Federal Credit Bureau of the United States, Inc.

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IN THE l\LA TTEH OF FEDERAL CREDIT BUREAU OF THE UNITED STATES, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE l"EDERAL TRADE COl\BIISSION ACT Docket 6989. Co'/ll)Jla, int, Dec. 1957-Decisi.on, May 24, 1958 Consent order requiring operators of a collection agency who maintained single office in Chicago, to cease representing falsely on printed forms. sales manuals furnished their agents, and by oral statements of agents that they had a nationwide departmentalized organization with local bonded collectors and attorneys in various States who would personally contact each debtor; that they would mal;:e prompt periodic reports 011 all accounts assigned for collection; that they maintained a credit reporting system available without cost to clients; that they would charge a maximum of 33~ percent of accounts they collected; that clients would receive their share of collections every 90 days or less; and, through use of their corporate name, that they were connected with the Unitet1 States Government; and to cease using misleading form letters to obtain by subterfuge information concerning alleged debtors. lV illim71 A. SOlneT8 Esq., for the Commission. 'TVanZ O. SwalwelZ Esq., of Chicago, Ill., for respondents. INITIAL DECISION BY JAMES A. PURCELL, l-IEARING EXAMINER The compla.int in this proceeding, issued December 13 1D57 charges the respondent Federal Credit Bureau of the United States, Inc. ft c.orporation, a-nd Cornelius J. Kelleher, Leonard 'V. Zinck, Alyee Kelleher, and l-Ia.rriet Zinck, individually and as officers of said corporation, ,,'ith violation of the Federal Trade Commission Act in connection with representations by them made in their business of soliciting Recounts for collection and improper use of a corporate name implying connection with or as an agency of the U. Government.

After the issuance of said complaint, respondents, on Februa.ry 1D58 entered into an a.agreement for a consent order with counsel in support of the eomplnint, disposing of all of the issues in this proc.eec1ing, which agreement was duly approved by the Director and Assistant Director of the Bureau of Litigation of the Federal Trade Commission. It ,vas expressly provided in said agreement that the signing thereof is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint.

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FEDERAL CREDIT BUREAU OF THE UNITED STATES, INC. , ET AL. 1675 1674 Decision By the terms of said agreement, the respondents admitted all of the jurisdictional allegations of the complaint and agreed that the record herein may be taken as though the COlnmission had made findings of jurisdictional facts in accordance 'with such anegations. By said agreemeIlt the parties expressly waived a hearing before the heflring examiner or the Commission, the making of findings of fact or eonelusions of law by the heating examiner or the Commission the f-filing of exceptions and oral argument before the Commissioi1 and all further and other procedure before the hearing examiner and the Commission to which the respondents may othenvise be entitled under the Federal Trade Commission Aet or the rules of practice of the Commission.

By said agreement, respondents further agreed that the order to cease and desist issued in accordanee with said agreement shall have the same force and effect ns though made niter a. full hea,ring, presentation of evidence and findings and coneJusions thereon, and specifically 'waived any and a 11 right, pmn',J' or privilege to lhal1engt' or contest the validity of such order.

It, was further provided that said agreement, together with the complaint, shall constitute the entire record herein; that the eol1lplaint herein may be used in eonstruing the terms of the order issued pursuant to said agreement; and that the said order may be altered modified 01' set aside. in the manner provided by statute for other orders of the Commission.

Said agreement recites that respondent Federal Credit Bureau of the United States, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of Illinois; that respondents Cornelius J. Kelleher, Leona-rd ,V. Zinck, Alyce Kelleher, an(1 J-Iarriet Zines\: are individuals and officers of said corporate respondent. Said corporate and individual respondents have their office and principal place of business located at 740+-2 South Racine Avenue., Chicago 36 , Ill., respondents having moved their place of business from the address set forth in the complaint issued he.rein. The 11Ptlring examiner has eonsi(1eted such agreement and the order therein contained. In order to carry out the obvious intent of the. parties, and to ebrify the language of "paragraph 2" of the order contained in said agreement, bllt in no ,,-ise to alter the inte,nt or enlarge the eirect. thereof, said "paragraph 2" has been re,,'orded as ",ill hereinafter in said onler appear. It appearing that said agreeme,nt ,md order :IS amended provides for an appropriate disposition of t,his proceeding, the same is hereby accepted nncl it.JlOut fl1liher notice to respondents, is ordered med upon becoming part of the 528577--60----107 Order 54 F.

Commission s decision in accordance with sections 3.21 and 3.25 of the rules of practice, and in consonance with the terms of said agreement, the hearing examiner finds that the Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of aU the respondents named herein, and that this proceeding is in the interest of the public, wherefore he issues the following order: ORDER It is onlered That respondent Federal Credit Bureau of the United States, Inc., a corporation, and its officers, and respondents Cornelius J. Kel1eher, Leonard ",V. Zinck, Alyce KeUeher, and Harriet Zii1ck individually and as officers of said coll)oration, and respondents representatives, agents and employees, directly or through any corporate or other device, in connection with the business of collecting accounts myed to others or in obtaining information concerning delinquent debtors, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist: 1. Representing, directly or indirectly, that: (a) Respondents operate a nationwide organization or employ bonded coUectors, investigators or attorneys in the various States of the United States, unless such is a fact.

(b) Debtors whose accounts are assigned or turned over to respondents for collection, will be pe,l'sonally contacted. ( c) Status reports or accounts will be made at specific periods of time, unless such is the fact.

( d) Hespondents are a credit reporting organization, either local or national.

(e) A maximum of 33113 percent, or any other percentage less than that actually charged, will be retained by ,respondents from accOlmts collected.

(f) Respondents will remit to clients their share of al1 accounts respondents collect within any specific time, unless such is the fact. (g) That respondents' business is depali.mentalized. 2. Failing to remit money due c.clients within the time agreed upon if no time has been agreed upon, within a reasonable time. 3. Using the corporate name Federal Credit Bureau of the United States, Inc., or any other coll)orate or trade name indicating that respondents, or any of them, are connected ,with or are an agency of the S. Government or representing, in any manner, that they are connected with or are an agency of the U.S. Government. FEDERAL CREDIT BUREAU OF THE UNITED STATES, INC., ET AL. 1677 1674 Decision 4. Using, or causing to be used in their behalf, in connection with the collection of accounts or in obtaining information concerning delinquent debtors, any forms, letters, questionnaires, or material printed or written, which do not expressly state that the information requested is for the purpose of collecting accounts and obtaining information concerning delinquent debtors.

DECISION OF THE COl\BIISSIOX AND ORDER TO FILE REPORT OF COl\IPLB,NCE The Commission having considered the hearing examiner s initial decision med April LJ, 1 D58, accepting an agreement containing a consent order to cease and desist theretofore executed by the respondents and counsel in support of the complaint, serviee of which was completed on April 23, 1958; and It appearing that the order in the initial decision departs from the order agreed upon by the parties in that the paragraph numbered 2" has been reworded, pull)ortedly "to entry out the obvious intent of the parties, and to clarify the langllage" of said paragraph; and The Commission being of the opinion that under the provisions of subsection (d) of seetion 3.25 of the rules of practice the hearing examiner has no authority to change the language of an order contained in an agreement. of the parties, even for the purpose of clarification:

It is ordend That the paragraph numbered "2" in the order condecision be, and it hereby is, modified to readtainedinas follows:the initial 2. Failing to remit money due clients within the time agreed upon, if no time has been agreed upon, within a reasonable time. I t is further onle7' That the initial decision as so modified shall, on l\lay 24, 1958, become the decision of the Commission. It i8 fuTthe'J' ordered That the respondents, Federal Credit Bureau of the United States, Inc., a corporation, and Cornelius J. J(elleher Leonard ,V. Zinek, Alyc.e Kelleher, and 1-1 arriet Zinck, individually and as otlicers of said corporation, shall, within sixty (60) days after service upon them of this decision, file with the Commission a report in writing, setting forth in detail the manner and form in which they have complied ,with the order contained in the aforesaid initial decision as modified.

Decision 54 F.