Hearing Care Associates-Arcadia

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

Complaint 116 F.T.C.

IN THE MATTER OF

HEARING CARE ASSOCIATES-ARCADIA, ET AL.

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

Docket C-3439. Complaint, June 15, 1993--Decision, June 15, 1993

This consent order requires, among other things, the California firms and their officer to correct false and deceptive claims in Yellow Pages advertisements, and to 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 Hearing Care Associates-Arcadia, Hearing Care Associates- Glendora, Hearing Care Associates-Los Angeles, Hearing Care Associates-Panorama City, corporations, and Hearing Care Associates-Alhambra, a partnership, and Gregory Frazer, individually and as an officer in said corporations and a partner in said partnership, ("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 Hearing Care Associates-Arcadia is a California corporation with its offices and principal place of business located at 612 West Duarte Road, Arcadia, California.

HEARING CARE ASSOCIATES-ARCADIA, ET AL. 495 494 Complaint

Respondent Hearing Care Associates-Glendora is a California corporation with its offices and principal place of business located at 210 South Grand Avenue, Glendora, California.

Respondent Hearing Care Associates-Los Angeles is a California corporation with its offices and principal place of business located at 1127 Wilshire Blvd., Los Angeles, California.

Respondent Hearing Care Associates-Panorama City is a California corporation with its offices and principal place of business located at 14425 Chase Street, Panorama City, California.

Respondent Hearing Care Associates-Alhambra is a partnership with its offices and principal place of business located at 7 West Main, Alhambra, California.

PAR. 2. Respondent Gregory Frazer is an audiologist who is an officer of said corporations, and a partner in said partnership. He formulates, directs and controls the policies, acts and practices of these corporations and the partnership. His principal place of business is located at 14425 Chase Street Panorama City, California.

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 respondent 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 Exhibits A - D. This advertising contains the following statements:

1. "Audiological Testing for Medicare " (Exhibit A) 2. "Hearing Aids and Listening Devices ... Complete Diagnostic Evaluations ... Medicare Welcomes" (Exhibit B) 3. "Hearing Aids and Listening Devices ... Medicare Welcome" ( Exhibit C)

Complaint 116 F.T.C.

4. "All Types of Hearing Aids ... Medicare Welcome" (Exhibit D)

PAR. 7. Through the use of the statements contained in the advertisements referred to in paragraph six, including but not limited to the advertisements attached as Exhibits A-D, 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 statements contained in the advertisements referred to in paragraph six, including but not limited to the advertisements attached as Exhibits A-D, respondents have represented, directly or by implication, that Medicare will pay for the costs of hearing tests provided by respondents.

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.

HEARING CARE ASSOCIATES-ARCADIA, ET AL. 497

494 Complaint

EXHIBIT A

See Local Calling Area As Shown In The White Information Pages [illegible] Hearing Aids —(Cont'd) [illegible] SEARS [illegible] "FOR INFORMATION CALL"

[illegible] NATIONAL HEARING AID SERVICE SINCE 1969 "OUR SERVICE SAYS WE CARE"

Specializing in:

• STARKEY • THE AWARD • QUALITONE • FIDELITY • ELECTONE • SIEMENS • MAICO • TELEX • WIDEX • AUDIOVOX • OTICON FACTORY LAB ON PREMISES ONE DAY SERVICE AVAILABLE ON REPAIRS • ALL MAKES AND MODELS "A HEARING AID SO TINY IT FITS TOTALLY WITHIN THE EAR" - —CALL FOR A DEMONSTRATION— MON.-FRI. 9:00-5:00 EVENINGS BY APPOINTMENT FREE HEARING TEST IN OUR OFFICE OR YOUR HOME 915-7766 104 W. COLLEGE (CORNER E. CITRUS & COLLEGE) DOWNTOWN COVINA [illegible] UNION MEMBERS & MOST INSURANCE PLANS WELCOME Hearing Analysis See Audiologist Hearing Therapy See Audiologist Heat Exchange Equipment [illegible] Heat Pumps [illegible] NEIGHBORHOOD HEARING AID CENTERS INC [illegible] HURDLE HEARING INSTRUMENT CENTER A HEARING CARE ASSOCIATES DISPENSING • RENTAL SERVICE • SUPPLIES • ALL TYPES OF HEARING AIDS GLENDORA FOOTHILL MEDICAL ARTS 210 S. Grand Ave.

335-7102 963-7418 ARCADIA 812 MEDICAL CENTER 612 W. Duarte Road 445-2844 445-1169 WE DO FITTING AND TESTING FOR BLUE CROSS & BLUE SHIELD [illegible] AUDIOLOGICAL TESTING FOR MEDICARE — MEDICAL ADVERTISE All Your Products And Services In The YELLOW PAGES Get More New Customers Faster At Less Cost Hearing Aid Center [illegible] DISCOUNTS TO ALL SENIOR CITIZENS 818 337-1225 • 818 338-0395 [illegible] EXHIBIT A

Complaint

EXHIBIT B

[illegible] HEARING AIDS SERVING LA FOR OVER 40 YEARS HEARING AID SERVICES OF HOLLYWOOD COMPLETELY EQUIPPED TECHNICAL FACILITIES FOR...

• HEARING EVALUATION • HEARING AID EVALUATION • HEARING AID ANALYSIS • SERVICE & REPAIR [illegible] WE SPECIALIZE IN DIFFICULT HEARING PROBLEMS SE HABLA ESPANOL 463-0988 JEFFREY GRAMA M.A.

CERTIFIED STATE LICENSED AUDIOLOGIST CUSTOM CANAL AID 1710 NORTH WILCOX - LOS ANGELES [illegible] [illegible] SEARS [illegible] AMERICAN HEARING AID CENTER MOST Makes of Hearing Aids For Molds & Batteries REPAIRS • SALES • SERVICE COMPLETE HEARING EVALUATION - NO CHARGE Medi-Cal Welcome [illegible] 383-1696 [illegible] A PAYNE FAMILY SERVICES COMPANY A-WEST APPLIANCE REPAIR [illegible] A&B SINCE 1937 NEED HELP FAST HEATING DRAIN CLEANING PLUMBING ELECTRICAL [illegible] SEE DAY HEARING AID CO.

[illegible] 380-3600 [illegible] FAIRFAX HEARING AID CENTER MOST MAJOR BRANDS SALES - REPAIRING SERVICE - BATTERIES FREE HEARING TEST OPEN MON FR 9:30 5:00 213 653-1479 537 N. FAIRFAX AVE [illegible]

Exhibit B

HEARING CARE ASSOCIATES-ARCADIA, ET AL. 499

494 Complaint

EXHIBIT C

"See Local Calling Area As Shown In The White Information Pages" Hearing—Hearing 511 Hearing Aids —(Cont'd) [illegible] SPECIALIZING IN SMALL CANAL HEARING AIDS & HARD TO FIT HEARING LOSSES [illegible] HEARING EVALUATION HEARING AIDS MOST BRANDS & TYPES COMPETITIVE PRICES [illegible] 544-1702 [illegible] AMERICAN HEARING AID CENTER OF THE SOUTH BAY OVER 25 YEARS EXPERIENCE SALES • SERVICE • REPAIRS • ALL MAKES WIDE VARIETY OF INSTRUMENTS FOR EVERY CORRECTABLE HEARING LOSS [illegible] SE HABLA ESPANOL 373-8753 3435 LOMITA BLVD. SUITE 111 TORRANCE [illegible] MEDICAL CENTER [illegible] Heat Treating-Metal [illegible] CONES LONG BEACH HEARING AID SPECIALISTS DR. KENNETH C. SMITH Licensed Audiologist & Hearing Aid Specialist ON Staff All Major Brands of Hearing Aids SALES & SERVICE BATTERIES • ACCESSORIES [illegible] 432-8961 427 ATLANTIC AVE.

LONG BEACH [illegible] Share The News By LONG DISTANCE [illegible] Heating Contractors [illegible] AARIN'S BREATHE EASY FURNACE & DUCT CLEANING [illegible] HEATING PLUMBING PROBLEMS? [illegible] SE HABLA ESPANOL CALL 376-0779 [illegible] HEARING AID CENTER INC.

[illegible] AUDIOLOGISTS [illegible] COMPLETE FOLLOW-UP SERVICES BY APPOINTMENT ONLY [illegible] 534-5949 [illegible] HEARING CARE ASSOCIATES [illegible] 372-5812 [illegible] [illegible] SAMPLES OF ADVERTISING LOOK IN THE BACK OF THE GTE EVERYTHING PAGES FOR AD IDEAS.

[illegible] YELLOW PAGES Tell "Where To Buy It"

MOM & DAD I USE DRUGS UNFORTUNATE SIGNS OF DRUG USE AREN'T THIS OBVIOUS.

[illegible]

Exhibit C

Complaint 116 F.T.C.

EXHIBIT D

LA NE - Alhambra 1/90 Health Hearing [illegible] ALHAMBRA HEARING AIDS & AUDIOLOGY

CHARLES HILL, H.A.D.

GREGORY FRAZER, Ph.D.

JAMI TANIHANA, M.A.

BI-HWA TSENG, M.A.

[illegible] [illegible] [illegible]

HEARING CARE ASSOCIATES HILL'S HEARING AID SERVICE

English & Spanish (818) 281-9659 (818) 289-0618

7 WEST MAIN • ALHAMBRA ENTRANCE & FREE PARKING IN THE REAR

Many of the advertisers listed in the Smart Yellow Pages must be licensed or registered by the State Department of Consumer Affairs.

Ask to see a license or proof of registration when purchasing professional services.

ALHAMBRA HEARING AID CENTER 818 284-4162 ALL BRANDS - ALL STYLES INCLUDING [illegible] REPAIRS ON ALL MAKES LOANERS • RENTALS • BATTERIES

HURDLE HEARING INSTRUMENT CENTER [illegible] GLENDORA FOOTHILL MEDICAL ARTS 210 S Grand Ave 818-335-7102 818-963-7418 HEARING CARE ASSOCIATES ARCADIA [illegible] 612 W Duarte Road 818 445-2844 818 445-1165

Exhibit D

HEARING CARE ASSOCIATES-ARCADIA, ET AL. 501 494 Decision and Order 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 the 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 Hearing Care Associates-Arcadia is a California corporation with its offices and principal place of business at 612 Duarte Road, Arcadia, California.

Respondent Hearing Care Associates-Glendora is a California corporation with its offices and principal place of business at 210 South Grand Avenue, Glendora, California.

Respondent Hearing Care Associates-Los Angeles is a California corporation with its offices and principal place of business at 1127 Wilshire Blvd., Los Angeles, California.

Decision and Order 116 F.T.C.

Respondent Hearing Care Associates-Panorama City is a California corporation with its offices and principal place of business at 14425 Chase Street, Panorama City, California. Respondent Hearing Care Associates-Alhambra is a partnership with its offices and principal place of business located at 7 West Main Alhambra, California.

Respondent Gregory Frazer is an audiologist who is an officer of said corporations, and a partner in said partnership. He formulates, directs and controls the policies, acts and practices of these corporations and the partnership. His principal place of business is located at 14425 Chase Street, Panorama City, California.

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 is in the public interest.

ORDER

I.

It is ordered, That respondents Hearing Care Associates- Arcadia, Hearing Care Associates-Glendora, Hearing Care Associates-Los Angeles, Hearing Care Associates-Panorama City, California corporations, and Hearing Care Associates-Alhambra, a partnership, their successors and assigns, and their officers and Gregory Frazer, individually and as an officer of said corporations and partner in said partnership; 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:

HEARING CARE ASSOCIATES-ARCADIA, ET AL. 503 494 Decision and Order

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 Hearing Care Associates-Arcadia, Hearing Care Associates-Glendora, Hearing Care Associates-Los Angeles, Hearing Care Associates-Panorama City, corporations, and Hearing Care Associates-Alhambra, a partnership, their successor's and assigns, and their officers, and Gregory Frazer, individually and as an officer of said corporations and partner in said partnership, 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 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 or 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. Respon- dents shall include a copy of this order with the letter.

III.

It is further ordered, That respondents Hearing Care Associates-Arcadia, Hearing Care Associates-Glendora, Hearing Care Associates-Los Angeles, Hearing Care Associates-Panorama City, corporations, and Hearing Care Associates-Alhambra, a partnership,

Decision and Order 116 F.T.C.

their successors and assigns, and their officers, and Gregory Frazer, individually and as an officer of said corporations and partner in said partnership, 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

B. Provide each consumer prior to any discussion about the consumer's hearing problem a notice that is at least 8 ½" 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

HEARING CARE ASSOCIATES-ARCADIA, ET AL. 505

494 Decision and Order

Pages directories containing the representations in paragraphs seven and nine of the complaint.

IV.

It is further ordered, That respondents Hearing Care Associates-Arcadia, Hearing Care Associates-Glendora, Hearing Care Associates-Los Angeles, Hearing Care Associates-Panorama City, corporations, and Hearing Care Associates-Alhambra, a partnership, their successors and assigns, and their officers, and Gregory Frazer, individually and as an officer of said corporations and partner in said partnership, 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 Pages directories regarding the representations in paragraphs seven and nine of the complaint, and (2) The notices required by paragraph III(A) and (B) above.

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 division, 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 and partnership respondents shall notify the Commission at least thirty (30) days

Decision and Order 116 F.T.C.

prior to any proposed change in respondents such as dissolution, assignment, purchase, or sale resulting in a change of ownership or business structure, or any other change in respondents that may affect compliance obligations arising out of this order.

VII.

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.

VIII.

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.

SERVICE CORPORATION INTERNATIONAL 507

507 Complaint

IN THE MATTER OF

SERVICE CORPORATION INTERNATIONAL

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 7 OF THE CLAYTON ACT AND SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3440. Complaint, June 15, 1993--Decision, June 15, 1993

This consent order requires, among other things, the Texas corporation to divest, to a Commission-approved acquirer, five funeral homes, and to obtain prior Commission approval, for a period of ten years, before acquiring any additional funeral homes in certain Georgia and Tennessee areas.

Appearances

For the Commission: Daniel P. Ducore and Katharine B. Alphin.

For the respondent: Michael Byowitz, Wachtell, Lipton, Rosen & Katz, New York, N.Y.

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 Service Corporation International ("SCI"), a corporation subject to the jurisdiction of the Commission, proposes to acquire substantially all of the common stock of Sentinel Group, Inc. (Sentinel), in violation of the provisions of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, 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 as follows: