Continental Collection Bureau of America, Inc

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IN THE :IATTER OF CO!\TINENTAL COLLECTION BUREAU OF AMERICA INC., ET AL.

CONSE~T ORDER, ETC., IN REGARD TO ALLEGED VIOLATIOI\ OF THE FEDERAL TRADE COMMISSION ACT Docket C-2808. Complaint, Maj". 1.97fi-Decision, Mar. 1.970 Consent order requiring an Atlanta, Ga., debt collection agency, among other things to cease misrepresenting the nature, import, or urgency of communications used in the collection of delinquent debts; misrepresenting the initiation of legal action for nonpayment of alleged debts or the effect of nonpayment on credit status of the alleged debtor; and furnishing means and instrumentalities of misrepresentation or deception. Further, the order requires respondent to disclose in correspondence to alleged debtors that respondents do not accept payments nor ordinarily file suits.

Appearances For the Commission: Roger J. Fitzpatrick. For the respondents: Pro se.

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 Continental Collection Bureau of America, Inc., a corporation, and Wiliam M. Weinberg, Peter J. Vann, and Lavail Clements, individually and as officers of said corporation, hereinafter sometimes referred to as respondents, have violated the provisions o 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 Continental Collection Bureau of America, Inc. is a corporation organized, existing and doing business under and by virtue of laws of the State of Alabama, with its principal office and place of business located at 3384 Peachtree Rd. , N. Atlanta, Georgia.

Respondents Wiliam M. Weinberg, Peter J. Vann and Lavail Clements are individuals and are officers of the corporate respondent. They formulate, direct and control the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent. PAR. 2. Respondents are now, and for some time in the past have 55R FEDERAL TRADE COMMISSION DECISIONS Complaint 87 F.

been, engaged in the advertising, offering for sale and sale of a service to assist in the collection of alleged delinquent debts. This service consists of the preparation by the respondents of a series of form notices and letters to be mailed to alleged delinquent debtors at regular intervals. Two styles of forms are used in this series: (I) that which is titled SPEED- GRAM and (2) that which bears the letterhead of Continental Collection Bureau.

PAR. 3. In the course and conduct of their business, respondents are now, and for some time in the past have been engaged in sending to and receiving from persons, firms and corporations located in various States of the United States, by means of the United States mail letters, notices, forms and other material for use in the collection of alleged delinquent debts. Respondents maintain, and at all times mentioned herein have maintained a substantial course of trade in said business in or affecting 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 payment of alleged delinquent debts, the respondents mail, or cause to be mailed to alleged delinquent debtors various printed forms and other printed material. Typical and ilustrative but not necessarily all inclusive of said forms and material are the following:

1. A yellow window envelope on which a return address is printed with no name. The word SPEED- GRAM is printed in large black type over the window.

2. A yellow, printed form styled SPEED- GRAM, designed to be inserted in the envelope described in subparagraph 1 of this Paragraph. PAR. 5. By and through the use of the envelopes and forms described in subparagraphs 1 and 2 of Paragraph Four, respondents have represented, and are now representing, directly or by implication, that the communication is a telegraphic message. PAR. 6. In truth and in fact the communication is not a telegraphic message. Rather, it is a printed form letter, mailed to alleged delinquent debtors, which form by its color and appearance, styling, printing and format simulates a telegraphic message and which, by virtue of said simulation, misleads the recipient as to its nature, import purpose and urgency.

Therefore, the use by respondents of said envelopes and forms as set forth in Paragraph Four was and is false, misleading and deceptive. PAR. 7. In the course and conduct of their business, and for the purpose of inducing the payment of alleged delinquent debts, respondents mail, or cause to be mailed to alleged delinquent debtors various .

CONTINENTAL COLLECTION BUREAU OF AMERICA, INC., ET AL. 559 557 Complaint printed forms, letters and other printed material containing certain statements and representations.

Among and typical, but not all inclusive, of such statements and representations are the following:

CONTINENTAL COLLECTION BCREAU (letterhead) CONTINENTAL COLLECTION BUREAU OF AMERICA NATIONWIDE COLLECTION BUREAU COLLECTION DEPARTMENT THIS IS A COURTESY NOTICE TO INFORM YOU THAT YOUR DELINQUENT ACCOUNT HAS BEEN REFERRED TO THIS AGENCY FOR COLLECTION. YOUR CREDITOR REQUESTS THAT YOU BE ALLOWED TEN DAYS TO SETTLE THIS ACCOUNT BEFORE WE INSTITUTE COLLECTION PROCE- DURES.

THEREFORE, THIS CLAIM REQUIRES YOCR IMMEDIATE ATTENTION. IT IS THE INTENT OF THIS AGENCY TO EXHAUST EVERY LEGAL MEANS TO COLLECT FOR OCR CLIENT. TO AVOID SUCH ADDITIONAL COSTS AND POSSIBLE IMPAIRMENT TO YOUR CREDIT RATING. IT IS IMPORTANT THAT YOU MAKE PAYMENTnnlEDIATELY* . ' YOUR TEN DAY COURTESY PERIOD HAS EXPIRED. IF THIS CLAIM IS NOT TAKEN CARE OF IMMEDIATELY, IT WILL NECESSITATE OUR RECOM- MENDATION THAT LEGAL PROCEDURES BE INSTITUTED AS SOON AS POSSIBLE.

OBLIGATIONS WARRANTIKG LITIGATION EXPENSES SUCH AS LEGAL FEES AND COURT COSTS MAY BE QUITE EXPENSIVE AND THESE CHARGES MAYBE CHARGEABLE TO THE DEBTOR. SO PAY THIS CLAIM IMMEDIATEL Y TO A VOID ANY FURTHER EXPf,USES' . * , 'WE ARE , THEREFORE . RECOM lending THAT OUR CLIENT FILE SUIT TO Rf,COVER THE FCLL AMOCNT OF HIS CLAIM IF OBLIGATION W ARRANTS THIS ACTION.

IF THERE IS NO VALID DEFENSE, JUDGEMENT MA Y BE RENDERED AND 560 FEDERAL TRADE COMMISSIO:\ DECISIONS Complaint 87 F.

THE CLAIM SATISFIED BY SEIZURE OF ASSETS WHICH SELL AT PCBLIC AUCTIO:\ TO THE HIGHEST BIDDER" , ' WE WISH TO GIVE YOU '-NOTICE THAT PAYMENT OF THIS CLAIM MUST BE RECEIVED BY OUR CLIENT AT ONCE. FURTHER LEGAL PROCEDCRES BY THE ABOVE CLIENT FOLLOWING JUDGMENT MAY REQUIRE THE PRODUCI:\G OF ALL FIIoA:\CIAL RECORDS IN COURT FOR EXAMINATION. A WRIT OF EXECCTION 0:\ ANY J!:DGEMENT OBTAINED MAY BE ISS!:ED AND BE SATISFIED BY A LEVY ON PROPERTY. REAL ESTATE CHATTELS. GOODS, ACCOUNTS RECEIVABLE AND GARNISHMENT OF BANK ACCO!:NTS' , ' , , 'IF YOl: WISH IN ANY WAY TO PROTECT THE LITTLE AMOUNT OF CREDIT THAT YOU MAY HAVE. IT IS IMPERATIVE THAT YOl: TAKE CARE OF THIS OBLIGATION AT OIoCE.

IF THIS OBLIGATION IS :\OT MET WITHIN THE :\EXT 72 HOURS. OUR OFFICE IS GOING TO RECOMMEND TO OUR CLIE:\T THAT HE DEEPLY CONSIDER TAKING LEGAL ACTION. A:\D THAT CAN BE VERY EXPEN- SIVE* * * !\NOTICE IS HEREBY GIVEN THAT WE SHALL RECOMMEND TO OUR CLIENT THAT HE SHOULD IMMEDIATELY, ACCORDING TO LAW, ENTER SUIT 1:\ FAVOR OF GETTING THIS CLAIM SATISFIED. IF OCH CLIENT ACCEPTS OUR RECOMMENDATION . I ADVISE YOU TO PAY THIS CLAIM AT ONCE , BEFORE LEGAL ACTION CAN BE INSTITUTED' , ' SO THAT WE DO NOT HAVE TO G8T I:\VOLVED IN LEGAL ACTION , I THINK YOU CA:\ SEE THAT IT WOCLD BE QUITE BENEFICIAL TO YOU IF YOU PA Y OFF THIS OBLIGATION AT O:\CE' , ' , , 'IF THIS CLAIM IS :\OT PAID IMMEDIATELY. THE NEXT STEP IN OUR OFFICE WILL BE TO CONTACT OUR CLIENT AND HAVE CONSULTATION WITH HIM AND OUR DEFINITE RECOMMENDATION TO OUR CLIENT WILL BE TO RECOMMEND THAT HE SHOl:LD CONSIDER LEGAL ACTION ON THIS CLAIM AT ONCE' , ' , , 'WE HAVE REACHED THE END. AKD IF THIS CLAIM IS NOT PAID AT ONCE, WE WILL HAVE :\0 ALTERNATIVE BUT TO NOTIFY OUR CLIE:\T THAT YOU HA V8 SHOWN NO IKTEREST IN FULFILLING YOUR OBLIGA- CO:-TI:-E:-TAL COLLECTION:- BURBAC OF AMERICA, INC., ET AL. 561 557 Complaint TION. YOU ARB FORCING US TO RECOM lend TO OUR CLIENT THAT HE. COKSIDER LEGAL ACTION' . ' PAR. 8. By and through the use of the aforesaid statements and representations, including the use of the word "collection" in the corporate name, and others of similar import not expressly set out herein, the respondents have represented, are now representing, directly or by implication, that:

1. the said corporate respondent is a collection agency; 2. alleged delinquent debtors' accounts are referred to corporate respondent by creditors for collection;

3. respondents a're prepared to institute legal proceedings in the collection of alleged delinquent debts;

4. legal action with respect t" alleged delinquent debts is about to be or may be initiated; and 5. if payment is not made in response to respondents' demands, the alleged debtor s general credit record wil be adversely affected. PAR. 9. In truth and in fact:

1. the said corporate respondent is not a collection agency; 2. alleged delinquent debtors ' accounts are not referred to corporate respondent by creditors for collection; 3. respondents are not prepared to institute legal proceedings in the collection of alleged delinquent debts;

On the contrary, respondents' sole business is the preparation and mailing of form letters and notices to alleged delinquent debtors exhorting them to pay their alleged creditors; 4. legal action with respect to alleged delinquent debts is neither about to be nor may be initiated.

, it is On the contrary, while respondents' service is being used virtually certain that no legal proceedings are being instituted on the basis of the alleged dehtor s failure to respond to respondents communications; and 5. if payment is not made in response to respondents' demands, the alleged debtor s general credit record will not be adversely affected. Therefore, the statements and representations set forth in Paragraphs Seven and Eight were and are false, misleading and deceptive. PAR. 10. In the course and conduct of their business, and at all times mentioned herein, respondents have been and are now in substantial competition, in commerce, with corporations, firms and individuals engaged in providing services of the same general kind and nature as those provided by respondents.

PAR. 11. The use by respondents of the envelopes and forms as set forth in Paragraph Four hereof, has had, and now has, the tendency and capacity to mislead and deceive members of the public into the Decision and Order 87 F. erroneous and mistaken belief that the said communication is a telegraphic message. Furthermore, the use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the tendency and capacity to mislead members of the public into the erroneous and mistaken belief that said statements and representations were and are true and to induce the payment of substantial sums of money by reasons of said erroneous and mistaken belief.

PAR. 12. 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 and unfair and deceptive acts and practices in or affecting 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 respondents named in the caption hereto with violation of the Federal Trade Commission Act, and the respondents 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 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 complaint to issue herein, 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 Rules; and The Commission having considered the agreement and having provisionally accepted same, and the agreement containing consent order having thereupon been placed on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter pursuant to Section 2.34 (b) of its Rules, now in further conformity with the procedures prescribed in Section 2.34 (b) of its Rules, the Commission hereby issues its complaint in the form contemplated by said agreement, makes the following jurisrlictional findings, and enters the following order: 1. Respondent Continental Collection Bureau of America, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Alabama, with its office and principal place of business located at 3384 Peachtree Rd., N. , Atlanta, Georgia. Colli"JoNTAL COLLECTION BCREAU OF Ay!JoRICA . INC. . ET AL. 563 557 Decision and Order Respondents William M. Weinberg, Peter J. Vann, and Lavail Clements are officers of said corporation. They formulate, direct and control the policies, acts and practices of said corporation, and their address is the same as that of said corporation. 2. The Federal Trade Commission has jurisrliction 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, Continental Collecdon Bureau of America, Inc., a corporation, its successors and assigns, and its officers and Willam M. Weinberg, Peter J. Vann, and Lavail Clements individually and as officers of said corporation, and respondents agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the offering for sale, sale or distribution of any service or printed matter for use in the collection, or attempting to collect, or assisting in the collection of or inducing or attempting to induce, the payment of alleged delinquent debts, in or affecting 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, envelopes, letters forms, or any other materials which by their appearance misrepresent a telegraphic communication.

2. Using or placing in the hands of others for use, envelopes, letters forms or any other materials which misrepresent the nature, import purpose or urgency of any communication; provided that it shall not be a violation of this order for respondents to use within the message of any communication, in the same type size as is otherwse employed in the message, a truthful reference to or implication of urgency. 3. Representing, directly or by implication, that: (a) respondents are prepared to recommend, initiate or cause to be initiated, legal proceedings in the collection of an alleged delinquent debt;

(b) legal action with respect to an alleged delinquent debt has been or is about to be initiated; or misrepresenting that legal action is imminent, wil be or may be initiated;

(c) nonpayment of the alleged delinquent debt in response to respondents' demands wil adversely affect the credit rating, record or status of the debtor with respect to any consumer reporting agency or any other third party; or misrepresenting the impact or effect of nonpayment upon the debtor s credit rating, record or status. PTov7:ded, however That it shall be a defense in any enforcement Decision and Order 87 F.T.C. proceeding initiated under this Paragraph Three for the respondents to establish that such representations are factually correct. 4. Failng clearly and conspicuously to disclose in each jetter, form or notice to alleged delinquent debtors the following statement: This communication is a reminder of creditor s claim. Continental Collection Bureau of America, Inc., does not accept payment. Continental Collection Bureau of America, Inc. does not ordinarily fie suit.

This statement shall be made in prominent type, of a size no smaller than the basic body copy in the letter, form or notice and in a color which contrasts with the color of the stationery and writing or printing in the body of the letter, form or notice. Provided, however That the portion of the above statement, either as to accepting payment or the fiing of suit, or both, shall not be required where respondent indicates specifically in a particular letter, form or notice that it wil accept payment, fie suit or institute legal proceedings and respondent does, in fact, accept payment, fie suit or institute legal proceedings in that particular case, unless, suit was not filed due to subsequent instructions from the creditor or subsequent information from the debtor indicating nonexistence of the alleged debt. 5. Making any statement in any letter, form or notice to alleged delinquent debtors which is inconsistent with, negates or contradicts the affirmative disclosure required by Paragraph Four. 6. Placing in the hands of others the means and instrumentalities to represent any of the matters prohibited in Paragraph Three or which fail to comply with the requirements of Paragraph Four or Five of this order.

It is further ordered That the respondent corporation shall distribute a copy of this order to each of its operating divisions or departments and to each of its present and future officers, agents, representatives or employees engaged in any aspect of the offering for sale, sale or distribution of any service or printed matter for use in the collection, or attempting to collect, or assisting in the collection of or inducing or attempting to induce the payment of alleged delinquent debts, and that said respondent secure a signed statement acknowledging receipt of said order from each such person.

It is further ordered That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order. It is further ordered That the individual respondents named herein CONTI:-ENTAL COLLECTION BUREAU OF A:'1ERICA, INC., ET AL. fi65 557 Decision and Order promptly notify the Commission of the discontinuance of their employment with Continental Collection Bureau of America, Inc., and of their affiliation with a new business or employment. In addition, the individual respondents named herein shall promptly notify the Commission of their affilation with a new business or employment whose principal activities include the offering for sale, sale or distribution of any service or printed matter for use in the collection, or attempting to collect, or assisting in the collection of or inducing or attempting to induce, the payment of alleged delinquent debts, or of their affiliation with a new business or employment in which their own duties and responsibilties involve the offering for sale, sale or distribution of any service or printed matter for use in the collection, or attempting to collect, or assisting in the collection of or inducing or attempting to induce, the payment of alleged delinquent debts. Such notice shall include respondents' current business address and a statement as to the nature of the business or employment in which they are engaged as well as a description of their duties and responsibilities. It is further ordered That respondents named herein shall within sixty (60) days after service upon them of this order, fie with the Commission a report, in writing, signed by the respondents, setting forth in detail the manner and form in which they have complied with this order.

566 FEDERAL TRADE COMMISSIOK DECISIOKS Complaint 87 F.