Trailer Coach Association

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

_IN THE MATTER OF TRAILER COACH ASSOCIATION, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2572. Complaint, Oct. 8, 1974—Decision, Oct. 8, 1974 Consent order requiring an Anaheim, Calif., trade association representing manufacturers, component suppliers, and dealers of mobile homes and recreational vehicles, among other things to cease making representations as to energy use or energysaving characteristics of their recreational vehicles or as to the supply or availability of gasoline without having a reasonable basis for such claim. Appearances For the Commission: Gregory L. Colvin.

For the respondents: James P. Watson, Voegelin & Barton, Los Angeles, Calif.

COMPLAINT The Federal Trade Commission, having reason to believe that Trailer Coach Association, a corporation, and Louis C. Bell, individually and as president of said corporation, hereinafter sometimes referred to as respondents, have violated the provisions of the Federal Trade Commission Act, and that a proceeding in respect thereof would be in the public interest, hereby issues this complaint:

PARAGRAPH 1. Trailer Coach Association is a trade association organized, existing and doing business as a nonprofit corporation under the laws of the State of California, with its office and principal place of business at 3855 East La Palma Avenue, Anahein, Calif. Complaint 84 F.T.C.

Louis C. Bell is the president of Trailer Coach Association. He formulates, directs and controls the policies, acts and practices of said corporation, including those hereinafter set forth: His business address is the same as that of Trailer Coach Association. Par. 2. The corporate respondent was organized and is maintained for the purpose of promoting, fostering and advancing the interests of its members, who consist of manufacturers, component suppliers, and dealers of mobile homes and recreational vehicles, including but not limited to travel trailers, motor homes, van conversions, truck campers and camping trailers. Respondents have been and are now engaged ina wide range of activities of mutual interest and pecuniary benefit to the members of the corporate respondent, including the dissemination of advertising material designed to promote the sale of recreational vehicles. Allegations stated below in the present tense include the past tense.

Par. 3. The corporate respondent maintains offices in California and Oregon, and its members are located primarily in eleven western States of the United States. In the course of their business, respondents cause various documents, monies, communications and promotional materials to be transmitted to and from the corporate respondent’s offices, its members’ offices, retail sellers of recreational vehicles, and other business entities located in many different States of the United States. Furthermore, respondents advertise and cause the dissemination of advertisements in media of interstate circulation. Respondents maintain a substantial course of trade in commerce, as “commerce” is defined in the Federal Trade Commission Act.

Par. 4. In the course of their business, respondents disseminate and cause to be disseminated numerous representations concerning energy saving and energy use characteristics of ownership and operation of recreational vehicles. Typical and illustrative of these respresentations, but not all inclusive thereof, are the representations which appear in the following newpaper advertisement disseminated by respondents beginning in July 1973: [See p. 715 herein.] Par. 5. Through the use of such advertisements, and others not specifically set out herein, respondents have represented, directly or by implication, that:

A. Any family on vacation in a recreational vehicle will save close to eighty percent of the energy the family would use while living at home during the same period of time:

1. Regardless whether the computation of energy consumption is made separately for electricity, natural gas, or for the aggregate total of all forms of energy consumed, including gasoline; ae) Complaint Sp, ["|/GATIONING SS. * CMINC 2s eS MULE AFA | Pron VISIT YOUR NEAREST : TRAILER COACH ASSOCIATION ME MBER DEALER 716 FEDERAL TRADE COMM ISSION DECISIONS Complaint 84 F.T.C.

2. Regardless of the size and type of recreational vehicle and the nature and extent of its accessory equipment; 3. Regardless of the season, duration, and number of miles traveled on the vacation;

4. Regardless of the region of the United States in which the family lives and/or vacations; and 5. Regardless whether or not the family Operates its recreational vehicle, home, automobiles, and other energy-consuming possessions in the family’s customary or usual manner. , B. With the anti-pollution equipment on 1973 cars, there is little difference in fuel economy between a 1973 sedan, a medium-sized motor home, and a car towing an average travel trailer. C. For most families, there is not significant difference in the fuel F. At the time the representations -were disseminated, gasoline was readily available throughout the country.

G. An increase in the proportion of families taking recreational vehicle vacations will actually conserve energy, including gasoline, and will assure the continued availability of gasoline and other forms of energy. H. If only half the families in the United States would take a motor Par. 6. At the time the representations set forth in Paragraph Five were made, respondents had no reasonable basis from which to conclude that such representations were true. ;

Therefore, the advertisements and representations referred to in Paragraphs Four and Five were and are deceptive and unfair. Par. 7. Respondents’ use of the aforesaid deceptive and unfair adver- 713 Decision and Order .

Par. 8. Respondents’ aforesaid acts and practices are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act. ‘ DECISION AND ORDER The Federal Trade Commission having initiated and 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 Seattle Regional Office 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 The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public. record for a period of sixty days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: a 1. Respondent Trailer Coach Association is a trade association organized, existing and doing business as a nonprofit corporation under the laws of the State of California with its office and principal place of business located at 3855 East La Palma Avenue, Anaheim, Calif. Respondent Louis C. Bell is president of Trailer Coach Association. 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 matter of this proceeding and of the respondents, and the proceeding is in the public interest.

Decision and Order 84 F.T.C.

ORDER agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, promotion, offering for sale, sale, or distribution of recreational vehicles, including but not limited to travel trailers, motor homes, van conversions, truck campers and camping trailers, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Making any representation, directly or by implication, as to energy use or energy Saving characteristics or ownership or operation of any recreational vehicle or vehicles, or as to the supply or availability of gasoline or any other form of energy;-unless, at the time the representation is made, respondents have a reasonable basis for such representation, consisting of tests or surveys a. based on reliable data and adhering to generally accepted statistical principles, b. which shall fully and completely substantiate the representation, and c. the results and methodology of which, together with the original data collected, are available for public inspection and condensed in a report written in terms understandable to the average consumer, at each of respondents’ offices. 2. Making any representation, directly or by implication, as to energy use or energy Saving characteristics of ownership or operation of any recreational vehicle or vehicles; unless respondents clearly and conspicuously disclose, in immediate conjunction with the representation:

a. The specific forms of energy referred to, unless the representation applies to total consumption of all forms of energy . by the consumer or family.

b. The particular type and size of recreational vehicle to which the representation applies, and the nature and extent of accessory equipment, unless it applies to all types and sizes of such vehicles regardless of accessory equipment installed. c. The particular locations and conditions of use, including but not limited to the Season, duration, and number of miles traveled, to which the representation applies, unless it applies 113 Decision and Order to all conditions of use and to all locations and regions in the United States.

d. The specific manner of operation of the recreational vehicle, home, automobiles, and other energy-consuming possessions to which the representation applies, unless it applies to the customary or usual manner of operation of all such possessions by the average consumer or family.

It is further ordered, That respondents forthwith deliver, to all persons and firms which respondents know or have reason to know may engage in dissemination of representations originated or distributed by respondents since June 1, 1973, as to energy use or energy saving characteristics of ownership or operation of recreational vehicles, or as to the supply or availability of gasoline or any other form of energy, 4 notice containing the following information, without mitigation: 1. The energy-related representations contained in the referenced advertising have been the subject of an investigation by the Federal Trade Commission, which has resulted in the entry of a consent order directing that distribution of the referenced advertisments be restricted.

2. At the time the energy-related representations were made, Trailer Coach Association did not have adequate substantiation to support such representations.

3, Trailer Coach Association has been ordered by the Federal Trade Commission to cease and desist from making energy claims related to recreational vehicles unless Trailer Coach Association can support such claims with reliable and statistically valid tests or surveys.

4, None of the energy-related representations originated or distributed by Trailer Coach Assoication since June 1, 1978, and no materials containing such representations, are to be further disseminated to the public or others until such time as respondents certify in writing to such person or firm that Trailer Coach Association is in possession of the substantiation required by this order. 5. Further dissemination by the person or firm of such representations without the certification required above may constitute a violation of the Federal Trade Commission Act by the person or firm itself.

It is further ordered, That respondents shall maintain complete records relative to the manner and form of their compliance with this order, and shall retain each record for three years after such record is made. Such records shall include all advertising, promotional material, the basis for all applicable advertising claims, correspondence with Complaint 84 F.T.C.

persons who formulate or place advertising, and other pertinent documents.

ment acknowledging receipt of said order.

It is further ordered, That respondents notify the Commission at least thirty 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 this order.

It is further ordered, That the individual respondent named herein promptly notify the Commission if he discontinues his present business or employment and if he affiliates with another business or employment related to the promotion, sale or distribution of recreational vehicles. Such notice shall include his current business address and a statement report setting forth in detail the manner and form of their compliance