Towne, Silverstein, Rotter, Inc

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

Complaint 114 F.T.C.

IN THE MATTER OF

TOWNE, SILVERSTEIN, ROTTER, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3325. Complaint, Feb. 27, 1991—Decision, Feb. 27, 1991

This consent order prohibits, among other things, a New York City based advertiser from making deceptive advertising claims for toys.

Appearances

For the Commission: Janet M. Evans and Joel C. Winston.

For the respondent: Felix Kent, Hall, Dickler, Lawler, Kent & Friedman, New York, N.Y.

COMPLAINT

The Federal Trade Commission, having reason to believe that Towne, Silverstein, Rotter, Inc., ("TSR") hereinafter sometimes referred to as "respondent" has violated provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. TSR is a New York corporation with its principal office or place of business at 411 Lafayette Street, New York, New York.

PAR. 2. TSR is now, and for some time past has been the advertising agency of Lewis Galoob Toys, Inc. ("Galoob"). TSR has prepared and placed for publication, advertising material to promote the sale of Galoob toys, including Micro Machines (miniature vehicles), Micro Machines playsets (such as Transport Chopper, Aircraft Carrier and Air Cargo), Xpanders (such as the Xpanders Chopper/Assault Base), and Bouncin' Kids (dolls that move).

PAR. 3. The acts or practices of respondent alleged in this complaint have been in or affecting commerce.

PAR. 4. Typical, but not necessarily all inclusive, of respondent's advertisements for Micro Machines, Micro Machines playsets, Xpan-

TOWNE, SILVERSTEIN, ROTTER, INC. 219 218 Complaint

ders, and Bouncin' Kids are set forth in Exhibits A through E attached hereto. PAR. 5. Through the use of the statements and depictions in Exhibit E and others in advertisements not specifically set forth herein, respondent represented, directly or by implication, that the Bouncin' Kids Ballerina Kid stands on one foot and twirls by herself without human assistance. PAR. 6. In truth and in fact, the Bouncin' Kids Ballerina Kid does not stand on one foot and twirl by herself without human assistance. Therefore, the representations set forth in paragraph five were false and misleading. PAR. 7. Through the use of the statements and depictions in Exhibit D and others in advertisements not specifically set forth herein, respondent represented, directly or by implication, that the Xpanders Chopper/Assault Base shoots a missile at a high rate of speed and that the missile travels a considerable distance. PAR. 8. In truth and in fact, the Xpanders Chopper/Assault Base does not shoot a missile at a high rate of speed and the missile does not travel a considerable distance. Therefore, the representations set forth in paragraph seven were false and misleading. PAR. 9. Through the use of the statements and depictions in Exhibits A, B, and C, and others in advertisements not specifically set forth herein, respondent represented, directly or by implication, that the Micro Machines playsets Transport Chopper, Aircraft Carrier, and Air Cargo as packaged and sold include some or all of the Micro Machines pictured in the advertisements. PAR. 10. In truth and in fact, the Micro Machines playsets Transport Chopper, Aircraft Carrier, and Air Cargo are packaged and sold without any of the Micro Machines pictured in the advertisements or on the packages. Therefore, the representations set forth in paragraph nine were false and misleading. PAR. 11. In its advertisements for the Xpanders Chopper/Assault Base, including but not limited to Exhibit D, respondent represented through depictions that the toy is fully assembled and ready for use, but failed to disclose that significant assembly is required prior to use. This fact would be material to consumers in their purchase decisions. Respondent's failure to disclose this fact, in light of the depictions in the advertisements and promotional materials, was a deceptive practice. PAR. 12. Through the use of the statements and depictions in

Complaint 114 F.T.C.

Exhibits A and D and others in advertisements not specifically set forth herein, respondent represented, directly or by implication, that the rotors of the Micro Machines playset Transport Chopper and the Xpanders Chopper/Assault Base turn and move by themselves without human assistance. PAR. 13. In truth and in fact, the rotors of the Micro Machines playset Transport Chopper and the Xpanders Chopper/Assault Base do not turn and move by themselves without human assistance. Therefore, the representations set forth in paragraph twelve were false and misleading. PAR. 14. The dissemination by respondent of the aforesaid false and misleading representations as alleged in this complaint constituted unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. Commissioner Starek not participating.

TOWNE, SILVERSTEIN, ROTTER, INC. 221 -218 Complaint

EXHIBIT A Exhibit A

RADIO TV REPORTS 41 East 42nd Street New York, NY 10017 (212) 309-1400 PRODUCT: GALOOB MICRO MACHINES TRANSPORT CHOPPER 90-03494 PROGRAM: CHIP 'N DALES 3/23/90 15 SEC.

RESCUE RANGERS WPIX-TV (NEW YORK) 4:55PM

1. (SFX-HELICOPTER) MAN:

Micro Machine Man here.

I'm so excited about the Micro Machines' Transport Chopper

2. that I'm going to land that chopper in the palm of my hand. Wow!

3. Like the simply amazing Micro Machines' Transport Chopper, with two totally terrific decks,

4. opening and closing doors, a fantastic pull down ramp, and real rotating motors.

5. Lands in your hand, chopper man! The Micro Machine Transport Chopper from Galoob.

6. Remember if it doesn't say Micro Machine, (SFX- HELICOPTER) it's not the real thing! (SFX OUT)

ALSO AVAILABLE IN COLOR VIDEO-TAPE CASSETTE While Radio TV Reports endeavors to assure the accuracy of material supplied by it, it cannot be responsible for mistakes or omissions Material supplied by Radio TV Reports may be used for file and reference purposes only It may not be reproduced sold or publicly demonstrated or exhibited

Complaint 114 F.T.C.

EXHIBIT B

TSR EXHIBIT B - Towne, Silverstein, Rotter Inc., 101 Park Avenue, New York, N.Y. 10178, Tel. (212) 557-5570 MICRO MACHINES Copy client GALOOB product AIRCRAFT CARRIER media TV size :15 date 3/16/88 job no. GAL-2039 XGLT-8405

AS PRODUCED

VIDEO AUDIO

Long shot of J. Moschitta standing The Micro Machine Man here...Aircraft in front of Aircraft Carrier. Carrier there! You can't have that.. SUPER: © 1988 Lewis Galoob Toys, Inc.

Aircraft Carrier becomes smaller and but you can have this: is reduced to fit in his hand. THE NEW MICRO MACHINE AIRCRAFT CARRIE PLAYSET.

The dramatically detailed, terrifical trimmed replica of the real thing,

Shot of Aircraft Carrier w/airplanes that holds 25 Micro Machines. on it.

SUPER: Vehicles Sold Separately.

CU of Aircraft Carrier elevators With fabulous fantastic features: moving w/airplanes. Two totally terrific elevators...

Shot of working hoist. real working hoist, runway

CU of Cargo arms. and two cargo arms.

Med. Shot of product showing moving THE NEW MICRO MACHINE AIRCRAFT CARRIE parts. PLAYSET. From Galoob.

SUPER: Micro Machines Remember, if it doesn't say Micro Galoob Machines,

CU of J. Moschitta. it's not the real thing.

001083

TOWNE, SILVERSTEIN, ROTTER, INC. 223 218 Complaint

EXHIBIT C

TSR Exhibit C Towne, Silverstein, Rotter Inc., 101 Park Avenue, New York, N.Y. 10178, Tel. (212) 557-5570

Copy client GALOOB product MICRO MACHINES media TV size Cargo Plane Playset :15 date 3/16/88 job no. GAL-2039 XGLT-8425

AS PRODUCED

VIDEO AUDIO

Moschitta:

J. Moschitta standing in front of Cargo Plane.

SUPER: © 1988 Lewis Galoob Toys, Inc.

I'm just the Micro Machine Man, but this isn't just a plane!

Cargo Plane becomes smaller and is reduced to fit in his hand.

It's the new, perfectly precise, stupendously styled

CU of J.M. holding product.

Micro Machine Cargo Plane Playset...

that holds 15 Micro Machines, with amazingly mini military features:

CU of product opening w/car coming out.

SUPER: Vehicles Sold Separately.

open and close nose...

Real working ramps, elevator and cargo door.

CU of J.M. flying product in front of camera.

Better get it before it takes off!

Med. Shot of product opening.

SUPER: Micro Machines Galoob

The New Micro Machine Mini Cargo Plane Playset. From Galoob.

CU of J. Moschitta

it's not the real thing!

001062

Complaint 114 F.T.C.

EXHIBIT D Radio TV Reports 41 East 42nd Street, New York, N.Y. 10017 (212) 309-1400 PRODUCT: XPANDERS/GALOOB 89-12520 PROGRAM: TEENAGE MUTANT NINJA 10/20/89 30 SEC. TURTLES WPIX-TV (NEW YORK) 3:46PM Exhibit D 1. (MUSIC/SFX) MEN SING:

Xpanders.

2. Expand at your command.

3. (SFX) 4. MAN: Company command? Time to expand.

5. ANNCR: The PT Assault Boat.

(SFX) Expands to an air team tactic force with torpedos, 6. sky fighters, 7. troops and guns.

8. (SFX-HELICOPTER) The Chopper. Expands 9. into an assault base with manpower, missile power, land and air defense.

10. MAN: Ready to expand? 11. MEN SING: Xpanders.

12. ANNCR: Xpanders. Open automatically to reveal your hidden strike force. Sold separately from Galoob.

(MUSIC & SFX OUT) ALSO AVAILABLE IN COLOR VIDEO-TAPE CASSETTE While Radio TV Reports, Inc. endeavors to assure the accuracy of material supplied by it, it cannot be responsible for mistakes or omissions Material supplied by Radio TV Reports, Inc. may be used for file and reference purposes only. It may not be reproduced, sold or publicly demonstrated or exhibited

TOWNE, SILVERSTEIN, ROTTER, INC. 225 218 Complaint EXHIBIT E

Exhibit E RADIO PRODUCT: GALOOB BOUNCIN' KIDS 90-03951 TV REPORTS PROGRAM: GHOSTBUSTERS 4/4/90 30 SEC. WNYW-TV (NEW YORK) 3:56PM 41 East 42nd Street New York, NY 10017 (212) 309-1400

1. (MUSIC) GIRL SINGS: Can you pirouette so sweet

2. or swing up high right off your feet.

3. Bouncin' Kids can, Bouncin' Kids can.

4. So much fun to take a ride

5. and can you skate like this outside.

6. Bouncin' Kids can, Bouncin' Kids can.

7. ANNCR: Bouncin' Kids love taking their Bouncin' Ponies out for a ride.

8. They groom their hair, hook up their wagons, and hop on inside.

9. GIRLS: Giddy up, now!

10. GIRLS SING: Riding Ponies in the sun, can you imagine so much fun?

11. Bouncin' Kids can!

12. From Galoob. (MUSIC OUT)

ALSO AVAILABLE IN COLOR VIDEO-TAPE CASSETTE While Radio TV Reports endeavors to assure the accuracy of material supplied by it, it cannot be responsible for mistakes or omissions Material supplied by Radio TV Reports may be used for file and reference purposes only. It may not be reproduced, sold or publicly demonstrated or exhibited

Decision and Order 114 F.T.C.

DECISION AND ORDER

The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and

The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commissions' Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Towne, Silverstein, Rotter, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 411 Lafayette Street, New York, New York. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER

For purposes of this order the required disclosures shall conform to the following requirements: (a) in television advertisements, a legible superscript in a manner to ensure clarity and prominence with a simultaneous voice-over recitation; except that any advertisement

TOWNE, SILVERSTEIN, ROTTER, INC. 227 - 218 Decision and Order

which, in view of its content and placement, is directed to adults need not contain a simultaneous voice-over recitation; (b) in printed advertisements and promotional materials, a disclosure printed in a typeface and color that are clear and prominent; (c) in radio advertisements, a statement included in a manner to ensure clarity and prominence. Any disclosure required by this order shall be in language understandable to children unless, in view of its content and placement, the advertisement is directed to adults. For purposes of this order adults are defined as individuals age thirteen (13) and older.

I.

It is ordered, That respondent Towne, Silverstein, Rotter, Inc., a corporation, its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising of any toy in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from depicting or describing two or more non-identical toys that are not available for purchase together as a set, unless respondent clearly and prominently discloses that the toys must be purchased separately.

II.

It is further ordered, That respondent Towne, Silverstein, Rotter, Inc., a corporation, its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising of any toy manufactured or sold in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act by Lewis Galoob Toys, Inc., or its successors or assigns, that requires significant assembly prior to use, do forthwith cease and desist from depicting or otherwise representing such toy as fully assembled unless respondent has a reasonable basis to believe that there is a clear and prominent disclosure on the packaging that the toy must be assembled before it is ready for use.

III.

It is further ordered, That respondent Towne, Silverstein, Rotter, Inc., a corporation, its successors and assigns, and their officers,

Decision and Order 114 F.T.C.

agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising of any toy in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting, directly or indirectly, that any such product moves by itself without human assistance or any other movement capability; provided, however, that nothing in this order shall be deemed to preclude the use of stop-action photography in television advertisements so long as the advertisement as a whole represents the toy in a non-deceptive manner, such as, but not limited to, by means of a clear and prominent depiction of hands-on play showing the method of operation of the toy.

IV.

It is further ordered, That respondent Towne, Silverstein, Rotter, Inc., and its successors and assigns, shall, for three (3) years after the date of the last dissemination of the representation to which they pertain, maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All materials that were relied upon in disseminating any representation covered by this order; B. All film footage used in connection with any advertisement that contains any representation covered by this order; and C. Any toy as well as the packaging for any toy involved in any representation covered by this order.

V.

It is further ordered, That respondent Towne, Silverstein, Rotter, Inc., shall distribute a copy of this order to each of its operating divisions, to each of its managerial employees, and to each of its officers, agents, representatives or employees engaged in the preparation or placement of advertising or other materials covered by this order and shall secure from each such person a signed statement acknowledging receipt of this order.

VI.

It is further ordered, That respondent Towne, Silverstein, Rotter,

TOWNE, SILVERSTEIN, ROTTER, INC. 229 218 Decision and Order

Inc., shall notify the Commission at least thirty (30) days prior to any proposed change such as the dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of this order.

VII.

It is further ordered, That respondent Towne, Silverstein, Rotter, Inc., shall, within sixty (60) days after service upon it of this order and at such other times as the Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with the requirements of this order. Commissioner Starek not participating.

Complaint 114 F.T.C.

IN THE MATTER OF

RICHARD CREW

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SECS. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3326. Complaint, Mar. 4, 1991—Decision, Mar. 4, 1991

This consent order prohibits, among other things, the advertiser and distributor of the Diet Patch from making unsubstantiated efficacy claims for any product or service and from misrepresenting that a paid advertisement is an independent program. In addition, the order prohibits the respondent from disseminating or broadcasting "The Michael Reagan Show."

Appearances

For the Commission: Tracy S. Thorleifson.

For the respondent: Pro se.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Richard Crew, an individual, hereinafter sometimes referred to as respondent, has 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 Richard Crew is an individual residing at 7968 Via Costa, Scottsdale, Arizona. Individually or in concert with others, he advertised, marketed and sold a weight-loss product, the "EuroTrym Diet Patch," primarily by means of a 30-minute television advertisement made to simulate a regular television talk show. PAR. 2. Respondent engaged in the advertising, offering for sale, sale and distribution of a food, drug, device, or cosmetic, the EuroTrym Diet Patch, a product found in commerce. The EuroTrym Diet Patch comes within the classification of "drug," as that term is defined in Section 15(c) of the FTC Act, 15 U.S.C. 55(c). PAR. 3. The acts and practices of respondent alleged in this