Cast-Brick, Inc.

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

IN THE MATTER OF CAST- BRICK INC. ET AL.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-l098. Complaint, Aug. 1966-Decision Aug. 19fj6 Consent order requiring a St. Louis, Mo., home improvement company to cease using false pricing, and deceptive savings claims, and misrepresenting the physical qualities of its products. 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 Cast. Brick, Inc. , a corporation, and Chester E. Swindel, individually and as an offcer of said corporation, hereinafter referred to as respondents, have 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. Cast- Brick, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Missouri, with its principal offce and place of business located at 4525 Riverview Boulevard, in the city of St. Louis State of Missouri.

Chester E. Swindel is an offcer of the corporate respondent. He formulates, directs and controls the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondent.

PAR. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distdbution of various items of home improvements, including residential siding to the purchasing public.

Complaint 70 F. T.

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of Missouri to purchasers thereof located in other States of the United States, and maintain, and at alj times mentioned herein have maintained, a substantial course of trade in said products in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business, and for the purpose of inducing the purchase of their products, respondents represent, and have represented, directly or by implication, by advertising and promotional material and by direct oral solicitations made by respondents or their salesmen or representatives that:

1. Homes of prospective purchasers have been specialJy selected as model homes for the installation of respondents' siding; after installation such homes would be used as points of reference for demonstration and advertising purposes by respondents; and as a result of allowing their homes to be used as models, purchasers would be granted reduced prices or would receive allowances discounts or commissions.

2. Respondents' products are being offered for sale at special or reduced prices, and that savings are thereby afforded purchasers from respondents' regular selling prices. 3. Products sold by respondents wil never require repainting or repairing.

4. The color of the respondents' products wil remain unchanged and wil last a lifetime.

5. Respondents' products are everlasting and are made of indestructible materials.

6. Storm, hail and other elements wil not damage the respondents' products.

7. Respondents' products and installations are " unconditionally guaranteed" in every respect without condition or limitation for an unlimited period of time.

PAR. 5. In truth and in fact:

1. Homes of prospective purchasers have not been selected as model homes for the installation of respondents' siding; after instal1ations such homes are not used for demonstration and advertising purposes by respondents; and purchasers, as a result of allowing their homes to be used as models, are not granted reduced prices, nor do they receive allowances, discounts or commissions. CAST- BRICK, INC., ET AL. 525 523 Complaint 2. Respondents' products are not being offered for sale at special or reduced prices and savings are not granted respondents customers because of a reduction from respondents' regular selling price. In fact, respondents do not have a regular sellng price but the price at which respondents' products are sold vary from customer to customer depending on the resistance of the prospective purchaser.

3. Products sold by respondents wi1 require painting and repairing.

4. The color of respondents' products wi1 change and wil not last a Jifetime.

5. The respondents' products are not everlasting and can be destroyed.

6. Storms, hail and other elements wil damage respondents products.

7. Respondents' products and installations are not unconditionally guaranteed in every respect without conditions or limitations for an unlimited period of time. Such guarantee as may be provided is subject to numerous terms, conditions and limitations. Therefore, the statements and representations as set forth in Paragraph Four hereof were and are false, misleading and deceptive.

PAR. 6. Respondents, in the manner aforesaid have made numerous representations in promotional literature and advertising material as to the composition, characteristics and quality of their Cast- Stone " siding.

Typical and ilustrative, but not all inclusive thereof, are the following:

Stone Fronts Beautiful Homes of Stone This is the Stone Age Beautiful Interiors of Stone Exterior Walls Through the use of the foregoing statements and respresentations and pictorial representations made in connection therewith and others of similar import and meaning, but not specifically set out herein, respondents have represented and do now represent directly or by implication, that their so- called "Cast- Stone " siding is genuine stone in its natural state. In truth and in fact, respondents' so-called " Cast- Stone " siding is imitation stone siding and is not genuine stone or stone in its natural state.

Decision and Order 70 F.

Therefore, the foregoing statements and representations were and are false, misleading and deceptive. PAR. 7. In the conduct of their business and at all times mentioned herein, respondents have been in substantia! competition in commerce, with corporations, firms and individuals in the sale of various items of home improvements, including residential siding, of the same general kind and nature as that sold by respondents.

PAR. 8. The use by respondents 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 erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents' products by reason of said erroneous and mistaken belief. PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce, in violation of Section 5 of the Federal Trade Commission Act. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Bureau of Deceptive Practices proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of an the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such complaint, and waivers and provisions as required by the Commission s rnles; and The Commission, having reason to believe that the respondents have violated the Federal Trade Commission Act and having determined that complaint should issue stating its charges in that CAST- BRICK, INC. , ET AL. 527 523 Decision and Order respect, hereby issues its complaint, accepts said agreement makes the following jurisdictional findings, and enters the following order:

1. Respondent Cast- Brick, Inc. , is a corporation organized existing and doing business under and by virtue of the Jaws of the State of Missouri, with its offce and principal place of business located at 4525 Riverview Boulevard, in the city of St. Louis, State of Missouri.

Respondent Chester E. Swindel is an individual and an offcer of said corporation, and his address is the same as that of said corporation.

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

ORDER It is ordered That respondents Cast- Brick, Inc. , a corporation, and its offcers, and Chester E. Swindel, individually and as an offcer of said corporation, and respondents' representatives agents and employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of residential siding, or other products, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing, directly or by implication: A. That the home of any of respondents' customers or prospective customers, has been selected to be used or wil be used as a model horne, or otherwise, for advertising purposes.

B. That any allowance, discount or commission is granted by respondents to purchasers in return for permitting the premises on which respondents' products are installed to be used for model homes or demonstration purposes.

C. That any price for respondents' products is a special or reduced price, unless such price constitutes a significant reduction from an established selling price at which such products have been sold in substantial quantities by respondents in the recent regular course of their business; or misrepresenting in any manner the savings available to purchasers.

Syllabus 70 F. T.

D. That products sold by respondents wi1 never require painting or repair.

E. That the colors in which respondents' products are furnished wi1 remain unchanged or wil last a Jifetime. F. That respondents' products are everlasting or are made of indestructible materials.

G. That storms, hail or other elements wi1 not damage respondents' products.

H. That any of respondents' products or installations are guaranteed unless the nature and extent of the guarantee, the identity of the guarantor, and the manner in which the guarantor wil perform thereunder are cleady and conspicuously disclosed.

I. Respondents' imitation stone siding is natural stone or stone in its natural state.

II. Using the word stone to describe or refer to any product not composed solely of natural stone, unless immediately preceded by the word "imitation" or "simulated" Provided Nothing herein shall prevent the use of the trade name Cast- Stone.

III. Misrepresenting, in any manner, the effcacy, durability, effciency, composition, or quality of respondents' products.

It is further ordered That the respondents herein shall, within sixty (60) days after service upon them 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 this order.