William Smarz

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IN THE MATTER OF WILLIAM SMARZ TRADING AS MERCANTILE AND MEDICAL CREDIT ADJUSTERS CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-1092. Complaint, Aug. 1966 Decisiorr, Aug. , 1966 Consent order requiring a Jersey City, N. , collection agency to cease using deceptive means to collect delinCluent accounts or implying that the information it solicits is for some offcial government purpose. 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 William Smarz, an individual, trading and doing business as Mercantile MERCANTILE AND MEDICAL CREDIT ADJUSTERS 493 492 Complaint and Medical Credit Adjusters, hereinafter 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 Wnliam Smarz is an individual trading and doing business as Mercantie and Medical Credit Adjusters, with his offce and principal place of business located at 26 Journal Square, Jersey City, N ow Jersey. PAR. 2. Respondent is now, and for some time last past has been, engaged in the operation of a collection agency and in collecting debts owed to others, upon a commission basis, contingent upon collection.

PAR. 3. In the course and conduct of his business, respondent now, and for some time last past has been, receiving accounts for collection from persons, firms and corporations located outside the State of New Jersey and has been referring accounts which he has received for collection to persons, firms and corporations in States other than the State of New Jersey and has been collecting accounts owed by persons, firms and corporations who are located outside the Scate of New Jersey. In addition thereto respondent has caused certain forms hereinafter referred to, to be transported from his place or business in the State of New Jersey to addresses in other States of the United States and has sent and received, by means of the United States mail, letters, checks and documents to and from States other than the State of New Jersey and maintains, and at all times herein mentioned has maintained a substantial course of trade in said business in commerce, as commerce" is defined in the Federal Trade Commission Act. PAR. 4. In the course and conduct of his business, respondent frequently desires to obtain information as to the- current addresses, places of employment and other pertinent information as to persons whose delinquent accounts the respondent is seeking to collect. For this purpose he uses, and has used, certain printed forms.

Typical and illustrative, but not all inclusive, of said forms is the following:

Complaint 70 F. T.

CURRENT STATUS BUREAU OF Certificate No. REQUEST ACCOUNTING AUDITS B. Division Applicants Must CLAIMANTS Dept. 68- L" Section Answer All Questions REIMBURSEMENT 1029 Vermont Ave. on Reverse Side in Or- PAYMENT der to Have This Form AUTHORIZATION Washington, D.C. 20003 Validated. The Claimants, through their Return This Form Distribution and Disburse Please Do Not Staple Completed Within 5 ment Agent Fold or Mutilate or At- Days in the Enve- WILL PAY AND TRANS- tach Paper Clips to lope Enclosed. MIT TO ADDRESSEE This Form. This Card the sum of money authorized Wil Be Processed herein, as a Through a Filng Refund-Reimbursement System.

For This Purpose ALLOW NINETY Claimant Has Established a Verification DAYS FOR RECEIPT Fund Having At All OF CHECK Times a Minimum of If Your Name Above Is Incorrect - Coned for actual disbursement made in affrmatively replying to this query No Stamps Necessary FIFTY FIVE DOLLARS READ CAREFULLY The Federal Trade Commission, an agency of the U. S. Government, has ordered that full truth and disclosure be given the recipient of this locate form, as to the purpose and intent of same. Such disclosure is indicated herein.

Present Home Address:

Tel. # State Zip# Apt. # Street Address City Your social security number If married, husband or wife social security number TO BE COMPLETED BY YOU IF MARRIED, HUSBAND OR WIFE TO COMPLETE Name of Employer: Name of Employer: Address: Address: City: . State: - City: - State: Your Signature: Your Signature: Date: Date: MERCANTILE AND MEDICAL CREDIT ADJUSTERS 495 492 Complaint This request from an agency, acting for its princi DO NOT WRITE pals, none of whom are government facilties in or- HERE der to elicit current data which will enable its Series Control principal to correct, and up- date pertinent records Index and where necessary, permit proper initiation of By- measures for recovery or adjudication of claims it Number has outstanding with addressee. Compliance and Dated or acknowledgment of his query, is neither mandatory, or fixed by statute.

Said form is approximately 7" x 3" in size, of pink color and is mailed in a brown offcial appearing window envelope with a return address of "N. T. B. Division, Department 88- ' SECTION 1029 VERMONT AVE. N. , WASHINGTON, D. C. 20005." Also enclosed is a return business reply envelope addressed the same as the return address on the envelope previously referred to. Each of these forms is enclosed with a return envelope, sealed and addressed, and, mailed in bulk to the said return address from where it is mailed to the respective addressees, postage having been placed thereon by a postage machine with a Washington C. postmark.

If any of the above forms are returned by the addressee in the return envelope they are mailed in bulk by some person at the Washington C. address to the respondent without being opened.

PAR. 5. Through the use of the name "Bureau of Accounting Audits, N. B. Division, Dept. 88- L' Section " and the Washington, D.C. address and postmark, and the imprinting of the words Fifty Five Dollars " and by other words on said forms, and the general format and appearance of said forms, respondent represents, directly or by implication, to those to whom the form is mailed:

(1) That a substantial sum of money is being held for the addressee;

(2) That the sender is communicating with the addressee in some offcial governmental capacity; and (3) That the information is required for offcial governmental purposes.

PAR. 6. In truth and in fact:

(1) No substantial sum of money is being held for the addressee by the respondent or by any other person or agency; (2) The sender is not acting in any offcial capacity but respondent desires the information solely for the purpose of locating the person to whom the form is addressed; and Decision and Order 70 F. T. (3) The information is not required for offcial purposes. The sole purpose of said form is to locate delinquent debtors by subterfnge. This practice constitutes a scheme to mislead and conceas the purpose for which the information is sought. Therefore, the aforesaid statements and representations as set forth in Paragraphs Four and Five hereof were, and are, false misleading and deceptive.

PAR. 7. The use by respondent, as hereinbefore set forth, of said form has had, and now has, the tendency and capacity to mislead and deceive persons to whom said forms are sent into the erroneous and mistaken belief that said representations and implications were, and are, true and to induce the recipients thereof to supply information which they otherwise would not have supplied.

PAR. 8. The aforesaid acts and practices of the respondent as herein aUeged, were, and are, aU to the prejudice and injury of the public and constituted, and now constitute, unfair and deceptive acts and practices in commerce, in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondent named in the caption hereof with and the respon-violation of the Federal Trade Commission Act, dent having been served with notice of said determination and with a copy of the 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 aU the jurisdictional facts set forth 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 respondent that the law has been violated as set forth in such complaint, and waivers and provisions as required by the Commission s rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement, makes the fonowing jurisdictional findings, and enters the fonowing order:

1. Respondent William Smarz is an individual trading and with doing business as Mercantie and Medical Credit Adjusters, MERCANTILE AND MEDICAL CREDIT ADJUSTERS 497 492 Decision and Order his offce and principal place of business located at 26 Journal Square, Jersey City, New Jersey.

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 It is ordered That the respondent Wiliam Smarz, trading and doing business as Mercantile and Medical Credit Adjusters, or any other name or names, and respondent's representatives agents and employees, directly or through any corporate or other device, in connection with the business of obtaining information concerning- delinquent debtors, or the offering for sale, sale or distribution of forms, or other material, for use in obtaining information concerning delinquent debtors, or in the collection of, or attempt to collect, delinquent accounts in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using, or placing in the hands of others for use, any form, questionnaire or other material, printed or written which does not clearly and conspicuously reveal that the purpose for which the information is requested is that of obtaining information concerning alleged delinquent debtors. 2. Representing, or placing in the hands of others any means by which they may represent, directly or by implication, that money or a free gift or any other thing of value, is being held for the person from whom information is sought. 3. Using the name "Bureau of Accounting Audits, N. Division, Department 88 ' L' Section" or any other name or words of similar import to designate, describe or refer to respondent' s business; or representing, directly or by implication, that any private inquiries, forms or communications emanate from or are connected with an offcial or governmental agency or are used to solicit information for offcial governmental purposes.

4. Misrepresenting, in any manner, the identity of the sender or origin of any inquiry, the purpose for which information is sought, or the nature or status of respondent' business.

5. Placing in the hands of others the means and instrumentalities whereby they may misrepresent in any manner the Complaint 70 F.

purpose for which information is sought by them or the nature or status of their business.

It is further ordered That the respondent herein shall, within sixty (60) days after service upon him of this order, file with the Commission a report in writing setting forth in detail the manner and form in which he has comphed with this order.