Gimbel's Upholstering Co., Inc.

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

IN Tile. :ill\.TTER GI1\IBEL' S lTPI-IOLSTERING CO. INC., ET .AL. CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE I~EDE1L\L TRADE CO::\DIISSION ACT Docket ('-1330. Complaint May 1965-Decision, May, 1968 Consent order re(1l.1iring a 'Washington, D.C., upholstering and refinishing firm to cease c1pcepth'ely guaranteeing its services and failing to disclose that its conditional sales cuntraets may be assigned to a finance company. CO:\IPLAINT 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 Gimbel's Upholstering Co., Inc., a corporation, and ,Yilliam Lessey and Thelma LesEey, individually and as officers of said corporation, hereinafter referred to fts respondents, hflxe. .,"ioInteel the prol"isions of said Act, and it appearing to the Commission that fI proceeding by it. in respect thereof '"'Iould be in the public. interest, hereby issues its complaint stating its charges in that respect as follo,,' PARAGRAPH 1. Respondent Gimbel's lTpholstel'ing Co. , Inc. , is a corporatioll organized, existing and doing business under and by virtue of the la,\\s of the District of Columbia, with its principal office and phee of business located at 1534 7th Street, N\V., ,Vashington, D. Respondents ,Villialll Lessey and Thelma Lessey are individuals and are officers of the corpoi'ate respondent. That formulate, direct and control the acts and practices of the c.corporate. respondent, including the acts and practic.es hereinafter set forth. Their business addre. is the same as that of the corporate respondent. PAR. 2. Respondents are noIY, and for some time last past have been eno' ao' ed in the a(heart.ising.' ~ onel'iw.r for sale, sale and distribution of L..slip covers, draperies and furniture. upholstering and refinishing services to the pH bee.

812 FEDERAL TRADE COMJ\JISSION DECISIONS ,Complaint 73 F.

PAR. 3. In the course and conduct of their business as aforesaid, 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 District of Columbia to purchasers thereof located in the States of l\laryland and Virginia and in the District of ColUlllbia, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products and services in comnlerce, as "commerce" is defined in the Federal Trade Commission Act. PAR. 4. In the course and conduct of their aforesaid business, and for the purpose of inducing the purchase of their products and services the respondents have made, and are now making, numerous statements and representations in advertisements inserteel in newspapers of substantial interstate circulation with respect to the guarantee of said products and services.

Typical and illustrative of said statements and representations, but. not all inclusive thereof, are the following: Satisfaction guaranteed.

AU work fully guaranteed.

Written guarantees on all workmanship.

PAR. 5. By and through the use of the above-quoted statelllents and representations, and others of similar import and meaning but not expressly set out herein, separately and in connection with the oral statements and representations of their salesmen and representatives the respondents have represented, and are now representing, directly or by implication, that their products and services are unconditionany guaranteed.

PAR. 6. In truth and in fact, respondents' products or services ate not unconditionally guaranteed. Such guarantee as they give is subject to conditions and limitations not disclosed in respondents' advertising or otherwise made known to the customer prior to sale. Therefore, the statements and representations as set forth in Para. lllisleac1ing flndgraphs Four and Five hereof were and are false, deceptive.

PAn. 7. In the course and conduct of their business as aforesaid. respondents have failed to disclose to purchasers that, at respondents option and without notice to the purchaser, any conditional sales contract, promissory :note, or other instrument of indebtedness executed by such pure-hasel's in connection with their credit purchase agreennmbe.r or instane-es has been, dis-ments may be, and in a substantial GIMBEL' S UPHOLSTERING CO. , INC. , ET AL. 813 811 Decision and Order counted, negotiated or assigned to a finance company or other third party to whom the purchaser is thereby indebted. Therefore respondents' failure to disclose such Inaterial fact, as foresaic1, \,as and is false, misleading and deceptive, and constituted ::md now constitutes, an unfair or deceptive act or practice. P .:\.n. 8. In the course and conduct of their aforesaid business, and at all times mentioned herein, respondents have been, and now are, in substantial competition, in commerce, with corporations, firms and individuals in the sale and distribution of slip covers, draperies and furniture upholstering and refinishing services of the same general kind and nature as those sold by respondents. PAR. 9. 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 and se.rviees by reason of said erroneous and mistaken belief.

P .AR. 10. The aforesaid acts and practices of respondents, as herein alleged, were and are aU to the prejudice and injury of the public. and of respondents' competitors and constituted, and now constitute, unf,1ir methods or competition in commerce and unfair and deceptive acts and practices in commerce in violation of Sedion 5 or 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 Pradices 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 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 complaint, and waivers and other provisions as required by the Commission s Rules; and Decision and Order 73 F.

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, 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 ~ 2.34(b) of its Rules, the Commission hereby issues its complaint, makes the follo\ying jurisdictional findings, and enters the following order:

1. Respondent Gimbel's Upholstering Co., Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the District of Columbia, with its office and principal place of business located at 1534 7th Street, N,Y., in the city of ,Yashington, District of Columbia.

Respondents ,Villiam Lessey and Thelma Lessey are officers of said corporation and their 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 I t -is ol'dei'ed That respondents Gimbefs Upholstering Co., Inc., a corporation, and its officers, and ,Villiam Lessey and Thelma Lessey individually and as officers of said corporation, and respondents agents, representatives and employees, directly or through any CO1'pol' a te or other device, in connection with the advertising, offering for sale, sale or distribution of slip covers, draperies, upholstering or re,finishing services, or any other products or services, in commerce, as commerce" is defuled in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or by implication, that any merchandise or service is guaranteed, unless the nature and extent of the guarantee, the identity of the guarantor and the manner in which the guarantor \will perform thereunder are clearly and conspieuously disclosed.

2. ?\Iaking any direct. or implied representations that any of respondents' products are guaranteed unless in each instance a "\"\Titten guarantee is given to the purchaser containing provisions substantially the same as those contained in such representations. 3. Failing to orally disclose prior to the time of sale, and in \\writing on any conditional sales contract, promissory note or other instrument of indebtedness executed by a purchaser, and NATIONAL WORK-CLOTHES RENTAL ET AL. 815 811 Complaint with such conspicuousness 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 purchase.r s claims or defenses may not be available.

4. 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 acknow ledging receipt of said order.

It is frnrthe7' ordered That the respondent corporation shall forthwith distribute a copy of this order to eac.h of its operating divisions. It is fw,their' ordered That the respondents herein shall, ,within sixty (60) days after service upon them of this order, file with the Comlnission a report in \writing setting forth in detail the manner and form in which they have complied with this order.