations arising out.