U.S. Homes, Incorporated

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In roc Marrer or U.S. HOMES, INCORPORATED, ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2302. Complaint, Oct. 11, 1972—Decision, Oct. 11, 1972. Consent order requiring a Des Moines, Iowa, firm selling custom-built homes and/or “package homes,” among other things to cease representing that its products are guaranteed unless the nature, extent and duration of the guarantee and the identity of and the manner in which the guarantor will perform thereunder are clearly and conspicuously disclosed. w ComrLaINtT 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 U.S. Homes, Incorporated, a corporation, and Robert G. Sandler, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

Paracraru 1. U.S. Homes, Incorporated, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Iowa, with its principal office and place of business located at 5390 Second Avenue, Des Moines, Iowa.

Respondent Robert G. Sandler, is an individual and an officer of the corporate respondent. He formulates, directs and controls the acts wnd practices of the corporate respondent, including the acts and pracices hereinafter sect forth. His address is the same as that of the cororate respondent.

Par. 2. Respondents are now, and for some time last past have been, gaged in the advertising, offering for sale, sale or distribution of tom built homes and/or “package homes” to the consuming public. ‘sp. 3. In the course and conduct of their business as aforesaid, ondents now cause, and for some time last past have caused their products, when sold, to be shipped from their place of business in ‘tate of Iowa to purchasers thereof located in various other States , United States and maintain, and at all times mentioned herein naintained, a substantial course of trade in said products in com- U.S. HOMES, INC., ET Au, 3 Decision and Order verce, as “commerce” is defined in the Federal Trade Commission Act. eo Par. 4. In the course and conduct of their aforesaid business, and for the purpose of inducing the purchase of their products, respondents have made in catalogs and advertising in general circulation, statements and representations with respect to guarantees on said homes and/or various parts thereof.

Typical and illustrative of said statements and representations are the following:

GUARANTEED FOR LIFE Your U.S. Home will be 100% Guaranteed * * * locks * * * are unconditionally guaranteed Lifetime Guaranteed Tub Lifetime Guaranteed Elements Par. 5. By and through the use of the aforesaid statements and representations, and others of similar import and meaning but not specifically set out therein, respondents have represented, directly or by implication, that their homes and/or various parts thereof are guaranteed without limitations or conditions.

Par. 6. In truth and in fact, respondents’ homes and parts thereof are not unconditionally guaranteed in every respect without conditions or limitations.

Therefore the statements and representations as set forth in Paragraphs Four and Five hereof were false, misleading and deceptive. Par. 7. The use by respondents of the aforesaid false, misleading and deceptive statements and representations has had 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 the products offered by respondents by reason of said erroneou and mistaken belief.

Par. 8. The aforesaid acts and practices of the respondents, as here alleged, were all to the prejudice and injury of the public and of spondents’ competitors and constituted unfair methods of competit in commerce and unfair and deceptive acts and practices in comm in violation of Section 5 of the Federal Trade Commission Act. . Decision and ORDER The Federal Trade Commission having initiated an investiga certain acts and practices of the respondents named in the hereof, and the respondents having ‘been furnished thereafte copy of a draft of complaint which the Bureau of Consume: .aJE COMMISSION DECISIONS Decision and Order 81 ¥F.T.

tion proposed to present to the Commission for its consideration anc 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 the respondents that the law has been violated as alleged in said complaint, and waivers and 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 2.34(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: 1. Respondent U.S. Homes, Incorporated, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Iowa, with its principal office and place of business located at 5390 Second Avenue, Des Moines, Iowa.

Respondent Robert G. Sandler is an individual and an officer of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation, and his business address is the same as that of said corporation.

2. The Federal Trade Commission has jurisdiction of the subject natter of this proceeding and of the respondents, and the proceeding 3 in the public interest.

ORDER 't is ordered, That respondents U.S. Homes, Incorporated, a cor- ‘ation, and its officers, and Robert G. Sandler, individually and as fficer of said corporation, and respondents’ agents, representatives, loyees, successors and assigns, directly or through any corporate her device, in connection with the advertising, offering for sale, r distribution of custom built homes and/or “package homes,” or products, in commerce, as “commerce” is defined | in the Fed- ‘ade Commission Act, do forthwith cease and desist from: tepresenting by any means, directly or by implication, that vondents’ products are‘ guaranteed unless the nature, extent duration of the guarantee, the identity of the guarantor and DANUBE CARPET MILLS, INu., - 608 Complaint the manner in which the guarantor will perform thereunder are clearly and conspicuously disclosed; and unless respondents promptly and fully perform all of their obligations and requirements, directly or impliedly represented, under the terms of each such guarantee. .

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

_ Lt is further ordered, That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered, That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.