Fashion Floors, Inc

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IN THE MATTER 0.' FASHION FLOORS, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF Tile FEDERAL TRADE COMMISSION AND TEXTILE FIBER PRODUCTS IDENTIFICATION ACTS lJocket 8982. Complaint, July 197.-Decision, May, 1975 Consent order requiring a Beltsvile, Md., retailer, distributor and installer of carpeting and other floor coverings, among other things to cease misrepresenting its prices; failng to maintain adequate records; misrepresenting the qualifications and abilities of its sales personnel; and misbranding or mislabeling its textile fiber products and using fiber trademarks improperly. Appearames For the Commission: Everette E. Thnmas, Richard F. Kelly and Richard C. Donohue.

For the respondents: Glen A. Mitchell, StRin, Mitchell Mezines Wash., D. C.

COMPLAINT Pursuant to the provisions of the f'ederaTrade Commssion Act and the Textile Fiber Products Identifieation Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Fashion Floors, Ine., a eorpration, and Donald F. Riesett, individually and as an offeer of said eorpration hereinafter sometimes referred to a" respondents, have violated the provisions of said Acts, and the rules and regulations promulgated under the Textile Fiber Products Identifcation 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:

PARAGRAPH 1. Respondent fashion Floors, Ine. is a corporation organied, existing and doing business under and by virtue of the laws of the Commonwealth of Virginia, with its principal offee and place of business located at 10730 Baltimore Ave., Beltsville, Md. FASHION FLOORS, INC., ET AL. 821 820 Complaint Respondent Donald F. Riesett is an individual and is the principal offeer of the corporate respondent. He formulates, directs and controls the acts and practices of the corporate respondent, ineluding the acts and practices hereinafter set forth. His 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, distribution and installation of eareting and floor coverings to the public. COUNT I Alleging violation of Section 5 of the Federal Trade Commission Act the allegations of Paragraphs One and Two hereof are ineorprated by reference in Count I as if fully set forth verbatim. PAR. 3. In the course and conduct of their business as aforesaid respondents have caused, and now cause, the dissemination of certain advertisements eonceming the aforesaid eareting and floor coverings, by varous means in commerce, as "commerce" is defined in the Federal Trade Commission Act, ineluding, but not linrted to, advertisements inserted in newspapers of interstate circulation for the purpose of inducing and wlUeh were likely to induce, directly or indirectly, the purchase of respondents' said merchandise. In the further course and eonduet of their business, as aforesaid respondents have caused, and now cause, their said merchandise to be shipped across State lines between their varous retail outlets located in the Commonwealth of Virginia and State of Marland, for sale to purehasers thereof located in the aforesaid States. Thus, respondents maintain, and at aU times mentioned herein have maitaned, a substantial course of trade in commerce commerce" is defined in the Federal Trade Commssion Act.

PAR. 4. In the course and conduct of their aforesaid business, and for the purpose of inducing the purchase of their earpting and floor coverings, respondents have made, and are now making, numerous statements and representations by repeated advertisements inserted in newspapers of interstate eireulation, and by oral statements and representations of their salesmen to prospective purehasers with respect to their products and services.

Typieal and ilustrative of said statements and representations, but not all-ine1usive thereof, are the following: 8 hr. $50 00 CLEARANCE Savings of 20% to 500/v Carpts & Rugs Complaint 85 F.

Washington s Birthday Warehouse Sale 25% to 40% Savings Carpets & Rugs Fabulous $100 000 WAREHOUSE RUG SALE COMPo AREA VALUE CLEARANCE SALE $150 $29 $151 $63 YOU GET: Cerlified installation by car -et craftsmen who live up to their reputation- WE CARE"

EASY CREDIT TERMS AVAILARU;

EASY CREDIT TERMS PAR. 5. By and through the use of the above-quoted statements and representations, and others of similar import and meaning but not expressly set out herein, separately and in connection with the oral statements and representations of respondents' salesmen to customers and prospective customers, respondents have represented, and are now representing, directly or by implication, that: 1. By and through the use of the word "SALE," and other words of similar import and meaning not set out specifcally herein, said earpting and floor coverings may be purchased at reduced prices, and purehasers are thereby afforded savings from respondents' reguar selling prices.

2, Purehasers of respondents' earpet remnants are afforded savings of 25 to 50 percent off the prices at which such earpt remnants are usually and eustomarly sold at retail.

3. By and through the use of the words "Comp. Ara Value" and other words of similar import and meaning not set out specifically herein, said comparative value is the price at which the same carpt remnants are being offered for sale by a substantial number of the principal outlets in respondents' trade area. 4. By and through the use of the words "Certified installation by carpt eraftsmen" and other words of similar import and meaning not set out specifically herein, respondents offer to the prospective .. ... .. , ... .. .

820 Complaint customer the servees of eart installers who have received eertifcation by a reeogned institution or governent lieensing agency. 5. By and through the use of the words "Easy Credit Terms" and Easy Credit Terms Available " purhasers of their products are granted easy eredit terms, without reg-ard to their financial status or ability to pay, by financial institutions with which the respondents deal. PAR. 6. In truth and in fact:

1. Respondents' merchandise is not being offered for sale at reduced prices. To the eontra, in a substantial number of instances the respondents have not established a regular sellng price, and their so-ealled advertised "sale" price is used to mislead prospective customers into believing there is a saving from a bona fide reguar selling price.

2. Purehasers of respondents' earpt remnants are not afforded savings of 25 to 50 percent off the prices at which such eart remnants are usually and customarly sold at retail. To the eontrar, the percentage price eomparson is based on prices for quantities of carpeting required for wall-to-wall instalation rather than the advertised earpt remnants or rugs which are usually sold for less than wall-to-wall prices.

3. The same earet remnants are not offered for sale at the comparative price by a substantial number of the prieipal outlets in respondents' trade area.

4. Respondents' installers have not received eertifeation by a recogned institution or government licensing agency. 5. Puehasers of respondents' products are not grted easy eredit terms, without regard to their financial status or ability to pay, by financial institutions with which respondents deal. Therefore, the statements and representations as set forth in Paragraphs Four and Five hereof, were and are false, mislearng and deceptive.

PAR. 7. In the course and eonduet of their aforesaid business, and at all times mentioned herein, respondents have been, and now are, in substantial competition in commerce, with corprdtions, firms and floorindividuals in the sale and distribution of rugs, cating, coverings servees of the same KCneral kid and nature as those sold by respondents.

PAR. 8. The use by respondents of the aforesaid false, misleading and deceptive statements, representations, acts and practices, has had, and now has, the eapaeity and tendeney 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 Complaint 85 F.T.

into the purchase of substantial quantities of respondents' products and services by reason of said erroneous and mistaken belief. PAR. 9. The aforesaid acts and praetiees of respondents, as herein alleged, were and are all to the prejudice and injury of the public and of respondents' eompetitors and constituted, and now constitute, unfai methods of competition in eommeree and unfai and deceptive acts and prd.ctices in commerce in violation of Section 5 of the Federal Trade Commission Act.

COUNT II Alleging violation of the Textile Fiher Products Identifcation Aet and the implementing Rules and Regulations promulgated thereunder and of the Federal Trade Commssion Aet, the allegations of Paragraphs One and Two hereof are ineorprd.ted by reference in Count II as if fully set forth verbatim.

PAR. 10. Respondents are now, and for some time last past have been engaged in the introduction, delivery for introduction, sale, advertising, and offering for sale, in commerce, and in the transportation or causing to be transported in eommeree, of textile fiber products including careting and floor covering and have sold, offered for sale, advertised delivered, transported and caused to be transported, after shipment in commerce, textile fiber products, which have been advertised or offered for sale in eommeree; and have sold, offered for sale advertised, delivered, trd.nsported and caused to be transported, after shipment in commerce, textile fiher products, either in their original state or contained in other textile fiher products, as the term commerce" and "textile fiber product" are defined in the Textile Fiber Products Identifeation Act.

PAR. 11. Certn of said textile fiher products were misbrd.nded by respondents within the intent and meang of Section 4(a) of the Textile Fiber Products Identifieation Act and of the rules and regulations promulgated thereunder, in that they were falsely and deceptively advertised, or otherwise identifed as to the name or amount of eonstituent fibers eontaned therein. Among such misbranded textile fiher products, but not limited thereto, were floor coverings which were falsely and deceptively advertised in The Washington Post and The Evening Star newspapers published in the District of Columbia, and having a wide eireulation in the District of Columbia and varous States of the United States, in that the respondents in disclosing the fiher content information as to floor leave rings containing exempted backings, fillings, or paddings, failed to set forth such fiber content information in such a manner as to , !"A::ttlUl'1 1" LoVV.L .. h.

820 Decision and Order indicate that it applied only to thc face, pile, or outer suraee of the floor coverings and not to the exempted baekings, fillings, or paddings. PAR. 12. By means of the aforesaid advertisements and others of similar import and meaning not specifeally referred to herein, respondents have falsely and deceptively advertised textile fiber products in violation of the Textile Fiber Products Identifeation Act in that said textie fiber products were not advertised in aecordanee with the rules and reguations promulgated thereunder by reason of the fact that in disclosing the fiber content information as to floor coverings containing exempted backings, fillngs, or paddings, such disclosure was not made in such a manner as to indicate that such fiber content information related only to the face, pile or outer surface of the floor covering and not to the baeking, fillng or padding, in violation of Rule 11 ofthe aforesaid rules and regvlations.

PAR. 13. The acts and pratices of respondents as set forth above were, and are in violation of the Textile Fiber Products Identification Aet and the rules and regulations promulgated thereunder, and constituted, and now constitute, unfai and deceptive acts and practices, in eommeree, and unai methods of competition, in commerce, under the Federal Trde Commission Act. Commssioner Thompson dissenting for the reason that no evidence of consumer injur having been shown to him, he is not persuaded that this litigation is a sound use of the taxpayer's money. DECISION AND ORDER The Commission having heretofore determed to issue its complaint charging the respondents named in the caption hereto with violation of the Federal Trae Commission Aet, and the respondents having been served with notice of said determination and with a copy of the eomplait the Commission intended to issue, together with a proposed form of order; and The respondents and eounel for the Commission having thereafter executed an agreement eontaning a consent order, an admssion by the respondents of all the jurisdictional facts set forth in the complaint to issue herein, statement that the signg of said agreement is for settlement purpses only and does not constitute an admssion by respondents that the law has been violated as alleged in such complaint and waivers and other provisions as require by the Commssion rules; and The Commission having considered the agreement and having provisionally accepted same, and the agreement eontaning consent order having thereupon been placed on the public record for a period of sixty (60) days, now in furher conformty with the procedure ';RQ. 7QQ 0- 7G - 53 Decision and Order 85 F. prescribed in Section 2.34(b) of its rules, the COnmssion hereby issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order: 1. Respondent Fashion Floors, Ine. is a corporation organied existing and doing business under and by virue of the laws of the Commonwealth of Virginia, with its office and principal place of business located at I0730 Baltimore Ave., Beltsville, Md. Respondent Donald F. Riesett is an offieer of said corporation. He formulates, directs and controls the acts and practices of the corporate respondent, and his principal office and place of business is located at the above stated address.

2. The Federal Trade COnmssion has jursdietion of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents Fashion Floors, Ine., a eorpration, its sueeessors and assigns, and its officers, and Donald F. Riesett individually, and as an offcer of said eorpration, and respondents' agents, representatives, and employees, directly or through any corporation, subsidiar, division or other device, in connection with the advertising, offering for sale, sale, distribution or installation of careting and floor coverings, or any other article of merchandise, in commerce, as "commerce" is defined in the Federal Trde Commission Act, do forthwith cease and desist from:

1. Using the word "Sale " or any other word or words of similar import or meaning not set forth speeifealy herein unless the price of such merchandise, being offered for sale constitutes a reduction, in an amount not so insignficant as to be meaningless, from the actual bona fide price at which such merchandise was sold or offered for sale to the public on a reguar basis by respondents for a reasonably substatial period of time in the recent, regular eoure of their business. 2. (a) Representing, directly or indirectly, oraly or in wrting, that by purchasing any of said merchandise or servces, customers are afforded savings amounting to the difference between respondents' stated price and respondents' former price unless such merchandise or servces have been sold or offered for sale in good faith at the former price by respondents for a reasonably substantial period of time in the recent, regular eoure of their business.

(b) Representing, directly or indieetly, o,.ally or in wrting, that by purchasing any of said merchandise or servees, customers are afforded 820 Decision and Order savings amounting to the difference between respondents' stated price and a compared price for said merchandise or services in respondents trade area unless a substantial number of the principal retail outlets in the trade area regularly sell said merchandise or servees at the compared price or some higher price.

(c) Representing, directly or indirectly, orally or in wrting, that purchasing any of said merchandise or servees, customers are afforded savings amounting to the difference between respondents' stated price and a compared value price for comparable merchandise or servees unless substantial sales of merchandise of like grade and quality are being made in the trade area at the compared price or a higher price and unless respondents have in good faith conducted a market survey or obtained a similar. representative sample of prices in their trade area which establishes the validity of said compared price and it is clearly and conspicuously disclosed that the eomparson is with merchandise or servees oflike grade and quality.

3. Advertising or otherwse representing a compared value price for carpet remnants or rugs (a) unless the eart remnants or rugs being advertised are of the same grade and quality as the earts with which such advertised prices are compared; and (b) without disclosing in immediate eonjunction therewith that the earet remnants or rugs are usually sold for less than wall-to-wall prices, and that the compared value is based on the wall-to-wall price of eareting of the same grade and quality.

4. Representing, directly or by implication, orally or in wrting, that purehasers of respondents' merchandise will save any stated dollar or percentage amount without fully and eonspieuously disclosing, in immediate eonjunetion therewith, the basis for such savings representations.

5. Failing to maintain and produce for inspeetion or copying for a period of three (3) years, adequate reeords (a) which disclose the facts upon which any savings claims, sale claims and other similar representations as set forth in Paragrphs One, Two, and Four of this order are based, and (b) from which the validity of any savings claims, sale claims and similar representations ean be detenmned. 6. Representing, directly or by implication, orally or in wrting, that respondents' installers have received certifieation by a recognized institution or government licensing agency; or misrepresenting in any manner, the training, certification, or qualcations of any of respondents' employees, agents, or representatives. 7. Representing, directly or by implication, orally or in wrting, that purehasers of respondents' products are granted easy or assured eredit terms by financial institutions with which respondents deal; or Decision and Order 85 F. misrepresenting, in any manner, the amount, typ, extent or any other faeet of the eredit terms respondents arange or may ar,mge for their purehasers.

II.

It is further ordered That respondents Fashion Floors, Ine., a corporation, its sueeessors and assigns, and its officers, and Donald F. Riesett, individually and as an offeer of said corporation, and respondents' agents, representatives, and employees, directly or through any corporation, subsidiar, division or other device, in connection with the introduction, sale, advertising, or offering for sale in eommeree, or the transportation or causing to be transported in eommeree of any textile fiber product; or in connection with the sale offering for sale, advertising, delivery, transporttion or causing to be transported, of any textile fiber product which has been advertised or offered for sale, in commerce; or in connection with the. sale, offering for sale, advertising, delivery, transportation, or causing to be transported, after shipment in eommeree, of any textile fiber product whether in its original state or contained in other textile fiber products as the tenns "commerce" and 'textile fiber product" are defined in the Textile Fiber Products Identifcation Aet, do forthwith cease and desist from:

1. Misbranding textile fiber products by falsely or deceptively stamping, tagging, labeling, invoieing, advertising or otherwse identifying such products as to the name or amount of the eonstituent fibers contained therein.

2. Falsely and deceptively advertising textile fiber products by: (a) Making any representations by disclosure or by implication, as to fiber content of any textile fiber product in any wrtten advertisement which is used to aid, promote or assist, directly or indieetly, in the sale or offering for sale, of such textile fiber product unless the same information required to be shown on the stamp, tag, label or other means of identifieation under Seetion 4(b)(1) and (2) of the Textile Fiber Products Identifieation Act is contained in the said advertisement, except that the percentages of the fibers present in the textie fiber product need not be stated.

(b) Failing to set forth in advertising the fiber content of floor covering containing exempted baekings, filigs or paddigs, that such disclosure related only to the face, pile or outer surace of such textile fiber products and not to the exempted baekings, filings or paddings. (e) Using a fiber trademark in advertising textile fiber products without a full disclosure of the required fiber content information in at least one instance in said advertisement.

FASHION FLOORS, INC., ET AL. 829 820 Decision and Order (d) Using a fiber trademark in advertising textile fiber products containing only one fiber without such fiber trademak appearing at least once in the advertisement, in immediate proximity and eonjunetion with the generic name of the fiber, in plainly legible and conspicuous type.

It is further orrred That respondents shall maintain for at least a one (1) year period, following the effective date of this order, copies of all advertisements, including newspaper, radio and television advertisements, direct mail and in-store solicitation literature, and any other such promotional material utilized for the purose of obtaining leads for the sale of carpeting or floor coverings, or utilized in the advertising, promotion or sale of eareting or floor coverings and other merchandise.

It further ordered That respondents, for a period of one (1) year from the effective date of this order, shall provide each advertising agency utilized by respondents and each newspaper publishing company, television or radio station or other advertising media which is utilized by the respondents to obtain leads for the sale of earting or floor coverings and other merchandise, with a copy of the Commission News Release setting forth the tenn of this order. It is further ardered That respondents notify the Commssion at least thirty (30) days prior to any proposed change in the eorprate 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 eomplianee obligations arising out of the order. It is further ardeed That respondents shall forthwith distribute a copy of this order to each of their operating divisions. It is further ardered That respondents deliver a copy of this order to all present and future personnel of respondents engaged in the sale, or the offering for sale, of any product, in the eonsummtion of any extension of consumer credit or in any aspect of prepartion, creation or placing of advertising, and secure a signed statement acknowledging receipt of said order from each such person. It is further arred That the individual respondent named herein promptly notify the Commssion of the diseontinuanee of his present business or employment and of his affiliation with a new business or employment. Such notice shall include respondent' s current business address and a statement as to the nature of the business or employment in which he is eng'.iged as well as a description of his duties and responsibilities.

It is further arred That the respondents herein shall within sixy (60) days after servee upon them of this order, fie with the 830 FBDBRAL TRADE COMMISSION DECISIONS Order 85 F.

Commssion a report, in writing, setting forth in detail the manner and form in which they have complied with this order.