George Macy Companies, Inc.

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IN THE IA TTER OF GEORGE MACY COMPANIES, INC.

CONSENT ORDER , :KTC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\Il\fISSION ACT Docket C- 40. Complaint, Apr. 30 , lDG- Decision, Apr. 30, 19rj) Consent order requiring a New York City mail order dealer in books ancl other publications, certain of which were sold under tbe name of The Heritage Club, to cease representing falsely in letters to purportedly delinquent customers that the delinquent's name had been transmitted to a bona fide credit 313-121--70-- 618 FEDERAL TRADE CO)'I:\IISSION DBCISIQXS Complaint 631\ reporting agency or would be transferred to an attorney to institute suit for collection, and that if payment ,vas not made his credit rating would be adversely affected, and, by use of '; THE :"IAIL ORDER CREDIT RE- PORTING ASSOCIATION, IXC. " on letterheads, that a bona fide organiza tion by that name had prepared and sent the letters. IPL.\IXT Pursuant to the provisions of the Feder"l Trade Commission Act and by virtue of the authority vested in it by said Aet, the Federal Trade Commission, having reason to believe that George l\iacy Companies, Inc., a corporation, hereil1fl.after 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 compla.int stating its charges in that respect as follows:

P AHAGIL\PII 1. H.respondent Ge.orge 1Iac:y Companies, Inc., is a eorporation organized, existing and doing busine.ss under' and by virtue of the j"ws of the State of New York with its prineip"l offce and place of business located at 595 :Madison A venue, in the city of N e-V York, State of New York.

PAP.. 2. Respondent is now, and for some time last past ha.s been engaged in the advertising, offering for sale and sale or books and other merchandise to the general public by and tllrough the -United States Inrtils.

PAR. 3. In the course and conduct or its business, respondent now causes and for some time last past has caused its said books and merchandise, when solel, to be shipped from its place or business and sources of supply in the St"te of New York to purchasers thereof located in various other States of the United States and in the District of Columbia, and maintains, and at all times mentioned herein has maintained, a substantial course or trade in said books and merchan disc in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct or its business, respondent offers for sale certain books and publications through the United States mails under the name The Heritage Club. Said books and publications are distributed and payment made therefor through the United States mails.

For the purpose of inducing the p"yment of purportedly delinquent accounts that have arisen from the aforesaid transactions, respondent hits made certain statements and mpresentations in letters "nd notices disseminated through the United States m"ils to purportedly delinquent customers.

, ;, :j GEORGE l\IACY COMPAXIES, INC. 619 617 Complaint Typical, but not all inclusive of said statements and representations are the following:

a. On the letterhead of The Heritage Club:

The amount of money which you mye us is liot large! We hope you wil not let H create 11 rift in our pleasant relationship. It is not possible for us to determine whether you have been negligent, or \..hetller yon want to avoid paying for your books. ':. '" * If you arc a charming and honest person, then you \I-il be insulted if we turn your account over to an attorney for collection. Yet since you have not Vaid our bil, and have not replied to the letters we sent you, we must turn your account over to an attorney if you wil not \vrite us now.

b. On the letterhead:

THE !AIL ORDER CREDIT m PORTIXG ASSOCIATION, INC. CREDIT REPORTS-COLLECTIONS NEW YORK 18, N.

We have been notified by one of our members, The Heritage Club, of you!' failure to Vay 11 past-due account of * * * 'Vhile ours is a credit and collection agency, our endeavor 1s that of mediator: bct'YE'f'Il you a customer with a past-due account of $ and one of ani' members The Heritage Club.

The action on your part of either sending a payment or an explanation now is neces ary to circumvent The Heritage Club from turning your account over to special counsel.

IVe have been notified by the Heritage Club that in five days they wil fie will special counsel your debt of $ . Only your immediate remittance of this sum, to the Club at 595 Madison Ai'enue, 'ivil prevent ibis action. \R. 3. By and through the u,e of the aforesaid statements, repro" ,cntations and practices, and others of similar import not specifically set out herein, respondent represents and has represented that: a.. The delinquent customer s na,me has been transmitted to a bona fide credit reporting agency.

b. If payment is not made, the customer s general or public credit rating will be adversely affected.

c. " THE :\L\IL ORDER CREDIT HEPORTIXG ASSOCIATION, INC." is a separate bona fide collection and credit reporting agency located in N ew York City.

d. Respondent has turned over to said "THE MAIL CREDIT REPORTING ASSOOIATIOX, INC. , the delinquent account of the customerORDER for collection and other purposes. e. If payment is not made, the delinquent customer s account will be trnnsferred to an outside attorney 'Ivith instructions to institute suit to take other Jegal steps to collect the outstanding amount due. 620 FEDERAL TRADE CQM:MISSION DECISIONS Decision and Order f. The lette-rs on the letterhead of the said "THE MAIL CREDIT REPORTING ASSOCIATION , IXC. have been prepared and mailed by saidORDER orga, nization. PAR. 6. In truth and in fact:

a. The delinquent customer s llame has not been transmitted to a bona fide credit reporting agency.y.

b. If payment is not made, the customer s general or public credit rating is not adversely affected.

c. "THE :\IAIL ORDER CREDIT REPOnTING "\SSOCIATlOX : INC." is not a separate, bona fide collection agency or credit reporting agency. Saiel organization is a fictitious name utilized by respondent and others for the purpose of disseminating collection letters. d. Respondent has not turned over to said " THE MAIL CREDIT REPORTING ASSOCIATION", INC." the delinquent account of the customersORDER for c.ollection or any other purpose. e. If payment is not made, the delinquent customer s account is not transferred to an outside attorney with instructions to institute suit or other legal steps to collect the oustanding amount due. f. The letters on the letterhead of the said "THE MAIL CREDIT REPORTU\G ASSOCL\TIO , IXG." have not been prepared and mailed byORDER said organization. Said letters and notice.s have been prepared and mailed or caused to be mailed by respondent. Replies in response to said letters and notices are forwarded unopened to respondent. Therefore, the statements and representations as set forth in Paragraphs Four and Five hereof ,were and a.rc false, mislead Lng and deceptive.

PAR. 7. The use by respondent 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 errOIleous and mistaken belief that said staten1ents and representations were and are true and into the payment of substantial sums of money to respolJdent by rea Oll of said erroneous and mistaken belief.

PAR. 8. The aforesaid acts and practices of respondent as herein alleged, were and are aU to the prejudice and injury of the public and constituted, and now constitute, unfftir and deceptive acts and practices in comlnerce, in violation of Section t:i of the Federal Trade Commission Act.

DEGISIOK ..I,XD ORDER The Commission having heretofore determined to issue its complaint charging the respondent named in the caption hereof with violation of the Federal Trade Commission Act, and the respondent having been served with notice of said determination and with a copy of the . , GEOHGE l\IACY COYIPA-'\IES , INC. 621 617 Decision and Order complaint the Commission intended to issue, together with a. proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute 'an admission by re spondent that the law has been viobted as set forth in such complaint and waivers and prmrisions as required by the Commission s rules; and The Commission, having considered the agre.ement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes the following jurisdictional findings, and enters the follmvillg order:

1. Respondent George lacy Companies, Inc., is a, corporation organized, existing and doing business under and by virtue of the laws of the State of ew York, with its offce and principal place of business located at 59:) 1\Iadison Avenue, in the city of New York, State of 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.

onder It is of'dered That respondent George ::Iacy Companies, Inc. , a corporation, and its offcers, and respondent's agents, representative.s and employees, directly or through any corporate or other device in connection with the offering for sale, sale or distribution of books or other merc.handise, in commerce, as "commerce" is define-d in the Federal Trade Commission Act, do forthwith cease and desist from representing directly or by implication that: 1. A customer s name has been or wil be turned over to a bona fide credit reporting agency.y or that a customer s general or public credit rating will be ad, crsely affected unless respondent establishes "Where payment is not received, that the information of said delinquency is referred to separate bona fide credit reporting agency;

2. De.Jinquent accounts will be or have been turned over to a bona fide, separate eol1ection age,ney or attorney for collection unless respondent in fact turns such accounts ove,r to such agencies or attornev .

3. Delinquent accounts have been turned over to "THE 1LUL OImER CREDIT REPORTING ASSOCIATION INC. " for collection or any other purpose;

.

622 FEDERAL 'trade COMj\JISSIO:-T DECISIOXS Complaint 6;'; F. 4. ':THE ::LUL ORDER CREDIT REl'OHTIXG .'I.association: I1\C. . any other fictitious name, or any trlHle name mvned in whole or in part by respondent or over \\hieh respondent exercises any direction or control, is an independent, bona fide collection 01' credit reporting agency:

5. Notices or other communications ,,,hieh respondent has, or have caused to be, prepared, written or mailed, havebecn sent by THE :UAIL ORDER CREDIT TIEPORnXG -'.SSOCL\TION , INC. , or any ol:her person, firnl or agency.

It 'is .hwtheJ' OIylel'ed That the respondent herein shall, within sixty (60) days after service upon it of this order, file \with the Commission 3, report in writing setting forth in detail the manner and form in