Atlantic Industries, Inc

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

IN THE MATTER OF' ATLANTIC INDUSTRIES, INC. T/A ATLANTIC PORTRAIT PLAN, ETC., ET AL.

CONSENT ORDER, ETC" IN REGARD TO ALLEGED VIOLAnON OF' THE FEDERAL TRADE COMMISSION ACT Docket 8941. Complaint, Oct. 197J-Decision, May :28, 1975 Consent order requiring a Miami, Fla., marketer of a photographic enlargement plan and three wholly-owned subsidiaries, among other things to cease using deceptive means to sell its photographic enlargement plan and to collect accounts.

Appearances For the Commission: Edwo;rd J. Carnt and W. Roland Cam.pbell For the respondents: Hogan Hartson Wash., D. COMPLAINT - Pursuant to the provisions of the Federal Trade Commssion Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Atlantic Industries Inc., a corporation trading as Atlantic Portrait Plan and Atlantic Film Club, International Baby Care, Inc., Atlantic International Distributors, Inc., a corporation trading as Amalgamated Credit and Collection as National Bureau, National Direct Corporation, a corporation trading Advertised Products and International Album Plan, Jeffrey J. Weiss and Martin Osman, individually and as offcers of said corprations Lawrence Hahn, individually and as an officer of Atlantic Industries Inc., and Richard S. Labovitz, individually and as an officer of International Baby Care, Inc. and Atlantic International Distributors Inc., 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:

PARAGRAPH 1. Respondent Atlantic Industries, Inc., trading as Atlantic Portrait Plan, and Atlantic Film Club, is a corporation organized, existing and doing business under and by virtue of the laws 904 FF.DERAL TRADE COMMISSION DECISIONS Complaint 85 F.

of the State of Florida, with its principal office and place of business located at 720 N.W. 27th Ave., Miami, Fla.

Respondent is now and for some time last past has been engaged in the advertising, offering for sale; sale and distribution of photographs photograph albums, photograph enlargements, photograph certificates film and other merchandise to the public.

Trading as Atlantic Portrait Plan, respondents' primary effort is to sell a photograph enlargement plan. Under the plan, the customer is entitled to have a specified number of enlargements developed by respondents over a ten-year period. The customer pays a lump sum, often on credit, for the plan and receives a book of coupons which are redeemable for the enlargements. Said products are sold chiefly by door-to-door salesmen.

Respondent, trading as Atlantic Film Club, operates a fim processing service.

PAR. 2. Respondent International Baby Care, Inc. 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 at 720 N.W. 27th Ave., Miami, Fla. Respondent International Baby Care, Inc. is a wholly-owned subsidiar of respondent Atlantic Industries, Inc.

Respondent is now and for some tince last past has been engaged in the advertising, offering for sale, sale and distribution of baby furiture products to the public.

PAR. 3. Respondent Atlantic International Distributors, Inc., trading as Amalgamated Credit and Collection Bureau, is a corporation organized, existing and doing business under and by virtue of the laws of the State of florida. The corporate address is 720 N.W. 27th Ave. Miami, Fla. Respondent Atlantic International Distributors, Inc. is a wholly-owned subsidiary of respondent Atlantic Industries, Inc. Respondent Atlantic International Distributors, Inc. is now and for some time last past has been engaged in the collection of delinquent accounts for respondents Atlantic Industries, Inc. and International Baby Care, Inc.

PAR. 4. Respondent National Direct Corporation, trading as National Advertised Products and International Album Plan, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Florida, with its principal offce and place of business located at 720 N.W, 27th Ave., Miami, Fla. Respondent National Direct Distrihutors, Inc. is a wholly-owned subsidiary of respondent Atlantic Industries, Inc.

Respondent is now and for some time last past has been engaged in the advertising, offering for sale, sale and distribution of photogrdphs ?!) 90:; Complaint photographic albums, photograph enlargements, photograph certificates, film and other merchandise to the public. Trading as National Advertised Products, respondents' primar effort is to sell a photograph enlargement plan. Under the plan, the tomer. .is entitled to have a specifc number of enlargements developed' by respondents. The customer pays a lump sum, often on credit, for the plan and receives a book of coupons which are redeemable for the enlargements. Said products are sold chiefly by door-tn-door salesmen.

Trading as International Album Plan, respondents' primar effort is to sell a photograph enlargement plan. Under the plan, the customer is entitled to have a specific number of enlargements developed by respondents. The customer pays a lump sum, often on credit, for the plan and receives a book of coupons which are redeemabl for the enlargements. Said products are sold chiefly by door-to-door salesmen. PAR. 5. Respondents .Jeffrey.J. Weiss and Martin Osman are offcers and directors of the four corporate respondents. Said individual respondents formulate, direct, and control the acts and practices of the corporate respondents, including the acts and practices hereinafter set forth. The business address of the individual respondents is 720 N. 27th Ave., Miami, Fla.

Respondent Lawrence Hahn is a director of the four corporate respondents and an officer of respondent Atlantic Industries, Inc. In such positions, the respondent cooperates -with the other individual controlling the acts and respondents in formulating, directing, or practices of the corporate respondents, including the acts and practices hereinafter set forth. The business address of respondent Hahn is 228 Peachtree Rd" N. , Atlanta, Ga.

PAR. 6. Respondent Richard S. Labovitz is an officer of the corpordte respondents International Baby Care, Inc. and Atlantic International Distrihutors, Inc. and as such cooperdtes with the other individual respondents in formulating, directing, and controllng the acts and practices of the corporate respondents, including the acts and practices hereinafter set forth. The business address of respondent Labovitz is 720 N.W. 27th Ave., Miami, Fla.

PAR. 7. In the course and conduct of their aforesaid business, and at all times mention ed herein, respondents have been, and are now, in substantial competition, in commerce, with corporations, firms and individuals in the sale of merchandise of the same generdl kind and nature as that sold by respondents and in the collection of delinquent accounts.

0 - 7r - , .

Complaint 85 V.

COUNT I Alleging violations of Section 5 of the Federal Trade Commission , Act the allegations of Paragraphs One, Four, Five and Seven hereof are incorporated by reference in Count I as if fully set forth verbatim. PAR. 8. In the course and conduct of their aforesaid business respondents now cause, and for some time last past have caused their said photographs, photograph albums, photograph enlargements photograph certificates, film and other merchandise to be sold in various States of the United States, and when sold, to be shipped from their place of business in the State of Florida to purchasers thereof located in the varous States. Respondents maintain, and at all times mentioned herein have maintained, a substantial course of trade in commerce, as "commerce" is defined in the F'ederal Trade Commission Act.

PAR. 9. In the course and conduct of their business and for the purpose of inducing the purchase of their merchandise, respondents respondents! agents, representatives, and employees have made and are now making numerous statements and representations directly or by implication:

1. That customers will receive a free price, git, or bonus, namely a photograph album, with the purchase o the photograph enlargement plan.

2. That certain but not all prospective customers will be offered the opportunity to purchase the plan at a "special" or "reduced" price and that those prospective customers not offered the "special" or "reduced" price must pay a higher price.

3. That the "special" or "reduced" price is low respondents established regular retail price for the plan. 4. That the "special" or "reduced" price is an " at cost" price which includes only the cost to respondents of materials needed to print and develop the enlargements.

5. That in order to purcha.o;e the plan at the "special" or "reduced" price, the prospective customer must agree to display the photograph album in his home.

6. That the special price is being offered for the purpose of advertising and promoting respondents' product. PAR. IO. In truth and in fact:

L The album is not free. Its cost is included in the cost of the plan. 2. Every prospective customer is afforded the opportunity to purcha...e the plan at the " special" or "reduced" price and no customer has to pay any higher price.

R The "special" or "reduced" price is not below respondents ATLAN'jC UltLf\'lij J ..a.,. u- 90:J Complaint established regular retail price for the plan. Respondents have never offered nor sold the plan for any price high"r than the so-called special" or " reduced" price.

4. The so-called "special" or "reduced" price is not an "at cost" price. 'Fhe cost of the plan includes . more than the cost to respondents of materials needed to print and develop the enlargements. 5. The prospective customers agreement to display the photograph album is not a prerequisite to respondents selling the plan to the customer at the so-called "special" or "reduced" price. 6. Respondents' offer is made for the purpose of realizing a profit on the sale and not for the purpose of advertising or promoting their portrait plan.

Therefore, the statements and representations set forth in Paragraph Nine are misleading and deceptive.

PAR. 11. In the further course and conduct of their business respondents' agents, representatives, and employees represent directly or by implication that single enlargements are regularly sold by respondents for $7 each. Using $7 to demonstrate value, respondents further represent:

1. That the 100 coupon plan which has a base selling price of $189. is valued at over $700.

2. That the 90 coupon plan which has a base sellng price of $149. is valued at over $6:

has a base sellng price of $89.95 isvalued3. That the at60 couponoverplan$420.which 4, That customers win save the difference between the value of the plan and the base seJIng price.

PAR. 12. By and through the use of the statements set out in Paragraph Eleven above, and others of similar import and meaning but not expressly set out herein, respondents have represented, and are now representing that on a regular basis for a reasonably substantial period of time in the recent regular course of their business, single enlargements have been sold for $7 and further that $7 per enlargement would be a fair and accurate amount to use in determining the value of respondents' plan.

PAR. 18. In truth and in fact respondents have not sold single enlargements for $7 or any other price on a regular basis for a reasonably substantial period of time in the recent reguar course of their business, Therefore, any demonstration of value or savings based on the $7 amount such as those described in Pargraph Eleven above would be false and misleading.

In addition, when demonstrating savings to customers, respondents neglect to add to the base price of the plan an amount equal to seventy- 90H FEDERAL TRADE COMMISSION DECISIONS Complaint 85 F.T.

five cents per enlargement which respondents charge to cover mailing and handling. Respondents failure to include this extra charge is deceptive and misleading because such failure results in an infation of the amgunt a customer might save by purchasing the plan. , PAR: 14. In the course and conduct of respondents' operations of the film processing service and for the purose of inducing the purchase of their developing and printing services, respondents, respondents agents, representatives and employees have made, and are now making statements and representations to customers that customers wiu receive a fresh roll of Kodak fim FREE with each roll of film developed or printed by respondents. The free film has been offered by respondents continuously for a period of at least two years. . PAIL 15. By and through the use of the word "free" resporitlents have represented directly or through implication that the price charged by respondents is for processing alone and does not include any payment for the film.

PAR. 16. In truth and in fact, the fim is not free because the continuous offer of free fim over a long period of time has resulted in the price for the processing service alone becoming the regular price for the processing and film in combination. Thus, the statements and representations set out in Paragraphs Fourteen and Fifteen above are false and misleading, PAR. 17. The use by respondents of the-dforesaid false, misleading and deceptive statements, representations and practices 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 into the purchase of substantial quantities of respondents' merchandise because of such erroneous and mistaken belief PAR. 18. The aforesaid acts and practices of respondents, as alleged herein, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfai 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.

COUNT II Alleging violations of Section 5 of the Federdl Trade Commission Act, the allegations of Paragrphs One, Two, Four, Five, Six and Seven hereof are incorporated by reference in Count II as if fully set forth verbatim.

PAR. l!. In the course and conduct of their aforesaid business respondents now cause, and for some time last past have caused their fill..fil llv lUH, In.MII . un.. UIU. UL 'LL... 903 Complaint said photographs, photograph albums, photograph enlargements photograph certificates, film, baby furture, and other merchandise to be sold in various States of the United States, and when sold, to be shipped from their place of business in the State of Florida to purchasers thereof located in various States. Respondents maintain and at a1ltimes mentioned herein have maintained, a substantial course of trade in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 20. In the course and conduct of respondents' business respondents' agents, representatives and employees have made directly or by implication, statements and representations to customers that contracts entered into between respondents and said customers are non-cancellable. However, such statements are false, misleading and deceptive because in truth and in fact state statutes provide customers a right to cancel.

PAR. 21. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices 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. PAR. 22. The aforesaid acts and practices of respondents, as alleged herein, were and are all to the prejudice and injur of the public and of respondents' competitors and constituted, and now constitute, unfair methods of competition in commerce and unfai and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

COUNT II Alleging violations of Section 5 of the Federal Trade Commission Act, the allegations of Paragraphs One, Two, Three, Four, Five, Six and Seven hereof are incorporated by reference in Count III as if fully set forth verbatim, PAR. 23. In thc course and conduct of their aforesaid business respondents now cause and for some time la. past have caused, letters forms, and various other kinds and types of documents relating to the collection of delinquent accounts to be deposited in the United States mail and transmitted to persons located in the various States of the United States, all of which constitute a par of the coure of trade in commerce as "commerce" is defined in the Federal Trade Commission Act.

PAn. 24. In the furtherance of their business and for the purpose of inducing the payment of purprtedly delinquent accounts, respondents respondents' agents, representatives, and employees have sent or Complaint 85 F.

caused to be sent through the mail, letters, forms, and other printed matter in which respondents make certain statements and representations to purportedly delinquent customers. Typical, but not all inclusive , of said statements and representations are the following: (Letterhead) AMALGAMATED CREDIT AND COLLECTION BUREAU P. O. Box 7Hl Bronx General Post Office Bronx, New York 10451 Dear Debtor:

Your account has been given to us by Atlantic Portrait Plan *- . To avoid an embarrassing and expensive situation, mail your check or money order directly Amalgamated Credit and Collection Bureau.

2. Thf above account has for value received bp.en assigned to th( credit bureau for immediate collection procedure.

FINAL NOTICF, * * * You are hereby notified that we intend to institute legal action to be brought against4. IfyouyOIlfordothenotentiresee fitbalanceto lakeofcareyourofaccount.this small matter and honor your obligations we wiJ have no alternative but to collect through the Small Claims Court.. PAR. 25. By and through the use of the aforesaid statements and representations described in Paragraph 'Twenty- Four above and others of similar import not specifically set out herein, respondents represent and have represented directly or by implication that: 1. Delinquent accounts have been tured over or assigned for value by respondents to an independent credit and colledion bureau. 2. If payments are not made, respondents will institute suit or take other legal action to collect the outstanding amount clue. PAR. 26, Such statements as those set out in Paragraphs Twenty- Four and Twenty-Five above are false and misleading because in truth and in fact:

1. Accounts have not been tured over nor assigned for value to independent credit and collection bureaus. Respondent Atlantic International Distributors, Inc., trading as Amalgamated Credit and Collection Bureau, is a corporate device used by Atlantic Industries Inc. and the individual respondents. By use of the device respondents hope to effect the collection of delinquent accounts by representing and implying that the respondent Amalg'dmated Credit and Collection Bureau is an independent collection agency. 2. Respondents seldom, if ever, bring legal action to collect delinquent accounts.

PAR. 27. In the further course and conduct of the collection of , !, ATLAN'JC l'UKl'KAl' PLAN '1C. AL. "11 90:j Order Amending Complaint delinquent accounts, respondents send or cause to be sent forms, such as the one entitled "Demand for the Payment of Debt," designed to mislead the recipient into believing that such form was sent by a government body or one of its agencies.

. PAR. 28. The use by respondents of the aforesaid false, misleading mi.d deceptive statements, representations and practices 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 into the payment of said delinquent accounts because of such erroneous and mistaken belief.

PAR. 29. The aforesaid acts and practices of respondents, as alleged herein, were and are aU to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unai methods of competition in commerce and unai and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

ORDER AMENDING COMPLAINT By motion fied Dec. 19, 1973, complaint counel have requested that the complaint be amended in several respects and that certain amendments he made to the preamble to the form of order served with the complaint. Specifcally, complaint counsel have requested that the following amendments be made:

(1) Amend subparagraph 2 of Paragrph Ten of Count I to read: 2. Most, if not aU, prospective customers are afforded the opportunity to purchase the plan at the " special" or "reduced" price and no customer has to pay any higher price.

(2) Amend subparagrdph 3 of Paragrph Ten of Count I to read: 3. The "special" or "reduced" price is not below respondents established reguar retail price of the plan. Respondents seldom, if ever, have offered or sold the plan for any price higher than the so called "special" or "reduced" price.

(8) Amend subpargraph 1 of Paragrph Eleven of Count I to read: 1. That the l00-coupon plan, which has a base selling price of $199.95 or $189. , is valued at over $700. (4) Add as subpargraph 7 to Paragrph Nine of Count 7, That the purpose of respondents' initial contact with the prospect is to give a surrise which was sent out by respondents' public relations department, or to present an advertising promotion or to make a courtesy presentation, or is for purses other than the sale of respondents' products or servces.

(5) Add as subparagraph 7 to Paragraph Ten of Count Order Amending Complaint 85 F. 7. Respondents' sales representatives have not and are not contacting persons in their homes or places of business primarily for , the Ifrpose of giving a surprise; presenting an advertising promotion or making a couresy presentation. To the contrary, the primar purose for contacting such persons has been and is to sell respondents products or services.

((j) Amend the preamble to Part I of the proposed order by substituting the word " " for the word "and" in the tenth line thereof. (7) Amend the preamble to Part II of the proposed order by substituting the word " " for the word "and" in the eleventh line thereof.

Respondents have filed response to complaint counsel's motion to amend the complaint wherein they do not oppose the proposed amendments numbered (1), (2), (3), (6) and (7) as set forth above. Complaint counsel have fied a reply to respondents' response, which reply has been accepted into the record and duly considered by the undersigned, The authority of the administrative law judge to amcnd a complaint is set forth in Section a. 15(a)(1) of the Commission s Rules of Practice. This section of the rules provides that the administrative law judge may allow appropriate amendments to the complaint, if a determination of the controversy on the merits will be facilitated thercby; Provd however That motions for amendments may bc allowed only if the amendment is " reasonably within the scope of the original complaint" Motions for other amendments to complaints shall be certifed to the Commission.

The Commission has on a number of occa,ions interpretcd this section. In Starurd Camera Cor., et al. 6.'3 F.TcG, 12.18, 1266 (19f.'3), the Commission stated:

Our Rules of Practice empower a hearing examiner to allow appropriate amendments to the pleading-so Such power is limited, however, by the caveat that the amendments must be "reasonably within the scope of the proceeding initiated by the original complaint." Where the effect of the amendment is an alteration of the underlying theory behind the complaint, or where it alleges substantially different ads or practices on the part of the respondent, or where it requires different determinations with respect to the belief that a violation has occurred and that the public interest is jeopardized, the hearingexaminer is without power to authorize it. Thus, where an amendment impinges upon powers exercised exclusively by the Commission, it is incumbent upon the hearing examiner to certify the matter to us for determination. Accordingly, the requested amendments to subparagrdphs 2 and 3 of Paragraph Ten and subparagrdph 1 of Pargrdph Eleven of Count I are hereby granted. These subpamgraphs will be amended as requested by complaint counsel and as set forth hereinabove. These amendments involve a restatement of the methods employed by respondents in effectuating" the practices alleged to be unlawful and are so related to 903 Order Amending Complaint the subject matter of this proceeding as to be well within the scope of the original complaint (see Capdol Rewyds Distributing Cororation 58 F. C, 1170, 1174 (1961)). Furher, such amendments will facilitate a determnation of this controversy on the merits and will not prejudice the publi interest or the rights of the paries hereto. The amendments requested to be made to the preamble of Par I and the preamble of Par II of the form of order served with the complaint are hereby denied. In the first place, the form of order served with the complaint is not a pleading as such; it does not set forth allegations of unlawful conduct. Furher, it is subject to change or modiciation if record fads adduced during the proceeding make such furher or other relief necessary.

Additionally, the proposed amendments to the form of order are insignificant. The conjunction "and" is construed to mean lias :well as and is a reference to 'I either or both. And" is sometimes inferpreted as if it were the word " " which is an alternative, a choice of either. Since the form of order, at least at this juncture, does not require such precision of language as does the complaint, and since the requested amendments are in reality insignficant, the proposed amendments to the preamble to Part I and the preamble to Par II of the form of order served with the complaint are denied. The amendments requesting the aditions of subpamgmph 7 to Paragraph Nine and subparagraph 7 to Paragraph Ten fall in different category. These proposed amendments allege substantially different acts and practices from those which are alleged in the complaint. The complaint in Pargrphs Nine and Ten is concerned with "free" gits with the purchase of respondents' products, or special" or "reduced" prices in connection with the sale of respondents products. The amendments proposed by complaint counsel are new subparagraphs to be added to the complaint which challenge as unlawful respondents' initial contact with a prospectlve . purchaser. There is no indication in the complaint, as issued, that the proposed respondents' initial contact with prospective purchasers is unawful, or is to be challenged in this proceeding. Accordingly, complaint counsel's motion to add a subparagraph 7 to Paragrdph Nine and a subparagrph 7 to Paragraph Ten will be certified to the Federa Trade Commission for a determination, since it appear that these proposed amendments if warrdnted, are beyond the authority vested in the administrdtive law judge. Accordingly, It is ordered That subpargrphs 2 and 3 of Pargmph Ten and subparagraph 1 of Paragraph Eleven of Count I are amended to read as follows:

Subpargraph 2 and 3 of Pargrph Ten of Count I to read: Order Amending Complaint 85 FTC. 2, Most, if not aU, prospective customers are afforded the opportunity to purchase the plan at the "special" or "reduced" price and no . customer has to pay any higher price.

, 3. . The "special" or "reduced" price is not below respondents established reguar retail price of the plan. Respondents seldom, if ever, have offered or sold the plan for any price higher than the socalled "special" or "reduced" price.

Subparagraph 1 of Paragrph Eleven of Count I to read: 1. That the loo-coupon plan, which has a base seUing price of $199.95 or $189. , is valued at over $700. ORDER AMENDING COMPLAINT By motion filed Dec. 19 19n complaint counsel moved to amend the complaint. Upon consideration of respondents' answer and complaint counsel's reply, the administrative law judge disposed of all but two of the requested amendments, concluding that they were not reasonably within the scope of the original complaint. Puuant to Rule 3.15(a) of the Commission s Rules of Prctice, the law judge certifed them to the Commssion on Jan. 14, 1974. The amendments in question aUege misrepresentations made by respondents' sales representatives as to the purpose of their initial contacts with prospective customers, Upon considemtion of the arguments_in the pleadings, and the law judge s certification, the Commssion has concluded that there is reason to believe that the misrepresentations alleged in the certifed amendments were made and constitute violations of Section 5 of the ederal Trade Commssion Act; that it is in the public interest to try said misrepresentations together with those alleged in the origial complaint rather than separately and; that any possible prejudice to respondents can be avoided through the gmnt of additional time. Accordingly, It is ordered That complaint counsel's motion to amend, as certifed to the Commission, be, and it hereby is, grdnted; and that the complaint , and it hereby is, amended as follows:

Add as subpargrph 7 to Pargrph Nine of Count I: 7. That the purse of respondents' initial contact with the prospect is to give a surprise which was sent out by respondents' Public Relations Department, or to present an advertising promotion or to make a courtesy presentation, or is for purses other than the sale of respondents' products or services.

Add as subpardgrdph 7 to Paragraph Ten of Count I: 7. Respondents' sales representatives have not and are not contacting persons in their homes or places of business primarly for the purpose of giving a surprise, presenting an advertising promotion ATLANTll; PUKTKA1T LAN ..;TL., t;T AL. "10 903 Amended Complaint or making a courtesy presentation. To the contrary, the primary purpose for contacting such persons has been and is to sell respondents products or services.

It is further ordered That the administrative law judge shah cause to be served upon respondents copies of the complaint, as amended herein and by his order of Jan. 14, 1974. .

ORDER SERVING RESPONDENTS WITH AMENDED COMPLAINT By order of July 9, 1974, the Commission amended the complaint herein and directed that the administrdtive law judge cause to be served upon respondents copies of the complaint, as amended by the Commission on .July 9, 1974, and as amended by the administrative law judge by order of .Jan. 14, 1974. Accordingly, It is ordered That the complaint, as amended, be herewith served upon respondents, as per copy attached hereto, It is further ordered That respondents be, and they hereby are, given ten (10) days from the date of receipt of the amended complaint in which to file an answer thereto.

AMENDED COMPLANT Pursuant to the provisions of the Federa Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Atlantic Industries Inc., a corporation trading as Atlantic Portrat Plan and Atlantic Film Club, International Baby Care, Inc., Atlantic International Distributors, Inc., a corporation trading as Amalgamated Credit and Collection Bureau, National Direct Corporation, a corpration trading as National Advertised Products and International Album Plan, Jeffrey J. Weiss and Martin Osman, individually and as offcers of said corprations Lawrence Hahn, individually and as an officer of Atlantic Industries Inc., and Richard S. Labovitz, individually and as an officer of International Baby Care, Inc. and Atlantic International Distributors Inc., hereinafter referred to as respondents, have violated the provisions of said act, and it appearg to the Commssion that a proceeding by it in respect thereof would be in the public interest hereby issues its amended complaint stating its charges in that respect as follows:

PARAGRAPH L Respondent Atlantic Industries, Inc., tl"dding as Atlantic Portrat Plan, and Atlantic Film Club, is a corporation organied, existing and doing business under and by viue of the laws of the State of Florida, with its principal office and place of business located at 720 N.W. 27th Ave., Miami, Fla.

916 FEDERAL TRADE COMMI8SIUN DF:CI8IUNS Amended Complaint 85 F.

Respondent is now and for some time last past has been engaged in the advertising, offering for sale, sale and distribution of photographs photograph albums, photograph enlargements, photograph certificates film and other merchandise to the public.

, Trad;pg as Allantic Portrait Plan, respondents' primar effort is to sell a photograph enlargement plan. Under the plan, the customer is entitled to have a specified number of enlargements developed by respondents over a ten year period. The customer pays a lump sum, often on credit, for the plan and receives a book of coupons which are redeemable for the enlargements. Said products are sold chiefly by door-to-door salesmen.

Respondent, trading as Atlantic Film Club, operates a fim processing service.

PAR. 2. Respondent International Baby Care, Inc., is a orporation organized, existing and doing business under and by virtue of the laws of the State of Delaware with its principal offce and place of business at 720 N.W. 27th Ave" Miami, Fla. Respondent International Baby Care, Inc. is a wholly-owned subsidiar of respondent Atlantic Industries, Inc.

Respondent is now and for some time last pa.st ha.s been engaged in the advertising, offering for sale, sale and distribution of baby furiture products to the public.

PAR. 3. Respondent Atlantic International Distributors, Inc., trading as Amalgamated Credit and Collection Bureau, is a corpordtion organized, existing and doing business under and by virtue of the laws of the State of Florida. The corporate address is 720 N .W. 27th Ave. Miami, Fla. Respondent Atlantic International Distributors, Inc. is a wholly-owned subsidiary of respondent Atlantic Industries, Inc. Respondent Atlantic International Distributors, Inc. is now and for some time last past has been engaged in the collection . of delinquent accounts for respondents Atlantic Industries, Inc. and International Baby Care, Inc.

PAR. 4, Respondent National Direct Corporation, traing a.s National Advertised Products and International Album Plan, is a corporation organied, existing and doing business under and by viue of the laws of the State of Florida, with its principal office and place of business located at 720 N.W. 27th Ave., Miami, Fla. Respondent National Direct Distributors, Inc. is a wholly-owned subsidiary of respondent Atlantic Industries, Inc.

Respondent is now and for some time last past has been engaged in the advertising, offering for sale, sale and distribution of photogrphs photographic albums, photogrph enlargements, photogrph certificates, fim and other merchandise to the public. 903 Amended Complaint Trading as National Advertised Products, respondents' primar effort is to sell a photograph enlargement plan. Under the plan, the customer is entitled to have a specific number of enlargements developed by respondents. The customer pays a lump sum often on credit, for the plan and receives a book of coupons which are redeemahle for the enlargements. Said- products are sold chiefly by door-to-door salesmen.

Trading as International Album Plan, respondents' primar effort is to sell a photograph enlargement plan. Under the plan, the customer is entitled to have a specific number of enlargements developed by respondents. The customer pays a lump sum, often on credit, for the plan and receives a book of coupons which are redeemable for the enlargements. Said products are sold chiefly hy door-to-door salesmen. PAR. 5. Respondents Jeffrey J . Weiss and Marin Osman are offcers and directors of the four corporate respondents. Said individual respondents formulate, direct, and control the acts and practices of the corporate respondents, including the acts and practices hereinafter set forth. The business address of the individual respondents is 720 N. 27th Ave., Miami, Fla, Respondent Lawrence Hahn is a diector of the four corporate respondents and an offcer of respondent Atlantic Industries, Inc. In such positions, the respondent cooperates with the other individual respondents in formulating, directing, or controllng the acts and practices of the corporate respondents, including the acts and practices hereinafter set forth. The business address of respondent Hahn is 228 Peachtree Rd., N. , Atlanta, Ga.

PAR. 6. Respondent Richard S. Labovitz is an offcer of the corporate respondents International Baby Care, Inc., and Atlantic International Distributors, Inc. and a" such coopemtes with the other individual respondents in formulating, directing, and controlling the acts and practices of the corporate respondents, including the acts and practices hereinafter set forth. The business address of respondent Labovitz is 720 N.W. 27th Ave., Miami, Fla.

PAR. 7. In the course and conduct of their aforesaid business, and at all times mentioned herein, respondents have been, and are now, in substantial competition, in commerce, with corporations, firms, and individuals in the sale of merchandise of the same genera kind and nature as that sold by respondents and in the collection of delinquent accounts.

COUNT I Alleging violations of Section 5 of the Fedeml Trdde Commission Amended Complaint S5 F.

Act, the allegations of Paragraphs One, Four, Five and Seven hereof are incorporated by reference in Count I as if fully set forth verbatim. , PAR.. 8. In the course and conduct of their aforesaid business respOJ1dents now cause, and for some time la.,t past have caused their said photographs, photograph albums, photograph enlargements photograph certificates, film and other merchandise to be sold in varous States of the United States, and when sold, to be shipped from their place of business in the State of Florida to purchasers thereof located in the various States. Respondents maintain, and at all times mentioned herein have maintained, a substantial course of trade in commerce, as "commerce" is defined in the ederal Trade Commission Act.

PAR. 9. In the course and conduct of their business and for the inducing the purchase of their merchandise, respondents purose of respondents' agents, representatives, and employees have made and are now making numerous statements and representations directly or by implication:

1. That customers will receive a free prize, git, or bonus, namely a photograph album, with the purchase of the photograph enlargement plan.

2. That certain but not all prospective customers will be offered the opportunity to purchase the plan at a "special" or "reduced" price and that those prospective customers not offered the "special" or "reduced" price must pay a higher price.

3. That the "special' or "reduced" price is below respondents established regular retail price for the plan. 4. That the "special" or "reduced" price is an "at cost" price which includes only the cost to respondents of materials needed to print and develop the enlargements.

5. That in order to purchase the plan at the "special" or "reduced" price, the prospective customer must agree to display the photograph album in his home.

6. That the special price is being offered for the purose of advertising and promoting respondents' product. 7. That the purose of respondents' initial contact with the prospect is to give a surrise which was sent out by respondents' public relations department, or to present an advertising promotion or to make a couresy presentation, or is for purposes other than the sale of respondents' products or servces.

P Al. 10. In truth and in fact:

1. The album is not free. Its cost is included in the cost of the pIau. 2. Most, if not all, prospective customers are afforded the oppor- A.ILA.1Ylll; t'Vlilt1A.IT t'1. l\N j"l"L. .1-:1 1\1.. "1" 90B Amended Complaint tunity to purchase the plan at the "special" or "reduced" price and no customer has to pay any higher price.

3. The "special" or "reduced" price is not below respondents established regular retail price of the plan. Respondents seldom, if eyer, ha e offered or sold the plan for any price higher than the socalled " special" or "reduced" price.

4. The so-called "special" or "reduced" price is not an "at cost" price. The cost of the plan includes more than the cost to respondents of materials needed to print and develop the enlargements. 5. The prospective customers agreement to display the photograph album is not a prerequisite to respondents selling the plan to the customer at the so-called "special" or "reduced" price. 6. Respondents' offer is made for the purpose of realiing a profit on the sale and not for the purose of advertising or promoting theirportrait plan, 7. Respondents' sales representatives have not and are not contacting persons in their homes or places of business primarily for the purose of giving a surrise, presenting an advertising promotion or making a couresy presentation. To the contrary, the primar purose for contacting such persons has been and is to sell respondents products or servces.

Therefore, the statements and representations set forth in Pargraph Nine are misleading and deceptive.

PAR. 11. In the furher coure and conduct of their business respondents' agents, representatives, and employees represent directly or by implication that single enlargements are reguarly sold respondents for $7 each. Using $7 to demonstrate value, respondents furher represent:

1. That the l00-coupon plan, which has a base sellng price of $199.95 or $189. , is valued at over $700. 2. That the 9O-coupon plan which has a base selling price of $149.!J1i is valued at over $6aO.

3. That the GO-coupon plan which has a base selling price of $8!J.!J is valued at over $420.

4. That customers will save the difference between the value ofthe plan and the base selling price.

PAR. 12. By and through the use of the statements set out in Paragmph Eleven above, and others of similar import and meaning but not expressly set out herein, respondents have represented, and are now representing that on a regular basis for a reasonably substantial period of time in the recent reguar coure of their business, single enlargements have been sold for $7 and furher that $7 per Amended Complaint R5 F.

enlargement would be a fair and accurate amount to use in determining the v;llue of respondents' plan.

PAR. 13. In truth anditJ fact respondents have not sold single enlargements for $7 or any other price on a regular basis for a reasonably substantial period of time in the recent regular course of their business. Therefore, any demonstration of value or savings ba.ged on the $7 amount such as those described in Paragraph Eleven above would be false and misleading.

In addition, when demonstrating savings to customers, respondents neglect to add to the base price of the plan an amount equal to seventyfive cents per enlargement which respondents charge to cover mailing and handling. Respondents failure to include this extta charge deceptive and misleading because such failure results in an inflation of the amount a customer might save by purchasing the plan. PAR. 14. In the course and conduct of respondents' operations of the film processing service and for the purse of inducing the purchase of their developing and printing services, respondents, respondents agents, representatives and employees have made, and are now making statements and representations to customers that customers will receive a fresh rob of Kodak film FREE with each roll of fim developed or printed by respondents. The free f1m has been offered by respondents continuously for a period or at least two year, PAR. 15. By and through the use of the word "free" respondents have represented directly or through implication that the price charged by respondents is for processing alone and does not include any payment for the fim.

PAIL 16. In truth and in fact, the film is not free because the continuous offer of free fim over a long period of time has resulted in the price for the processing servce alone becoming the reguar price for the processing and fim in combination. Thus, the statements and representations set out in Paragrphs Foureen and Fifteen above are false and misleading. P Al. 17. The use by respondents of the aforesaid false, misleadinp; and deceptive statements, representations and practices ha.9 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 into the purchase of substantial quantities of respondents' merchandise because of such erroneous and mistaken belief.

PAR. 18. The aforesaid acts and practices of respondents, as alleged herein, 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 ATLANTIC PORTRAIT PLAN, ETC., ET AL. 921 Amended Complaint practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

COUNT II Allegirig violations of Section 5 of the Federal Trade Commission Act, the allegations of Paragraphs One, Two, Four, Five, Six and Seven hereof are incorporated by reference in Count II as if fully set forth verbatim.

PAR. 19. In the course and conduct of their aforesaid business respondents now cause, and for some time la.-;t past have caused their said photographs, photograph albums, photograph enlargements photograph certifcates, film, baby furiture, and other merchandise to be sold in various States of the United States, and when sold, to be shipped from their place of business in the State of Florida to purchasers thereof located in various States. Respondents maintain and at all times mentioned herein have maintained, a substantial course of trade in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 20. In the course and conduct of respondents' business respondents' agents, representatives and employees have made directly or by implication, statements and representations to customers that contracts entered into between respondents and said customers are non-cancellable. However, such - statements are false, misleadingand deceptive because in truth and in fact state statutes provide customers a right to cancel PAR. 21. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices ha.-';; 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. PAR. 22. The aforesaid acts and practices of respondents, as alleged herein, were and are al1 to the prejudice and injur of the public and of respondents' competitors and constituted, and now constitute, unfai 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.

COUNT II Alleging violations of Section 5 of the Fedeml Trdde Commission Act, the allegations of Paragrdphs One, Two, Three, Four, Five, Six and Seven hereof are incorporated by reference in Count I II as if fully set forth verbatim.

Amended Complaint R5 F.T PAR, 23. In the course and conduct of their aforesaid business respondents now cause and for some time last past have caused, letters fod1, and varous other kinds and .types of documents relating to the collection of delinquent accounts to be deposited in the United States mail and transmitted to persons located in the various States of the United States, a1l of which constitute a par of the coure of trade in commerce as "commerce" is defined in the Federdl Trade Commission Act.

PAR. 24. In the furtherance of their business and for the purpose of inducing the payment of purortedly delinquent accounts, respondents respondents' agents, representatives, and employees have sent or caused to be sent through the mail, letter"" form, and . other printed matter in which respondents make certn statements and representations to purportedly delinquent customers. Typical, but not a1l inclusive of said statements and representations are the following: (Letterhead) AMALGAMATED CREDIT AND COLLECTION BUREAU P. O. Box 781 Bronx General Post Office Bronx, New York 10451 Dear Debtor:

Your account has been given to us by Atlantic Portrait Plan * * *. To avoid an embarrassing and expensive situation, mail - your check or money order directly Amalgamated Credit and Collection Bureau.

2. The above account has for value received been assigned to the credit bureau for immediate collection procedure.

FINAL NOTICE * * * You are hereby notified that we intend to institute legal action to be brought against you for the entire balance of your account. 4. If you do not see fit to take care of this small matter and honor your obligations we will have no alternative but to collect through the Small Claims Court. PAR. 25, By and through the use of the aforesaid statements and representations described in Paragraph Twenty-Four above and others of similar import not specifically set out herein, respondents represent and have represented directly or by implication that: 1. Delinquent accounts have been tured over or assigned for value by respondents to an independent credit and collection bureau. 2. If payments are not made, respondents will institute suit or take other legal action to collect the outstanding amount due, PAR. 26. Such statements as those set out in Paragmphs Twenty- C\luc\l ll"- rvo.1I\1\.Jl '-l'l\l 1.1"-. 1.1 ftu. 90a Decision and Order Four and Twenty-Five above are false and misleading because in truth and in fact:

I. Accounts have not been tured over nor assigned for value to independent credit and collection bureaus. Respondent Atlantic International Distributors, Inc., trading as Amalgamated Credit and Collection' Bureau, is a corporate device used by Atlantic Industries Inc. and the individual respondents. By use of the device respondents hope to effect the collection of delinquent accounts by representing and implying that the respondent Amalgsmated Credit and Collection Bureau is an independent collection agency. 2. Respondents seldom, if ever, bring legal action to collect delinquent accounts.

PAR. 27. In the further course and conduct of the collection of delinquent accounts, respondents send or cause to be sent forms, such as the one entitled "Demand for the Payment of Debt," designed to mislead the recipient into believing that such form was sent by a government body or one of its agencies.

PAR. 28, The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices ha.., 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 into the payment of said delinquent accounts because of such erroneous and mistaken belief, PAR. 29. The aforesaid acts and pratices of respondents, as alleged herein, were and are all to the prejudice and injur 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 Trdde Commission Act.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereto with violation of the Federal Trade Commission Act, and the respondents having been served with notice of said determnation and with a copy of the complaint the Commssion intended to issue, together with a proposed form of order; and The respondents and counsel for the Commssion having hereafter executed an agreement containing a consent order, an admission by the respondents of al1 the jursdictional facts set forth in the complaint to issue herein, a statement that the signng of said agreement is for settlement purposes only and does not constitute an admission by Decision and Order R5 F.

respondents that the law has been violated as alleged in such complaint and waivers and other provisions as required by the Commission, R ules; and The Commission having considered the agreement and having provisionally accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter pursuant to Section 2.34(b) of its rules, now in furher 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 jursdictional findings, and enters the following order:

1. Respondent Atlantic Industries, Inc., trading as Atlantic Portrait Plan, and Atlantic Film Club, is a corpration organized, existing and doing business under and by virtue of the laws of the State of Florida with its principal offce and place of business located at 720 N.W. 27th Ave., Miami, Fla.

2. Respondent International Baby Care, Inc. is a corporation organized, existing and doing business under and by viue of the laws of the State of Delaware with its principal offce and place of business at 720 N.W. 27th Ave., Miami, Fla, Respondent International Baby Care, Inc. is a wholly-owned subsidiar of respondent Atlantic Industries, Inc.

3. Respondent Atlantic International Distributors, Inc., trading as Amalgamated Credit and Collection Bureau, is a corporation organied existing and doing business under and by virtue of the laws of the State of Florida. The corporate address is 720 N.W. 27th Ave., Miami, Fla. Respondent Atlantic International Distributors, Inc. is a wholly-owned subsidiary of respondent Atlantic Industries, Inc. 4. Respondent National Direct Corpration, trading as National Advertised Products and International Album Plan, is a corporation organized, existing and doing business under and by viue of the laws of the State of Florida, with its principal offce and place of business located at 720 N .W. 27th Ave., Miami, Fla. Respondent National Direct Corporation is a wholly-owned subsidiar of respondent Atlantic Industries, Inc.

5. Respondents Jeffrey J . Weiss and Marin Osman are offcers and directors of the four corpordte respondents. Said individual respondents formulate, direct and control the acts and practices of the corporate respondents. The business address of the imlividual respondents is 720 N,W. 27th Ave., Miami, Fla.

Respondent Lawrence Hahn is a director of the four corpomte respondents and an offcer of respondent, Atlantic Industries, Inc. H.1L111 1l\-, rVI\lC\l\ll rL11n, r.1'--,., r.1 11L. :1.td 903 Deeision and Order such positions, he cooperates with the other individual respondents in formulating, directing or controlling the acts and practices of the corporate respondents. The business address of respondent Hahn is 2285 Peachtree Rd., N. , 6. Respondent Richard S. Labovitz is an offcer of the corporate Atlanta, Ga.respondetlt International Baby Care, Inc., and as such cooperates with the other individual respondents in formulating, directing and controlling the acts and practices of the corporate respondent. The business address of respondent Labovitz is 720 N.W. 27th Ave., Miami, F'la. 7. The Federal Trade Commssion has jurisdiction 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 Atlantic Industries, Inc., a corporation trading as Atlantic Portrait Plan and Atlantic Film Club International Baby Care, Inc., National Direct Corpordtion, a corpration trading as National Advertised Products and International Album Plan or under any other name, its successors and assigns and Jeffrey J. Weiss, Martin Osman and Lawrence Hahn, individually and as offcers and directors of said corporations and respondents' agents, representatives and employees, directly or through any corporate or other device in connection with the advertising, offering for sale, sale or distribution of photographs, photograph albums, photograph enlargements, photograph certifcates, film or any other merchandise in conuerce, as commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, orally or in writing, directly or by implication: a. That any customer will receive a free prize, git, or bonus with the purchase of a . photograph enlargement plan or any other merchandise sold by respondents when the cost of such pri, git or bonus is included in the price of the purchased merchandise. b. That any offer to sell at a special or reduced price is limited to certain persons and is not available to all persons, c. That any person not offered the special or reduced price must pay a higher price.

d. That any price of a product or servce is special or reduced unless such price is below the amount at which such product or service ha$ been sold by respondents for a reasonably substantial period of time in the recent regular course of their business. Decision and Order 8f) F.T. e. That any product is sold at cost, f. That any offer is conditioned upon specifed action by the '. customer.

g. That the purose of respondents' contact or solicitation is other than to sen services or products for profit. 2. Failing, clearly, emphatically and unqualifiedly to reveal, at the outset of the initial and an subsequent contacts or solicitations of purchasers or prospective purchasers, whether directly or indirectly, or by telephone, wrtten or printed communication, or person-to-person that the purpose of such contact or solicitation is to sen products or services as the case may be, which shan be identifed with paricularty at the time of each such contact or solicitation. a. Representing, orally or in wrting, directly or by implication, that any amount is respondents' usual and customar retail price for any product or service unless such amount is the price at which such product has been usually and customarly sold at retail by respondents for a reasonably substantial period of time in the recent reguar coure of business.

4. Representing any price as respondents' usual and customar price to demonstrate the value of a photo enlargement or any other product or service when such price is in excess of the price at which such product has been usually and "Customarly sold at retail by respondents for a reasonably substantial period of time in the recent regular course of business.

5. Representing, in any manner, that by purchasing any of respondents' merchandise or servces, customers are afforded savings, amounting to the difference between respondents' stated price and a compared value price for comparable merchandis-e. or servce unless substantial sales of merchandise or servces of like grde and quality are made in the trade area at the compared price and unless respondents have in good faith conducted a market surveyor obtained a similar representative sample of prices in the trade area in which the comparison is made which establishes the valdity of said compared price and it is clearly and conspicuously disclosed that the comparison is with merchandise or servces of like grde and quality. 6. Failing to disclose any charges or costs in representing savings to customers in the purchase of any product or servce. 7. Misrepresenting in any manner the amount of savings available to purchasers of respondents' products or services. 8. Representing, directly or by implication, in any manner, that any price is reduced from respondents' former price or that any savings will accrue to the customer through purchase of respondents' merchandise or service unless respondents' business records establish and show that . ., .

90:J Decision and Order such prices constitute a signcant reduction from the price at which such merchandise has been sold in substantial quantities or openly and actively offered for sale in good faith for a rea.,onable substantial period of time by respondents in the recent regular course of their business.

9. Making any statements or representations to film processing customers that "free" film will be given in connection with the sale of such service, unless the price charged therefor is respondents' usual and customar price for the fim processing servce alone. It is fi"rther ordered That respondents Atlantic Industries, Inc., a corporation trading as Atlantic Portrait Plan and Atlantic Film Club National Direct Corporation, a corpration trading as National Advertised Products and International Album Plan, or under any other name, International Baby Care, Inc., a corporation, the corprations successors and assigns, and .Jeffrey J. Weiss, Marin Osman, Lawrence Hahn and Richard S. Labovitz, individually and as offcers or directors of said corporations and respondents' agents, representatives and employees, directly or through any corporate or other device in connection with the advertising, offering for sale, sale or distribution of photographs, photograph albums, photogrph enlargements, photograph certificates, fim, baby furture or other merchandise in commerce, as "corierce" is defined in the- F-ederal Trade Con.rssion Act, do forthwith cease and desist from:

1. Representing, directly or in any other manner, that contracts entered into between respondents and their customers are noncancellable.

2. Failing to furish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language Spansh, as that principaly used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contrdct for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold face type of a minimum siz of 10 points, a statement in substantially the following form:

You, the buyer, may canceJ this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.

3, Failng to furnish each buyer, at the time he signs the door-todoor sales contract or otherwse agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned Decision and Order 85 F.

NOTICE OF CANCELLATION " which shall be attached to the contract or receipt and easily detachable, and which shan contain a 10- . point bold face type the following information and statements in the , s"me language Spanish, as that used in the contract: NOTICE OF CANCELLATION (enter dale of transaction) You may cancel this transaction, without any penalty or obligation, within three c: business days from the above dalc.

If you cancel, any property traded in, any payments made by you lImier the contract or sale, and any negotiable instrument executed by you will be returned within ten (0) business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled. If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contrdct or sale; or you may, if you \Irish, comply with the im,tructions of the seller reg-arding the return Hhipment of the goods at the seller s expense and risk. If you do make the goods available to the seller and the seller does not pick them up within twenty (20) days of the date of your notice of cancetlation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so then you remain liable for performance of all ohligations under the contract. To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram to (na:me of eller) at (address of seller's place of business) not later than midnight of (,wie) I hereby cancel this transaction.

(date) 4.(buyerFailing,s signature)before furishig copies of the "Notice of Cancellation to the buyer, to complete both copies by entering the name of the seller the address of the seller's place of business, the date of the trdlsaction, and the date, not earlier than the third business day following the date of the transaction, by which the buyer may give notice of cancellation, 5. Failing to inform each buyer ordlly, at the time he signs the contract or purchases the goods or services, of his right to cancel 6. Misrepresenting in any manner the buyer's right to cancel. 7. Failing or refusing to honor any valid notice of cancellation by a buyer and within ten (10) business days after the receipt of such notice to: (1) refund an payments made under the contract or sale; and (2) return any goods or property traded in, in substantially as good condition as when received by the seller.

S. Failing, within ten (lU) business days of receipt of the buyer's ATLANTIC PORTRAIT PLAN, ETC., ET AI.. 929 90:J Decision and Order notice of cancellation, to notify him whether the seller intends to repossess or to abandon any shipped or delivered goods. Provided, however That nothing contained in Count II of this order shall relieve respondents of any contractual obligations required by fe4eralla", or that law of the State in which the contract is negotiated. When such oblig'dtions are inconsistent, respondents may apply to the Commssion for relief from this provision with respect to contract executed in the state in which such different obligations are required. It is further ordered That respondents Atlantic Industries, Inc. trading as Atlantic Portrait Plan and Atlantic Film Club, or under any other name, International Baby Care, Inc., a corporation and Atlantic International Distributors, Inc., a corporation trading as Amalgamated Credit and Collection Bureau, or under any other name, National Direct Corporation, a corporation trading as National Advertised Products and International Album Plan, or under any other name, the corporations' successors and assigns, and .J effrey J. Weiss, Martin Osman, Lawrence Hahn and Richard S. Labovitz, individually and as officers or directors of said corporations and respondents' agents representatives and employees, directly or through any corporate or other device in connection with the collection of delinquent accounts in commerce, as "commerce" is define in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, in any manner, that an account has been tured over or assigned for value to an independent credit and collection bureau.

2, Representing, orally or in wrting, directly or by implication, in order to effect payment of any account, that respondents intend to institute legal action to recover for any payment due; unless respondents establish by adequate records that a prior determation had been made in good faith to institute such legal action. 3. Using the form "Demand for the Payment of Debt" or any other form which misleads or has the tendency to mislead the recipient into believing that such form was sent by a government body or one of its agencies.

It is further ordered That respondents shall forthwith distribute a copy of this order to each of their operating divisions. It is further oni.red That respondents shall: 1. Provide each of their present and future branch managers, and Decision and Order 85 F.T.C. other supervisory personnel engaged in the sale or supervsion of persons engaged in the sale of respondents' photography products or , servi .es, written instructions with respect to the provisions of this order which are applicable to the functions of each such person. 2. Require each person so described in Paragraph (1) above to clearly and fully explain the applicable provisions of this order to all sales agents, representatives and other persons engaged in the sale of the respondents' photography products or servces. 3. Provide each person so described in Paragrdphs (1) and (2) above with a form returable to the respondents clearly stating his intention to be bound by and to conform his business practices to the applicable provisions of this order; retain said statement during the period said person is so engaged and make said statement available to the Commission s staff for inspection and copying upon request. 4. Inform each person described in Paragraphs (1) and (2) above that respondents shall not use any third party, or the servces of any third party, if such third pary will not agree to so file and does file notice with the respondents that it will be bouud by the applicable provisions of this order.

5. If such third party will not agree to so file notice with respondents and be bound by the applicable provisions of the order respondents shall not use such third party, or the services of such third party to sell respondents' photography products or services. 6. Inform the persons described in Paragraphs (1) and (2) above that respondents are obligated by this order to discontinue dealing with those persons who continue on their own the deceptive acts or practices prohibited by this order.

7. Institute a program of continuing sureillance to reveal whether the business operations of each said person described in Paragraphs (1) and (2) above conform to the applicable provisions of this order. S. Discontinue dealing with the persons so engaged, revealed by the aforesaid program of surveilance, who continue on their own the deceptive acts or practices prohibited by the applicable provisions of this order.

9. Upon receiving information or knowledge from any source concerning two or more bona fide complaints prohibited by the applicable provisions of this order ag-dinst any of their sales agents or representatives durng anyone-month period, will be responsible for either ending said practices or securng the termnation of the employment of the offending sales agent or representatives. 10. Submit to the Commssion a detailed report every six (6) months for a period of three year from the effective date of this order Irlr, lor,n IVlJ , In"-,, bi r!L. ",uI 931 Decision and Order demonstrating the effectiveness of the steps or actions taken with regard to the aforesaid surveilance program. It is further ordered That respondents herein shall notify the Commission at least thirty (30) days prior to any proposed change in the struture of the corporate respondents such as dissolution signment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiares or any other change in the respective corporation which may affect compliance obligations arising out of this order.

It is fitrther ordered That the individual respondents named herein promptly notify the Commission of the discontinuance of their present business or employment and of their affliation with a new business or employment. Such notice shall include respondents' curent business or employment in which they are engaged as wen as a description of their duties and responsibilities.

It i., fitrther ordered That respondents herein shall within sixty (60) days after service upon them of this order, fie with the Commssion a report, in wrting, setting forth in detail the manner and form in which they have complied with this order.