Kansas City Quilting Co., Inc.

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

IN THE :.\IArrER OF KANSAS CITY QrILTIKG- CO.. lXC., ET ~\L.

THE Y1-:))-COXSEXT ORDER, ETC., IN REGARD TO THE .\LLEUED nol.\TlOX OF ERAL TRADE COl\Il\IISSIOX , TI-IE WOOL PHODC("rs L1BELIKG \XD THE TEXTILE FIBER PRODFCTS IDEXTIFICATIOK .\C'TS Docket C-1314. Com.plaint, ;liar, 25. 1968-Dccision. Mar. 1968 Consent order requiring a Kansas City, )10., manufacturer of quilted woolen fabrics to cease misbranding its wool and textile fiber products 'find failing to maintain required records.

COl\IPLAINT Pursuant to the. pro\.'isions of the Federal Trade Commission Act the. ,Vonl Products Label illg Act of In:)!) and the Textile Fiber Prodllet.s Identific.ation Act, and by ,-irtlle of the. authority ,' csteel in it said Acts, the. Federal Trade Commission, having reason to belic\' that. E::ansas City Quilting Co. ~ Ine.. n corporation. and Lionel . , indi"\~idl1a1Jy and as officers of saidI\\mst and Solomon Burstein corporation, here,inaftel' referred to as respondents, have "\'iolated the provisions of said Acts and the Rules and Regulations promulgated 1!)~1D and the Textile Fiber under the, 'V 001 Products Labeling ..:-\et of Products Identific.ation Ad and it appearing to the Commission that a proc.eeding by it in respect thereof would be in the public. interest. hereby issues its complaint stating its charges in that respect as follo\ys: PARAGIL\PII 1. Respondent Kansas City Quilting Co., Inc., is a corporation organized, existing and doing business under and by virtue of theht "\ys of the State of ~iissouri.

Respondents Lionel tJ. Kunst and Solomon Burstein are officers of said corporate respondent. They control the ads, practices and poEcies -of said corporate respondent.

Respondents are engaged in the manufacture and sale of wool and textile fiber products, including quilted fabries, with their office and principal place of business loeaffid at 2441 Charlotte Street, ICansas City, ilfi&"Q.Ouri.

KANSAS CITY QUILTING CO.. INC. . ET AL. 509 ::;08 Complaint \R. 2. Respondents, now and for some time last past, hate manufactured for introduction into commerce~ introduced into commerce. sold, transported, distributed, delivered for shipment, shipped, and offered for sale, in commerce, as "commerce'~ is defined in the ,V 001 Products Labeling ~-\.ct of 1D3D, wool products as '"wool proc1uct~~ is clenned therein.

PAR. 3. Certain of said "\,odl products "\,ere misbranded by the respondents within the intent and meaning of Section 4 (a) (1) of the 'V 001 Products Labeling Act of IDED and Rules and Regulations promulgated thereunder, in that they "-ere falsely and deceptively stamped, tagged, labeled, or otherwise identified with respect to the character and amount of the constituent fibers contained therein. Among snell misbranded "0'01 products, but not limited thereto, "\,ere quilted fabrics stamped, tagged, labeled, or otherwise identified by respondents as "50% Acrylie, 50% Other Fibers/' whereas in truth and in fact, said products contained woolen fibers together "\,ith substantia,lly different fibers and amounts of fibers than as represented. PAR. -t. Certain of said wool products "-ere further misbranded by respondents in that they "\"ere not stamped, labeled, tagged, or ot he1'ise identified as required under the provisions of Section -1: (a) en of the ,Vaal Products Labeling Act of ID:)!) and in the manner ane! form as prescribed by the Rules and Hegulations promulgated under s~id Ad.

Among such misbranded "' 001 products, but not limited thereto, was a wool product with a label on or affixed thereto "\,hieh failed to disclose the percentage of the total fiber ,,-eight of the said wool product exclusive of ornamentation not exceeding 5 per centum of the total fiber-r weight, of (1) wool: (2) reproeesse(l "\'"001; (3) reused "001; (4) each fiber other than "' 001, when said percentage by ,,-eight of such fiber was 5 per centuIll or more; and (5) the, aggregate of a other fibers.

\R. :'5. The acts and practices of the respondents as set forth above were, and are, in violation of the ,Vaal Products Labeling Ad of I03!) and the Rules and Regulations promulgated thereunder, and COILstitnted, and now constitute, unfair methods of competition nndnnf,lir and deceptive acts and practices, in commerce "\,within the meaning the Fede-ra-l Trade Commission Act.

PAR. 6. Responclellts are no"\" and for some time last past ha ,-e been engaged in the introdl1ction, deli,-ery for introduction, manuf,ldure for introduction, sale, ach-ertising, and oflering for sale, in commerce, and in the transportation 01' causing to be transported in commerce, and the importation into the United Stat('s of textile fiber products: and ha-ve ;:, 510 FEDERAL TRADE COMj\USSION DECISIONS Decision and Order 73 F.

sold, offered for sale, ach' ertised, delivered, transported and caused to transported, textile fiber products, "which had been advertised or offered for sale in commerce; and have sold, offered for sale, advertised, delivered, transported and caused to be transported, after shipment in commerce, textile fiber products, either in their original state or contained in other textile fiber products; as the terms "commerce" and t.textile fiber products" are defined in the Textile Fiber Products Identification Aet.

PAR. 7. Respondents have failed to ma,ultain proper lec.ords showing the fiber content of the textile fiber products manufaet.ured by them in violation of Seetion 6 of the Textile Fiber Products Identification Act and Rule 39 of the Regulations promulgated thereunder. PAR. 8. The acts and practices of respondents, as set forth in Paragraph Seven above were, and are, in violation of the Textile Fiber Products Identification Act and the Rules and Regulations promulgated there,under, and constituted, and now constitute, unfair methods of competition and unfair and deceptive acts and practices in commerce under the Federal Trade Commision 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 "ith a copy of a draft of cori1plaint which the Bureau of Textiles and Furs proposed to present to the Commission for its consideration and which if issued by the Commission, "ould charge respondents with violation of the Federal Trade Commission Aet, the ,iT 001 Products Labeling Act of 1939 and the Textile Fiber Products Identification Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreeme, is for settlement purposes only nnd does not constitute, an admission by respondents that the law has been violated as alleged in such complaint and waivers and other provisions as required by the Commission Rules; and The Commission hllving thereafter considered the matter and haviner determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its eharo-es in that res )ect, and having thereupon accepted the executed consent agreeme,nt and placed such agreement on the public record KANSAS CITY QUILTING CO., INC. , ET AL. 511 508 Order fora period of thirty (30) days, now in further conformity with the procedure prescribed in S 2.34 (b) of its Rules, the, Commission hereby issues its complaint, makes the follmving jurisdictional findings, and enters the following order:

1. Respondent I(ansas City Quilting Co. , Inc. , is a corporation virtue of theorganized, existing and doing business under and by laws of the State of ~fissouri with its office and principal place of business located at 2441 Charlotte Street, Kansas City, :Missouri. Respondents Lionel J. I(unst and Solomon Burstein are officers of said corporation and their address is the same as that of said corporation.

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

ORDER tis o-rdered That respondents Kansas City Q,uilting Co., Inc., a. corporation, and its officers, and Lionel J. E:unst and Solomon Burstein, individually and as officers of said corporation, and respondents representatives, agents and employees, directly or through any corporate or other device, in connection w~th the introduction, or manufacture for introduction, into commerce, or the offering for sale, sale intransportation, distribution, delivery for shipment or shipment, CO1nmerce, of wool products, as "commerce" and ""\Tool product" are defined in the V\T 001 Products Labeling Act of 1939 , (1:0 forthwith cease and desist from misbranding such products by: 1. Falsely and deceptively stamping, tagging, labeling, or otherwise identifying such products as to the character or amount of the eonstituent fibers contained therein.

2. Failing to see-urely affix or place on, each such product a stamp, tag, label, or other means of identifieation showing in a clear and conspieuous ma.nner each element of information required to be disclosed by Section 4(R) (2) of the "'\Vool Products Labeling Act of 1930.

It is f1.lrth.e'r ordered That respondents I(ansa,s City Quilting Co. Inc. , a e-orporation, and its offcers, and Lionel J. Kunst and Solomon Burstein, individually and as officers of said corporation, and respondents' representa.tives, agents and e,mployees, directly or through any corporate or other device, in connection "ith the introduction, delivery for introduction, manufacture for introduction, sale, advertising, or offering for sale, in commerce, or the transportation or causing to be transported in commerce, or the importation into the United States 512 FEDERAL TRADE CO1\lMISSIO~ DECISIONS Final Order 78 F.

or any textile fiber pl:)clnct: (;1' in connection "\"itll the salt? otl'eril12" lor sale advertising, cleli\- e1'Y. transpol'tntion, 01' causing: to be tlon~, ported, of any textile fiber product "\,,!iich has bPl'll (1chertised 01' ot1i.'lcd ror sale in commerce: or ill C'01l1lection \"ith thl' sale. otIering r6r ~ale. to he transportedachertising, cleliYer~', transportation. 01' causing nftcr shipment in COlJlJlH.'l'('l' , or any textile fiber product. "\whether in it~ original state 01' conbined in other tt'xtilr fiber nrorhlcts, as the terms ;;commerce " and . textile fiber product" ate defined in the Textile Fiber Products Identification AcLdo forthwith cea:::e and desi~t rrom failing to maintain and presery€proper record::: shmying the h~- said rc-fiber content or the textile fiber products manufactured spondents. as required by Section () or the Textile Fiher Product~ Identification Act and Rule :10 or the Heglllntions promnlga.ted thereunder.

Iti:s fudhe~ ' onle;' ed. That the respondent corporation :shall f01111with cl15h,jbllte a C'opy of this olc1er to each of its operating c1i\-islons. "\"i1"hill It is fnJ'their' o/'dei'ul. That the respondents herein shall file- "\with the sixty (Gn) clays after sen- ice upon them of this order~ Commission a report in "\"writing setting forth in detail the manner and form in which they have complied "ith this order. Ix THE ~L\TTEn OF ~IOTOROL.\~ IXC.

oHlmn, ETc., IX RE(;c\RD TO THE .\LLl.:m~D nnl\T10X OF THE FEDEH.\L TIL\DE n~\L'(l~,qOX ACT nO('7.'ct S. J. (' oil/plaint. JJoJ', .:23. J.!/();Z-n('ci. ~i()I/. JIuJ'. j!Jr;8 Ord~r dismis:-:ing dwrge:-: for failure of l1rnof again~t a :F'ranklin Park. Ill distributor of radio and television sets that it had misrepresented or failed to (~iselnsp tile llh111tn' of nril,!in of certain \:omvnnent IJflrts nf its products. , 64 Other charges against respondent were dislwsed of in n11 p.nrlier order C. 62. dated .January 14 , 196-:1.

FINAL OrWEll ox Issl~1':S PRESEXTED BY 1'11E COF~\Tny ()F O!n(;IX CHARGES OF THE CO::\IPLAINT This matter has been pendings before tl1C' Commission on respondenfs appeal from fulclings and con('lllsion~ nnmberec1 1:1 and LL and of the oreler to cease and cl(J~ist paragraphs nnmbered 1 (k), :1 and s initi;d decision. These particnl:1l' set forth in the hearing examiner lln(lings, rnnel118iolls aJlc1l'f1J';1~:.T:~ph:;; ('f t1w ol'(1el' 1'21nte to Paragraphs FONDA MAXUF ACTURIXG CORP. ET AL. 513 r,1~ Complaint Fiye E and Six E and Paragraphs Seven, Eight and :Kine of the complaint ,,-which charge respondent \with misrepresenting the country of origin of the component parts of certa.in of its ra.dios and with railing to disclose the country of origin of Bueh ilnported components in violation of Section 5 of the Federal Trade Commission Act. Decision "\with respect to the. issues presented in these paragraphs of the complaint \"as resen-ed by the Commission in its final order issued Janua.ry 1J, IDG4 (64 F. C. G:2J, in disposition of the other issues raised by respondent s appeal and the appeal of counsel supporting the. complaint.

The Commission having determined that the aforesaid foreign origin charges in the complaint should be dismissed for failure of proof and that, respondent's appeal from the hearing examiner s findings conclusions and order dealing "\','ith these' clwrges shollld be granted: It is o/'de/'td That the. initial decision as l11odifi€cl bythe Commission s order of .January 1J , 1DG-! LCH F. C. G:2J, be, ancl it hereby is fnrt her modified by striking: findings and conclusions mul1bered 13 ancl14.

It i8 further ordererl That pamgraphs 1 (k), ;.1 and 4: of the hearing examiner s order to cease and desist 1)(', and they hereby are, vacated :lnd set aside.

It 'l.S flll,ther .0 ,'deJ'ed. That Paragraphs Fiye E and Six E and Parap:raphs Sev€n, Eight and Nine of the compln.int be, and the~- hereby are lismi ssed.

Commissioner ~raeIntyre not concul'1'ing, and Commissioners . ones final Xicholson not participating for the reason that ol'nl nrg:nment "\yas heard prior to their appointment to the Commission. Ix THE 1\1.-\ TTER OY FOXDA )IAN1-FA.CTrRIXG CORPORATION ET AI..

C1XSEXT OHD1'. , ETc.. IX HEG.\RD TO THE M,LE(~ED nnLYrlOX OF TJn~ FEDER.\L TRADE C())DIISSIOX ..-\XD THE FL.DDL\BLE L\HIUCS .\("1'8 TJIW7."Cf' (,- 131;j, Colilliluint, A.pdT If/1)S-D('ei,~ioll. .ljiril 1. HlfiS Consent (!l"fler requiring il Xe\\" Y()rl~ Cit~- importer nncl IH' OCE'SSOl' of fabrics to C'E'I1Se i1l1pol'tingor selling nny c1ang't'l'ously ftammn hie fabric, CO::\IPLAIXT Pursuant to the. provisions of the Federal Trade Commission Act :md the Flammable Fabrics Act, and by yirtlle of the authority vested , ,, Decision and Order 73 F. T.

in it by said Acts, the Federal Trade Commission, having reason to believe that Fonda ~lanufacturing Corporation, a corporation, and Henry ~f. Rem and John P. ~falik, individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts, and the Rules and Regulations promulgated under the Flammable Fabrics Act and it appearing to the Commission that a proceeding by it in respect thereof "ould be in the public interest, hereby issues its complaint, stating its charges in that respect as follo"s PARAGRAPH 1. Respondent Fonda :Manufacturing Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York. Respondents Henry ~f. Rem and John P. ~la.lik are officers of said corporate respondent. They formulate, direct and control the acts, practices and policies of said corporation.

The respondents are engaged in the mall facture, sale and distribution of fabrics, with manufa,cturing facilities located at 1 Cayadutta. Street Fonda, New York, and "ith their office and principal place of business located at 411 FifthA venue, New York, New York. PAR. 2. Respondents, now and for some time last past, have sold and offered for sale, in comme-rce; have imported into the United States; and have introduced, delivered for introduction, transported and eallsed to be transported, in commerce; and have transported and caused to be transported for the purpose of sale or delivery a.!ter sale in commerce; as ';commerce". is defined in the Flammable Fabrics Act, fabric, as that term is defined therein, "which fabric was, under Section 4 ,of the Flmmnable Fabrics Act, as amended, so highly flammable as to be dangerous when \':orn by individuals. PAR. 3. The aforesaid acts and practices of respondents ,\\e1'e and are in violation of the Flammable Fabrics A.et and the Rules and. Regulations promulgated thereunder, and as such constitute unfair methods of competition and unfair and c1eceptiye, acts and practices ill commerce, "it-hin the intent and meaning of the Federal Trade Commission Act.

DECISION AXD 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 there::titer with . a copy of a draft of complaint ,,'which the Bureau of Textiles and Furs proposed to present to the Commission for its consideration and "which if issued by the Commission ould charge. respondents with violation FONDA MANUFACTURL'\G , CORP. ET AL. 515 513 Order of the Federal Trade Commission Act and the Flammable Fabrics Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all 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 respondents that the law has been violated as alleged in such eomplaint, and waivers and other provisions as required by the Commisssion s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents ha.ve violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in S 2.34 (b) of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. R,esponde,nt Fonda ~Ianufacturing Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with manufacturing facilities located flt 1 Cayadutta Street, Fonda, N e,,- York, and with its office and principal place of business located at 411 Fifth Avenue, New York N e\f York.

Respondents I-Ienry :M. Rem and .J o11n P. ~Ialik :1re officers of said corporation and their address is the same its that of said coll)oration. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the. responclents and the proc.eeding is in the public. interest.

ORDER t is ol'(rej' That respondents Fonda ~Ianufactl1ring Corporation a corporation, and its officers, and I-Ienry ~I. Rel11 and .J ohn P. ~lalik individually and as officers of said corporation and respondents' representatives, agents and employees, directly or through any corporate or other devic.e, do fortIn'with cease and desist from: (a) Importing into the United States; or (b) Selling, offering for sale, introc1uc.ing, delivering for introduction, transporting, or causing to be transported, in eommerce, as "commerce" is defined in the Flammable Fabrics Act; or (e) Transporting or causing to be transported, for the purpose of sale or delivery after sale in commerce ..: , Complaint 73 F.

any fabrie which, under the pl'm-isions of Section:!: of the Flammable Fabrics Act. as amended. is so hiQ'hlv flammable as to be dang' erous when worn by individuals.

It is flldhe-r onlel' That the respondents herein shall, \within sixty (00) 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 eomplied with this order. Ix 'rue ~r.\ITER OF ALVJIINUNI EXTERIOH DESIGXERS, INC., ET AL. COXSEXT ORDER , ETC.. IN REG.\HD TO THE .ALLEGED \'JOLATIO~ OF THE FEDERAL n:,\DE CO)DIISSIOX ACT ))rlc!.'rt ('- w. ('0111 p7aiilt, April 2, l!168-D('c:ision/, JjJI"il .2 was Con~ent order requiring an E'"ansyil1~' , Ind., distributor of home impronment products to cease misrelJresenting that purchaser:-; of its aluminum siding ",ill receive reduced pricps or bonuses for nse of their homes as models, that its products are unconditionally guaranteed. that it is affiliated with Kaiser \lUlllinnm Company, and Ile~gle(:tlng to (llsd(l~e tlw total cost and all details uf its installation contracts prior to ~lgning by the ellstolller. ('())IPL.\lst Pursuant to the pro\-isions of the Federa I Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to belie"\'e that Aluminum Exterior Designers, 1ne., a corporation. and I\enneth ,y. Ste'.-ens individually and as an officer of said corporation, h~reinafter referred to as respondents, have violate,d the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof "\yould be in the public interest, hereby issues its complaint, stating its charges in that respect as follo"\vs P.:\K\GRAPH 1. Respondent A 111m in1l11l Exterior Designer,;;. 1nc.. is a corporation organized existing and doing business under and by virtue of the la"\yS of the State of Indiana, with its principal oflic(' and place of business located at 127:!: l\Iax"\yell Avenue, in the city of Evansville State of Indiana. The business operated by corporate respondent "" formerly operated by Aluminum Exterior Designers~ a partllershi p, composed of Frank II. Stevens and Aline Ste\-ens and corporate rcspondent is successor in interest thereto.

, , ( ALUML\' U~1 EXTERIOR DESIGNERS. INC... ET AL. D I 516 Complaint Respondent Kenneth 'Y. Stp\"ens is an officer of said corporation and formerl~y \Yrts manager of Sit ill partnership. He formulates, directs and control:; the acts alh.l practices of the corporate respondent. and Jormerly forllllllatecl~ directed and control1ecl the acts and practices of said partnership. His addre~~ is the same as that of the saidcorporate respondent. PAn. :2. Hespomlents lwH' lwe'll engaged in the offering fol' sale sale distrilmtion and installn,tion of aluminum sieling and other home improvement products to the public.

P.,\R. i3. In the COlll'Se ancl conduct of their business, respondents have caused their said products, "\yhen sold, to be shipped from their place of Lmsiness in the State of Indiana to pm:elwsers thereof located in various other States of the "Gnited States, and have maintained a, substantial course of trade in said products in commerce, as ;'commeree" is defined in the Federal Trade Cormnission .-:-\..et. The acts and practices hereinafter described, referred to and alle.ged to hnye been participated in by the corporate respondent relate to nets performed and praetic('s (~np:aged in by saiel ..:\.luminum Exterior Designers 11 pall1lership; and legal responsibility therefor accordingly is shared by and imputed to corporate respondent (1) by reason of its being the. successor in interest to, and succeeding to the operation of the business conducted by, that partnership and (:2) by reason of the fact that both concerns "\yen' under the same nmnagell1ent and operating control.

\R, 4. In the CO1nse' and conduct of their aforesaid business, and for the purpose of inducing the purchase of their products, respondents and their salesmen or representatives ha"\'e represented, directly:- 01' by implication, in advertising and promotional material and in oral solicitations to prospective purchasers, that: 1. Purchasers, "\,,110 allow aluminum siding and other home imprm' ment products installed by respondents on their homes to be used as models and for demonstration purposes ill be charged special or reduced prices based on respondents' regular selling prices and . sayings "\will thereby be gl'1'mtecl such purclwsers in reductions from such selling prices.

:2. Purchasers "\yillreceiye a commission or bonus from respondents for each sale. of respondents' insta.lled almninum siding or other home improvement products made as a result of displaying their homes andre.ferring other purchasers to respondents. 3. All purchasers of respondents' installed siding materials will realize a 25 percent or greater reduction in heating costs. Complaint 73 F.

4. Respondents are connected or affiliated "ith J\:aiser Aluminum Company.

5. Respondents' home improvement products are unconditionally guaranteed or are guaranteed for a lifetime. PAR. 5. In truth and in fact:

1. Respondents in fe-\\", if any instances, have used the homes or purehasers as model homes for advertising purposes. Respondents aluminum siding and other home improvement procluets have not been sold to purchasers at special or reduced prices based on respondents' regular selling prices and savings have not been granted purchasers because of a reduction from responde,nts' regular selling prices. In fact, respondents have not had a, regular selling price but the price at which respondents' products have been sold has varied from eustomer to customer depending on the resistance of the prospective purchaser.

2. ,With the exception of rare instances, purchasers have not been paid a commission or bonus by responde,nts for a sale of respondents installed aluminum siding or other home improvement products made as a result of displaying their homes and referring other purehasers to respondents.

3. All purchasers of respondents' installed sieling materials have not realized a 25 percent or greater reduction in heating costs. Savings in heat loss resulting from installed siding materials vary 'Tidely depending on the nature and condition of the st.ructure to which they are applied.

4. Respondents are not nor have they been connected or affiliated with Kaiser Aluminum Company.

5. Respondents' installed home improvement products have not been unconditionally guaranteed or guaranteed for a lifetime. Such guarantee as may have been provided by respondents to purehasers has been subject to numerous terms, conditions and limitations and the lifetime for which the guarantee extends has not been therein specified. Therefore" the statements and representations as set forth in Paragraph Four hereof were false, misleading and deceptive. ip AR. . In the course and conduct of their business, as aforesaid, and in furt.heranee of their deceptive sales program, respondent.s and their salesmen or representatives have engaged in the follo"\\"ing acts and pradiees :

1. They have induced or otherwise caused purchasers to sign eompletion slips before all contracted details of their home installation procedures were consummated, thereby relieving respondents of their ,contractual obligations and requirements.

ALUMINUM EXTERIOR DESIGNERS, INC., ET AL. 519 516 Complaint 2. They have induced or otherwise caused purchasers to sign monthly payment contracts which misrepresented the total cost of respondents' home improvement products.

3. They ha,ve failed to disclose or refused to disclose the total cost of their installed home improvement products and that a purchaser is assessed interest charges in satisfaction thereof, during the negotiation and at the consummation of their monthly .Lnavment contracts. some instances, the purchaser learned the total amount of his indebtedness and assessed interest amounts for the first time when contacted by the finance company or bank to 'Thich respondents had negotiated or otherwise assigned his contract.

Therefore, the acts and the practices as set forth in Paragraph Six hereof, were false, misleading and deceptive. PAR. 7. In the course and conduct of their business, as aforesaid respondents or their salesmen in a substantial number of cases hate failed to disclose orally at the time of sale and in writing on any conditional sales contract, promissory note or other. instrument executed by the purchaser, with such conspicuousness and cla,rity as is likely to be read and obsen-ed by the purchaser, that such conditional sales contract, promissory note or other instrument may, at the option the seller and 'Tithout notice to the purchaser, be negotiated or assigned to a finance company or other third party and that if such negotiation or assignment is effected, the purchaser 'Till then owe the amount due under the contract to the finance company or third party and may have to pay this amount in full whet.her or not he has claims aga,inst the seller under the contract for defects in the merchandise, nondelivery or the like.

The aforesaid failure of the respondents or their representatives to capa.city toreveal said facts to purchasers has had the tendency and lead and induce a substantial number of such persons into the understanding and belief that the respondents 'Till not negotiate or transfer such documents, as aforesaid, and that legal obligations and relationships will exist only between such respondents and purchasers and will remain unchanged and unaltered, and has had the tendency and capacity to induce a substa.ntial number of such persons to enter into contracts or execute promissory notes for the purchase of respondents products of "\\hieh fads the Commission takes official notice. a substantial In truth and in fact, respondents frequently and in number of cases and in the usual course of their business have sold, transferred and assigned said notes and contracts to finance compa.nies or third parties so as to bring about the a.iorementioned changes in legal obligations and relationships.

;) :;: 520 FEDERAL TRADE CO:3DlISSIO~ DECISIONS Decision and Order 73 1!' Therefore the failure of respondents 01' their repre:::entatin' to 1'e.year such facts to prospecti"\"e nurchase.rs, as aforesaid1 ~ h~lS been an unfair and false, misleading and deeeptiye act and practice. PAR. 8. In the, conduct of their business respondents ha,-e been in substantial competition, in commerce, with corporcltioJl8. firms and individuals in the sale of aluminum sieling and other home improvement products of the same general kind and nature as that ~old by respondents.

PAR. 9. The use by respondents of the aforesaid false~ 1i1i~leading and deceptive statements, repre~entations !U1c1 practices llc1s had the capacity and tendency to mislead memb2l's of the purchasing public into the erroneous and mistaken belief that t11e said statements and of substantial quan-representations "\were true and into the purchase tities of respondents ' products by reason of such erroneous and mistaken belief.

PAR. 10. The aforesaid acts and practices of respondents, as herein of the public andalleged, have been all to the prejudice nnd injury of com-respondents ' competitors and have constituted unfair methods petition in commerce and unfair and dece.ptiye acts and pn\('tices in of the Feclera 1 TnHle Commi:.::-commerce., in violation of Section sian ~-\ct.

DECISIOX :\XD OnDEl~ The Commission having heretofore determined to issue its complaint. charging the respondents named in the caption hereof "\with yiolation of the Federal Trade Commission ..:~ct, and the respondents of said determination and "\with a copyhaying been served "\Tith notice to issue'~ together "\with a of the complaint the Commission intended proposed form of order; and The respondents and counsel for the Commission hnyillp: thereafter executed an agreement containing a consent order~ an admission by the. respondents of all the jurisdictjonal facts set forth jn the comof said agreement plaint to issue herein, fl statement that the. signing Helm ission js for sett 1eme11t purposes only and does not. constitute an by respondents that the law has been violated as alleged ill such complaint, and waivers and others provisions as required b~' the Commission ~s Rules; and The Commission lull-ing considered the agreement and having accepted same, and the agreement containing consent order having thereupon been placed on the public. record for a period of 30 days, no"" in (b) of it, further conformity "\with the procedure prescribed in 8 :2.3-4: ('011- Rules, the Commission hereby issues its complaint in the form AL"C)'IL\TM EXTERIOR DESIGNERS. INC.. ET AL. 521 516 Decision and Order templated by said agreement, makes the follo"\ving jurisdictional ilnllings, and enters the IollO"\ving order: 1. Respondent )duminum Exterior Designers, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Indiana, ,with its principal office and place of business located at 127 4 ~Iaxwell ~~ venue, in the city of Evansville, State of Indiana. The business operated by corporate respondent ,,-as formerly operated by Aluminum Exterior Designers, a partnership, composed of Frank H. Stevens and AJine Stevens and corporate respondent is successor in interest thereto.

Respondent Kenneth ,Yo Stevens is an officer of said corporate.ion and formerly "\"as manager of said partnership and his address is the sanw as that of said corporation.

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

ORDER It ;8 ordei' That respondents Aluminum Exterior Designers, IIll'. a corporation, and its officers, and Kenneth ,V. Stevens, individually and as an officer of said corporation, and respondents' representatives agents and employees, directly or through any corporate 'Or other device~ in cOlmeetion w.ith the otferin!2: for sale. sale. distribution or installation of nluminl11l1 sieling or other products, in commerce, as ;;COlllmerce" is defined in the Federal Trade Commission Act. do fortll"\with cease and desist from:

1. Representing, directly or by implication, that: (a) The home. of any of respondents' purchasers "\will be used as a. model home or othenyise for advertising purposes. (b) ~\.Ily price of responclents ' 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. Purchasers win receive commissions, bonuses or otlwl' (d compeJl~atioJl, unless respondents provide an opportunity program whereby purchasers can qualify for such commissions, bonuses or other compensation, and provide such commissions, bonuses or other compensation in every instance, to those qualifying therefor; Oly misrepresenting, in any mc111ner, commissions, bonuses or any other compensation to be received by respondents purchasers.

-nS-:::45--72-- 522 FEDERAL TRADE CO11MISSION DECISIONS Decision and Order 73 F. T, (d) Any percentage or amount of savings or reduction in heat costs or loss will result. from the use of respondents: products: Pio' v-ided, hO1Ve'Ve?' Thn.t it shall be a defense in any enforcement proceeding instituted hereunder for respondents to establish that each purchaser will in fact realize a savings or reduction in the costs or loss in the amount or percentage rep resen ted.

( e) Respondents are connected or affiliated with Kaiser Aluminum Company: P'i' ovided, however That nothing herein shall be construed to prohibit the respondents from truthfully and none1deceptively representing that respondents are dealers in products of ICaiser Aluminum Company; or misrepresenting, in any manner, respondents' business connections or affiliations.

(f) Any of respondents' products are guaranteed unless the nature and extent of the guarantee, the identity of the guarantor and the manner in "\T which the guarantor ",ill perform thereunder are clearly, emphatically and conspicuously disclosed to the purchaser in immediate conjunction with such guarantee representation.

2. Using the ,yard ';lifetime" or any other expression of the same import or meaning in referring to the duration of a guarantee of a product "without clearly, emphaticall3T and conspicuously disclosing the life to which such reference is made in immediate conjunction with suc.h gua.rantee repre.sentation. 3. ~fisrepresenting, in any manner, prices, guarantees or any savings available to purchasers of respondents' products. 4. Inducing or otherwise causing purchasers of respondents products to Sig11 or otherwise execute completion slips or any similar document or documents before consummation of any and all eontractecl details of a particular installation. 5. Inducing or otherwise eansing purchasers or prospecti ve purchasers of respondents' products to sign monthly payment contracts or any other contractual instruments which do not clearly and conspicuously state the total cost of respondents' products. 6. Failing to disclose or refusing to disclose to purchasers or prospective purchasers in written contracts, promissory notes or otherwise the exact amounts of the total cost of respondents' products and of all interest payments, carrying charges and other charges at the time the sale of such products is eonsummate. 7. Failing to orally disclose prior to the time of sale, and in writing on any conditional sales contract, promissory note or other SURREY SLEEP PRODUCTS , INC. , ET AL. 523 516 Syllabus instrument of indebtedness executed bya purchaser, and with such eonspicuousness and clarity as is likely to be observed and read by such purchaser, that:

Any such instrument, at respondents' option and without notice to the purchaser, may be discounted, negotiated or assigned to a finance company or other third party to which the purchaser will thereafter be indebted and against which the purchaser s claims or defenses may not be available. 8. Failing to clearly and fully reveal, disclose and inform customers of all ,terms and conditions of a sale and 'Of any installment contract or prOlnissory note or other instrument to be signed by anyeustomer.

9. Failing to deliver a copy of this order to cease and desist to all present and future salesmen 'Or other persons engaged in the sale of respondents' products or services, and failing to secure from each such salesman or other person a signed statement acknowledging receipt of said order.

It is further ordered That after the acceptance of the initial report of compliance, respondents shall submit a report to the CoillJnission once every year during the next three years describing all complaints respecting unauthorized representations, all complaints received from customers respecting representations by salesmen which are elaimecl to ,have been deceptive, the facts uncovered by respondents in their investigation thereof and the action taken by respondents with respect to each such complaint.

t is further ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commissiona report in writing setting forth in detail the manner and form in which they have complied with this order.