Great Southwestern Land Company, Inc., et al.

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I)T THE ~IA ITER GR,EAT SOliTH,VESTERN LAND CO~IPANY, INC. , ET A_ ORDER OF DIS3IISSAL, ETC., IX REGARD TO TI-IE ALLEGED VIOLA'I'ION OF THE FEDEP.:..~L TRADE CO~DnssIOX ACT Docket 8562, Complaint, Jiar. 15, 1963-Decision, Feb. , 1968 Order dismissing a complaint which charged an Albuquerque, New :\lexico, land development company ,...ith :::selling land through lllisrepresentation. CO:?lIPL_\.IXT Pursuant to the provisions of the Federal Trade Commission Act and bv virtue of the authoritv yestec1 in it. bv said Act. the Federal Trade Commission, having reason to believe. that Great Southwestern Land Company, Inc., a corporation. and Robert :-L Golllbin and Lyn Allen, inc1ivichw.lly and as officers of the said corporation, hereinafter GREAT SOUTHWESTERN LAND COMPANY, INC. , ET AL. 441 440 Complaint referred to as respondents, have violated the provisions of said Aet and it appearing to the Commission that a proceeding by it in respect thereof would be in the pub lie interest, hereby issues its complaint statingits charges in that respect as follows:

PARAGRAPH 1. Respondent Great Southwestern Land Company, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New ~1:mexico, with its principal office and place of business located at Suite 720 First National Bank Building, Albuquerque, New I\Iexieo.

Respondents Robert N. Golubin and Lyn Allen are officers of the corporate respondent. They formulate, direct and control the acts and practices of the corporate respondent, including the acts and praetiees hereinafter set forth. Their 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 and sale of pareels of real estate located in two separate areas of Taos County in the State of New ~1:exieo to the public in various parts of the United States by means of the United States mails and through agents and sales representatives. The two areas. are known as Carson Estates and Tres Piedrag Estates. PAr.. 3. Respondents, in conducting the business aforesaid, have sent and transmitted, and have caused to be sent and transmitted, contrades, deeds, eheeks and other papers and documents of a commercial nature from their place of business in the State of New ~1:exieo to purchasers and prospective purehasers located in various States other than the State of New Mexieo, and have thus engaged in extensive commercial intercourse, in commerce, as "commerce" is defined in the Federal Trade Commission Aet.

PAR. 4. Respondents, for the purpose of inducing the purchase of said parcels of real estate, have maintained exhibits at trade fairs held in various parts of the United States at which members of the public have been invited to fill out a registration form with the representation that they may win a free lot of land. All persons filling out said forms subsequently receive by mail a notice, and advertising material, indicating that they have been awarded a 1;4 acre lot free, the only obligation being to pay so-ealled "closing costs. Persons responding to the above offer then receive a deed to a 14 acre lot, together with further advertising, or a call by a salesman, urging them to buy an additional lot of the same size at a higher price. Among and typieaI, but not all inclusive, of the statements appearing in said advertising and promotional 111aterial are the following: 418-345' 72---- , Complaint 73 F.

Register for Free Land.

You have been awarded a ~4 acre building lot :10 * * in our new resort area subdivision, Carson Estates, Taos County, New Mexico . We ba"fe chosen this method of good will advertising * . This is a free lot . Your only expense is "" ~: '" closing cost of $49.30 . You may claim your award by enclosing check '" '" '" with the accompanying Land Award Certificate 'it '" "" Invigorating mountain air abundant forests, trout streams, crystal lakes, ski areas, hunting grounds, cultural centers oj! '" all are within easy reach of :10 "" '" fishing just minutes away 3/1 '" '" hunting within walkingCarson Estates distance '" '" * skiing but a few miles away. Every ranchette * '" * fronts on a graded road '" * '" readily accessible :II ... III The gently rolling terrain of Carson Estates is covered with verdant growth * * "' Dollar value for penny prices '" '" '" specially limited number of 1,4 acre resort ranchettes only $495 * '" '" closing costs of $49. 30 are paid but once. Telephone and electricity run parallel with Highway 111 and will be brought onto the individual' s property as be builds '" * '" water is obtained by pri,ate well '" '" '" it is our understanding that water can be obtained at approximately 75 feet * '" '" heating is obtained by use of butane, fuel oil, electricity or wood * * * Essentially the same statements have been made for the area known as Tles Piedras Estates.

PAR. 5. By and through the use of the above quoted statements and others of similar import not specifically set out herein, and by the use of pictures and photographs and statements made by respondents' sales. men, respondents have represented that:

1. Persons filling out the registration forms may win a free lot of land and that such persons have been awarded a 14 acre lot as part an advertising plan, the only expense required being the payment dosing costs of $49.30.

2. The land offered for sale is located within dose proximity to forests, fishing streams, lakes, ski areas, hunting grounds and eultural centers.

3. Each lot of said11ancl fronts on a graded road and is readily accessible from an established highway.

4. Saicllancl is covered with verdant growth and every part of said land is suitable as a homesite.

5. Said land offers value greatly in excess of the price asked and that the lots available at the price of $495 are limited in number. 6. Telephone service and eleetrieity are readily available to purchasers of said land and will be brought to the purchaser s property when he builds thereon.

GREAT SOUTHWESTERN LAND COMPANY, INC. , ET AL. 443 440 Complaint 7. ,Yater is available by private well at an approximate depth of feet and that butane gas, fuel oil, and e.lectl'icity are available for heating.

PAR. 6. In truth and in fact:

1. None of the persons filling out the registration forms win or reeeive a free lot of land. Every person who fills out said form is offered a lot of land upon payment of $49.30 which is not for closing costs but is the price of saicllot.

2. Said land is not located within close proximity to forests, fishing streams, lakes, ski areas, hunting grounds or cultural centers. 3. All lots of said land do notfl'ont on a graded road and are not readily aecesible from an established higlnnty. 4. Said land is not covered with verdant growth nor is every part of said land suitable as a homesite. 5. Said land does not offer value greatly in excess of the price asked and the lots available at the price of $495 are not limited in number. 6. Telephone service and electricity are not readily available to purchasers of said land and there is no assurance that said utilities "ill be brought to the. purchaser s property when he builds thereon. 7. ,Yater is not 'available by private well at a depth of approximately 75 feet. In fact, it is necessary to drill to a depth of several hundred feet to obtain water. Butane gas, fuel oil or electricity are not available for heating.

Therefore, the statements and representations set forth in Paragraphs Four and Five hereof were and are false, misleading and deceptive.

PAR. 7. At all times herein mentioned respondents have been, and are, in substantial competition in commerce, with corpon.tions, firms and individual.ls in the sale of products of the same general kind and nature as those sold by respondents.

PAR. 8. The use by respondents of the aforementioned false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to misle,ad and deceive substantial portion of the purchasing public into the erroneous and mistaken belief that such statements were, and are, true, and into the purchase of substantial quantities of respondents' products because of said mistaken and erroneous belief.

PAR. 9. The aforesaid ads 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 Aet.

444 ;FEDERAL TRADE COMMISSION DECISIONS. Complaint 73 F.

ORDER DISMISSING COMPL..-\INT This matter is before the Commission upon the motion of complaint counsel, filed November 27 1967, requesting the Commission to remove this proeee,ding from the suspense calendar and to dismiss the eomplaint on the ground that there is not sufficient public interest in the matter to warrant further proceedings; and It appea~ng to the Commission that the complaint herein was issued lYIaTeh 15, 1963, and that the matter was placed on the suspense calendar ~la,y 31, 1963, until further order of the Commission since it appeared that the individual respondents named in the complaint were defendants in a eriminal proceeding in the United States District Court for the District of New Mexico, charged with use of the mails to defraud on matters relating to those in this proceeding; and The Col111nission having determined that because the evidence which covered a period prior to 11areh 1963 is now old and stale the eomplaint should be dismissed:

It is ordel' That the complaint be, and it hereby is, dismissed without prejudice, however, to the right of the Commission to issue a new complaint or to take such further or other action against the respondents at any time in the future as may be warranted by the then existing eireumstances.