Center for Improved Communications

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IN THE MATTER OF CENTER FOR IMPROVED COMMUNICATIONS, ET AL. CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SECS. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3433. Complaint, June 15, 1993--Decision, June 15, 1993 This consent order requires, among other things, the New York corporation and its officer to correct false and deceptive claims in Yellow Pages advertisements, prominently post corrected information about Medicare coverage in their offices or provide it to consumers prior to purchase, and prohibits them from misrepresenting the coverage provided by any medical insurance for any hearing-related device or service they offer in the future. Appearances For the Commission: Collot Guerard and Eileen Harrington. For the respondents: Pro se.

COMPLAINT The Federal Trade Commission, having reason to believe that Center for Improved Communications, a corporation, and Jack Brown, individually and as an officer of Center for Improved Communications, ("respondents"), have violated certain provisions of the Federal Trade Commission Act, 15 U.S.C. 41 et seq., and it appearing to the Commission that a proceeding by it in respect _ thereof would be in the public interest, alleges: PARAGRAPH 1. Respondent Center for Improved Communications is a New York corporation with its main office and principal place of business located at 9720 Flatlands Avenue, Brooklyn, New York. Another office is located at 1301 57th Street, Brooklyn, New York. .

PAR. 2. Respondent Jack Brown is an audiologist who is an officer of Center for Improved Communications. He formulates, CENTER FOR IMPROVED COMMUNICATIONS, ET AL. 443 442 Complaint directs and controls the policies, acts and practices of Center for Improved Communications, and his address is the same as said corporation.

PAR. 3. Respondents are, and have been, selling hearing aids and offering hearing tests to the public. Hearing aids are a device within the meaning of Sections 12 and 15 of the Federal Trade Commission Act, 15 U.S.C. 52 and 55.

PAR. 4. The acts and practices of respondents alleged in this complaint are, and have been, in or affecting commerce, as commerce is defined in the Federal Trade Commission Act. PAR. 5. Respondents have placed, or caused to be placed, advertising for hearing aids in various Yellow Pages directories distributed to the general public, as a means of inducing the public to buy their products and services.

PAR. 6. Respondents’ advertising includes, but is not necessarily limited to, the attached Exhibit A. This advertising contains the following statement:

“Hearing Aids ... Complete Audiological Evaluations ... Medicare ... Accepted."

PAR. 7. Through the use of the statement contained in the advertisement referred to in paragraph six, including but not necessarily limited to the advertisement attached as Exhibit A, respondents have represented, directly or by implication, that Medicare will pay for the costs of hearing aids purchased from respondents.

PAR. 8. In truth and fact, Medicare will not pay for the costs of hearing aids purchased from respondents. Therefore, the representation made in paragraph seven was, and is, false and misleading. PAR. 9. Through the use of the statement contained in the advertisement referred to in paragraph six, including but not necessarily limited to the advertisement attached as Exhibit A, respondents have represented, directly or by implication, that Medicare will pay for the costs of hearing tests provided by respondents.

Complaint 116 F.T.C.

PAR. 10. In the advertising described in paragraph six, respondents have failed to disclose that Medicare does not pay for the costs of the hearing tests provided by respondents unless they are performed by order of a physician for the purpose of obtaining additional information necessary for the physician's evaluation of the need for or the appropriate type of medical or surgical treatment for a hearing deficit or related medical problem. In light of the representation made in paragraph nine these facts would be material to consumers in deciding whether to seek respondents’ services and the failure to disclose these facts was, and is, deceptive. PAR. 11. The dissemination by respondents of the aforesaid false and misleading representations as alleged in this complaint constituted, and now constitutes, an unfair or deceptive act or practice and the making of false advertisements in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act, 15 U.S.C. 45(a) and 52. CENTER FOR IMPROVED COMMUNICATIONS, ET AL. Complaint EXHIBIT A kye Broklyn BERR COMPL ETE HEA RING “SERVICES BY PROFESSIONAL AUDIOLOGISTS 3ROOKLYN'S ONLY AUTHORIZED CENTERS OF Miracle-Ear HEARING INSTRU: MENTS » SPECIALISTS IN THE FITTING OF DIGITAL HEARING AIDS @ STATE OF THE ART EQUIPPED OFFICES INCLUDING COMPUTER:ZED HEARING AID ANALYZER, AND REAL EAR MEASUREMENT.

» ALL PROFESSIONAL SERVICES PERFORMED EXCLUSIVELY BY W.Y, STATE LIC. AUDIOLOS:STS » SALES, SERVICE OW ALL MAKES & MODELS werceEw © Lit DSURANCE ABSIGNWENT ACCEPTED FOR i, S- PUEDCARE » Oe MEZA AID » FMPRE PLAN e MZALTOW AYE U2 HEALTH CARE TRAVELERS « TOTAL HEALTH o HNO ACCEPTED. RICHARD KANER, MA, C.C.C. « DIRECTOR Serving Brooklyn For Over 10 Yrs wee 463 CONVENIENT LOCATIONS eS Oar SRE DOME KTS.

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LOU MENT v awe Pras ALS DeetmDtD nb A EB FOR ALL DRANDS AS ABOUT OUR OUAMANTEED BATIBEACTION FOR PRECIBION TEATING FITTING AND ALPAIRG CALL FOR FREE BROCHURE BROOKLYN QUEENS sereariar, | tet outens BevD 745-5169 |FOREST HILLS ‘748-2630 ' 261-6800 Doctors. Genin t mm Raney == ney Have you R me ang etiort +. BSvernsed anh | NYNEX Yellow Pages Mave ner 204s we Meo oe WSS p20 remn Bellone Ming ntaey ha tawce os Wu Macey edn teeta bores Pa FOR5 1 85 2 1 2 1663 1164 118 15 73.978622 INFORMATION5 1 85 2 1 3 1791 1166 50 15 0.000000 Cacit4 1 85 2 2 0 1578 1184 210 32 -1 5 1 85 2 2 1 1578 1184 24 32 34.534309 bay5 1 85 2 2 2 1603 1187 35 24 46.334072 ont5 1 85 2 2 3 1641 1187 62 26 0.000000 une5 1 85 2 2 4 1709 1189 20 11 51.775032 wee5 1 85 2 2 5 1736 1189 30 13 12.039871 SOE5 1 85 2 2 6 1774 1189 14 11 12.039871 Ce2 1 86 0 0 0 1573 851 244 155 -1 3 1 86 1 0 0 1573 851 244 155 -1 4 1 86 1 1 0 1573 851 244 155 -1 5 1 86 1 1 1 1573 851 244 155 95.000000 2 1 87 0 0 0 1717 1016 158 7 -1 3 1 87 1 0 0 1717 1016 158 7 -1 4 1 87 1 1 0 1717 1016 158 7 -1 5 1 87 1 1 1 1717 1016 158 7 95.000000 2 1 88 0 0 0 1569 997 144 41 -1 3 1 88 1 0 0 1569 997 144 41 -1 4 1 88 1 1 0 1569 997 144 41 -1 5 1 88 1 1 1 1569 1010 55 28 34.358376 ALTO5 1 88 1 1 2 1631 997 51 41 36.294930 Mins5 1 88 1 1 3 1688 1018 25 11 74.404411 wos2 1 89 0 0 0 1587 1057 135 49 -1 3 1 89 1 0 0 1591 1058 125 28 -1 4 1 89 1 1 0 1591 1058 88 11 -1 5 1 89 1 1 1 1591 1050 24 28 22.997498 Fewe5 1 89 1 1 2 1624 1050 26 28 13.205322 Loc5 1 89 1 1 3 1659 1050 24 28 13.413704 ore,4 1 89 1 2 0 1587 1057 135 49 -1 5 1 89 1 2 1 1587 1057 20 49 42.287716 we5 1 89 1 2 2 1615 1061 107 41 15.250809 terion:2 1 90 0 0 0 1566 1240 305 10 -1 3 1 90 1 0 0 1566 1240 305 10 -1 4 1 90 1 1 0 1566 1240 305 10 -1 5 1 90 1 1 1 1566 1240 305 10 95.000000 2 1 91 0 0 0 1562 1205 313 119 -1 3 1 91 1 0 0 1562 1205 313 119 -1 4 1 91 1 1 0 1562 1205 313 119 -1 5 1 91 1 1 1 1562 1205 313 119 95.000000 2 1 92 0 0 0 1610 1338 224 34 -1 3 1 92 1 0 0 1610 1338 224 34 -1 4 1 92 1 1 0 1654 1338 136 15 -1 5 1 92 1 1 1 1654 1338 100 14 7.048332 Sheeperoad5 1 92 1 1 2 1763 1338 27 15 78.688049 Bay4 1 92 1 2 0 1610 1356 224 16 -1 5 1 92 1 2 1 1610 1356 61 16 71.778046 Hearings 1 92 1 2 2 1681 1357 25 12 45.111694 Avda5 1 92 1 2 3 1724 1357 9 12 87.385185 &5 1 92 1 2 4 1742 1356 92 13 72.767540 Evaluations2 1 93 0 0 0 1562 1460 306 11 -1 3 1 93 1 0 0 1562 1460 306 11 -1 4 1 93 1 1 0 1562 1460 306 11 -1 5 1 93 1 1 1 1562 1460 306 11 95.000000 2 1 94 0 0 0 1565 1018 8 463 -1 3 1 94 1 0 0 1565 1018 8 463 -1 4 1 94 1 1 0 1565 1018 8 463 -1 5 1 94 1 1 1 1565 1018 8 463 95.000000 2 1 95 0 0 0 1565 1018 9 463 -1 3 1 95 1 0 0 1565 1018 9 463 -1 4 1 95 1 1 0 1565 1018 9 463 -1 5 1 95 1 1 1 1565 1018 9 463 95.000000 2 1 96 0 0 0 1558 1757 308 11 -1 3 1 96 1 0 0 1558 1757 308 11 -1 4 1 96 1 1 0 1558 1757 308 11 -1 5 1 96 1 1 1 1558 1757 308 11 95.000000 2 1 97 0 0 0 1559 1775 231 50 -1 3 1 97 1 0 0 1559 1775 231 50 -1 4 1 97 1 1 0 1559 1775 225 17 -1 5 1 97 1 1 1 1559 1775 61 16 33.353149 Simgi.ty5 1 97 1 1 2 1630 1779 33 12 89.000465 yours 1 97 1 1 3 1673 1777 111 15 0.000000 buying—anow4 1 97 1 2 0 1560 1793 221 16 -1 5 1 97 1 2 1 1560 1794 26 14 79.349564 buys 1 97 1 2 2 1595 1794 8 12 33.783485 lt5 1 97 1 2 3 1618 1793 26 13 84.666069 Thes 1 97 1 2 4 1654 1796 55 11 25.567337 cesers5 1 97 1 2 5 1723 1797 8 8 92.431984 in5 1 97 1 2 6 1741 1797 40 12 82.295593 many4 1 97 1 3 0 1723 1815 67 10 -1 5 1 97 1 3 1 1723 1815 24 10 64.548996 ares 1 97 1 3 2 1761 1815 29 10 0.000000 hsie2 1 98 0 0 0 1681 1779 184 47 -1 3 1 98 1 0 0 1681 1779 184 47 -1 4 1 98 1 1 0 1681 1779 184 47 -1 5 1 98 1 1 1 1681 1815 42 10 95.000000 5 1 98 1 1 2 1787 1779 78 47 95.000000 2 1 99 0 0 0 1838 1834 6 8 -1 3 1 99 1 0 0 1838 1834 6 8 -1 4 1 99 1 1 0 1838 1834 6 8 -1 5 1 99 1 1 1 1838 1834 6 8 95.000000 2 1 100 0 0 0 1559 1846 305 35 -1 3 1 100 1 0 0 1559 1846 305 35 -1 4 1 100 1 1 0 1559 1846 305 14 -1 5 1 100 1 1 1 1559 1848 15 11 66.796097 105 1 100 1 1 2 1588 1846 45 14 77.645706 “Looks 1 100 1 1 3 1648 1848 45 12 57.710396 inside5 1 100 1 1 4 1707 1849 23 11 53.899796 Ines 1 100 1 1 5 1745 1848 55 12 59.150993 NYNEX5 1 100 1 1 6 1816 1849 48 11 0.000000 Yo..ce4 1 100 1 2 0 1560 1863 171 18 -1 5 1 100 1 2 1 1560 1863 53 17 72.638672 Pages®5 1 100 1 2 2 1623 1865 50 12 20.223900 before5 1 100 1 2 3 1681 1867 50 14 70.423798 buying2 1 101 0 0 0 1240 1894 625 19 -1 3 1 101 1 0 0 1240 1894 625 19 -1 4 1 101 1 1 0 1240 1894 625 19 -1 5 1 101 1 1 1 1240 1894 625 19 95.000000 2 1 102 0 0 0 1290 2006 346 110 -1 3 1 102 1 0 0 1290 2006 346 110 -1 4 1 102 1 1 0 1290 2006 346 110 -1 5 1 102 1 1 1 1290 2006 346 110 95.000000 2 1 103 0 0 0 1233 1903 14 532 -1 3 1 103 1 0 0 1233 1903 14 532 -1 4 1 103 1 1 0 1233 1903 14 532 -1 5 1 103 1 1 1 1233 1903 14 532 95.000000 2 1 104 0 0 0 1426 1960 143 24 -1 3 1 104 1 0 0 1426 1960 143 24 -1 4 1 104 1 1 0 1426 1960 143 24 -1 5 1 104 1 1 1 1426 1960 143 24 89.971504 EXHIBITS 1 104 1 1 2 1554 1944 19 53 89.971504 A2 1 105 0 0 0 1595 1968 241 124 -1 3 1 105 1 0 0 1595 1968 241 124 -1 4 1 105 1 1 0 1595 1968 241 59 -1 5 1 105 1 1 1 1595 1968 241 59 96.223267 DINING4 1 105 1 2 0 1636 2043 160 49 -1 5 1 105 1 2 1 1636 2043 160 49 96.407646 OUT?2 1 106 0 0 0 1290 2051 570 393 -1 3 1 106 1 0 0 1290 2051 570 393 -1 4 1 106 1 1 0 1796 2051 64 65 -1 5 1 106 1 1 1 1796 2051 64 65 95.000000 4 1 106 1 2 0 1290 2116 570 106 -1 5 1 106 1 2 1 1290 2116 570 106 95.000000 4 1 106 1 3 0 1290 2222 570 53 -1 5 1 106 1 3 1 1290 2222 296 53 95.000000 5 1 106 1 3 2 1820 2222 40 53 95.000000 4 1 106 1 4 0 1316 2275 220 169 -1 5 1 106 1 4 1 1316 2275 220 169 95.000000 2 1 107 0 0 0 1586 2235 246 147 -1 3 1 107 1 0 0 1586 2235 246 147 -1 4 1 107 1 1 0 1586 2235 246 27 -1 5 1 107 1 1 1 1586 2235 51 27 96.266228 Calls 1 107 1 1 2 1650 2236 37 26 96.791016 thes 1 107 1 1 3 1700 2237 132 25 96.749710 restaurant4 1 107 1 2 0 1587 2275 226 30 -1 5 1 107 1 2 1 1587 2275 36 27 96.213028 for5 1 107 1 2 2 1636 2282 12 19 94.609184 a5 1 107 1 2 3 1662 2276 151 29 88.416306 reservation,4 1 107 1 3 0 1587 2315 215 35 -1 5 1 107 1 3 1 1587 2315 44 26 96.748077 ands 1 107 1 3 2 1645 2316 40 26 96.329353 asks 1 107 1 3 3 1698 2316 35 26 96.890953 for5 1 107 1 3 4 1745 2322 57 28 96.890953 your4 1 107 1 4 0 1587 2355 182 27 -1 5 1 107 1 4 1 1587 2355 101 27 96.925858 favorite5 1 107 1 4 2 1702 2355 67 27 96.627144 table. Decision and Order 116 F.T.C.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of respondents named in the caption hereof, and respondents having been furnished thereafter with a copy of a draft complaint that the Bureau of Consumer Protection proposed to present to the Commission for its consideration and that, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and Respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondents of all the jurisdictional facts set forth in the aforesaid draft complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and .

The Commission having thereafter considered the matter and having determined that it had reason to believe that respondents have violated the said Act, and that the 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 Center for Improved Communications is a New York Corporation, with its office and principal place of business located at 9720 Flatlands Avenue, Brooklyn, New York. Another office is located at 130] 57th Street, Brooklyn, New York. Respondent Jack Brown is an audiologist who is an officer of Center for Improved Communications. He formulates, directs and controls the policies, acts and practices of Center for Improved Communications, and his address is 1301 57th Street, Brooklyn, New York.

CENTER FOR IMPROVED COMMUNICATIONS, ET AL. 447 442 Decision and Order Respondents are, and have been, selling hearing aids and offering hearing tests to the public. .

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

ORDER It is ordered, That respondents Center for Improved Communications, a New York corporation, its successors and assigns, and its officers, and Jack Brown, individually and as an officer of said corporation; and respondents’ agents, representatives, and employees, directly or through any corporation, subsidiary, division, affiliate, partnership, sole proprietorship, or other device, in connection with the advertising, promotion, sale, distribution or offering for sale of any hearing-related device or service in or affecting commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

A. Misrepresenting, directly or by implication, in any manner that Medicare will pay for the costs of such device or service. B. Misrepresenting, directly or by implication, in any manner that other types of medical insurance, whether federal, state, or private, will cover the costs of such device or service. II.

It is further ordered, That respondents Center for Improved Communications, a corporation, its successors and assigns, and its officers, and Jack Brown, individually and as an officer of said corporation, within fifteen (15) days after this order becomes final, send a certified letter to the publishers of all Yellow Pages directories that contain the representations in paragraphs seven and nine of the complaint. The letter shall state that any statements Decision and Order 116 F.T.C.

representing, directly or by implication, that Medicare will pay for the costs of hearing aids are to be eliminated from the next appearing edition in which it is possible to make changes, and in all subsequent editions. The letter shall also state that any statements representing, directly gr by implication, that Medicare will pay for the costs of hearing tests are to be eliminated from the next appearing edition in which it is possible to make changes, and in all subsequent editions, unless the representation is qualified by a statement that the hearing tests must be ordered in advance by a physician for medical diagnostic purposes. Respondents shall include a copy of this order with the letter. II.

It is further ordered, That respondents Center for Improved Communications, a corporation, its successors and assigns, and its officers, and Jack Brown, individually and as an officer of said corporation, within fifteen (15) days after this order becomes final, either:

A. Post in each of the locations in which respondents do -business, a prominent notice that is at least 12" by 15" in size that states clearly and conspicuously the following: MEDICARE DOES NOT COVER THE COSTS OF HEARING AIDS. MEDICARE ALSO DOES NOT COVER THE COSTS OF HEARING TESTS CONDUCTED IN THIS OFFICE UNLESS THE TESTS ARE FIRST ORDERED BY A PHYSICIAN FOR MEDICAL DIAGNOSTIC PUR- POSES.

This notice shall be clearly and conspicuously posted in the reception area so that it is visible to consumers as they enter the business location, and in each of the rooms where the hearing tests are conducted; or CENTER FOR IMPROVED COMMUNICATIONS, ET AL. 449 442 Decision and Order B. Provide each consumer prior to any discussion about the consumer's hearing problem a notice that is at least 8 1/2" by 11" in size that states clearly and conspicuously the following: MEDICARE DOES NOT COVER THE COSTS OF HEARING AIDS. MEDICARE ALSO DOES NOT COVER THE COSTS OF HEARING TESTS CONDUCTED IN THIS OFFICE UNLESS THE TESTS ARE FIRST ORDERED BY A PHYSICIAN FOR MEDICAL DIAGNOSTIC PUR- POSES.

Respondents shall obtain the consumer's signature on the notice. The signed notices shall be available to representatives of the Federal Trade Commission for inspection for a period of three (3) years from the date of service of this order. C. The requirements described in (A) and (B) of this paragraph shall be followed for no less than two (2) years after the last date of distribution by the publisher to the general public of the Yellow Pages directories containing the representations in paragraphs seven and nine of the complaint.

IV.

It is further ordered, That respondents Center for Improved Communications, a corporation, its successors and assigns, and its officers, and Jack Brown, individually and as an officer of said corporation, shall, for three (3) years after the date of this order, maintain and upon request make available to representatives of the Federal Trade Commission for inspection and copying all records demonstrating compliance with this order including but not necessarily limited to:

(1) Communications with publishers of the Yellow Page directories regarding the representations in paragraphs seven and nine of the complaint, and (2) The notices required by paragraph III(A) and (B) above. Decision and Order 116 F.T.C.

V.

It is further ordered, That respondents shall, within thirty (30) days after service upon them of this order, distribute a copy of the order to each of their operating divisions, subsidiaries, and related offices, to each of their managerial employees, to each of their employees responsible for advertising, and to each of their officers, agents, representatives or employees selling hearing aids and/or offering hearing tests.

VI.

It is further ordered, That the corporate respondent shall notify the Commission at least thirty (30) days prior to any proposed change in respondent such as dissolution, assignment, purchase, or sale resulting in a change of ownership or business structure, or any other change in respondent that may affect compliance obligations arising out of this order.

Vil.

It is further ordered, That the individual respondent shall hereafter promptly notify the Commission in the event of the discontinuance of his present business or employment and, for a period of five (5) years from the date of service of this order, shall promptly notify the Commission of each affiliation with a new business or a new employment whose activities would or might include the sale of hearing aids, and/or the offering of hearing tests, each such notice to include the respondent's new business address and a statement of the nature of such business or employment and a . description of the respondent's expected duties and responsibilities. VHl.

It is further ordered, That respondents shall, within sixty (60) days after service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with all requirements of this order. SHERWIN BASIL 451 451 Complaint