Farnum Companies, Inc

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

Complaint 96 F.T.C.

IN THE MATTER OF

FARNAM COMPANIES, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3052. Complaint, Dec. 11, 1980—Decision, Dec. 11, 1980

This consent order requires, among other things, a Phoenix, Ariz. firm and its corporate officer, engaged in the manufacture, advertising, sale and distribution of pesticide products, to cease representing, through print and broadcast advertising or otherwise, that their pesticide products are absolutely or unqualifiedly safe, non-toxic or free of hazard to humans, pets, wildlife or the environment; or making any representation that is inconsistent or which detracts from the effectiveness of required warnings or directions for use set forth on pesticide product labels. The firm is further prohibited, for a period of three years, from disseminating advertising or promotional material which fails to include a warning statement as designated in the order.

Appearances

For the Commission: Allen R. Franck.

For the respondent: Steven Feola, Smith & Feola, Phoenix, Ariz.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, as amended, and by virtue of the authority vested in it by said Act, the Federal Trade Commission having reason to believe that Farnam Companies, Inc., a corporation, and Russell W. McCalley, individually and as an officer of said corporation, [hereinafter sometimes 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. Respondent Farnam Companies, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Arizona, with its principal office and place of business located at 2230 East Magnolia St., Phoenix, Arizona. Respondent Russell W. McCalley is an officer of the corporation. He directs and controls the acts and practices of said corporate respondent, including the acts and practices hereinafter set forth. His address is the same as that of said corporate respondent. PAR. 2. Respondents have been, and are now, engaged in the offering for sale, sale and distribution of various pesticide products,

FARNAM COMPANIES, INC., ET AL. 827

826 Complaint

including a snail and slug pesticide designated as “Snail Jail,” to distributors, jobbers and retailers for resale to the public, and to the public at retail. For the purpose of this complaint and the order attached, the term “pesticide product” refers to any substance or mixture of substances, including molluscacides, intended for preventing, destroying, repelling or mitigating “plant pests” as defined at 7 U.S.C. 150aa(c).

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time in the past have caused, said snail and slug pesticide to be shipped from their warehousing facilities in Omaha, Nebraska to purchasers located in various other States throughout the United States, and maintain, and at all times mentioned herein did maintain, a substantial course of trade in said product in commerce, as “commerce” is defined in the Federal Trade Commission Act.

PAR. 4. Snail Jail pesticide is registered with the Environmental Protection Agency as required under the Federal Pesticide, Fungicide and Rodenticide Act, 7 U.S.C. 136, et seq., and as required by that Act, the following warning label appears on the package in which the product is sold:

WARNING: Use only as directed. Read entire label before using. This pesticide may be fatal to children and dogs or other pets if eaten. Keep children and pets out of treated area. May be fatal if swallowed. Do not take internally. Harmful dust. Avoid breathing dust and vapor. Avoid contact with skin, eyes, and clothing. Do not contaminate or store near feed or food stuffs. Wash after handling. Baits should be spread in such a way that children, pets or farm animals cannot reach them. Birds feeding in treated areas may be killed. Do not store in direct sunlight. Do not reuse empty container. Wrap container and put in trash collection.

PAR. 5. In the course and conduct of their business, respondents have disseminated or caused to be disseminated advertisements concerning pesticide products, including “Snail Jail,” by means of printed advertisements in magazines and newspapers distributed through the mail and by means of advertisements transmitted by television stations located in various States of the United States, which had the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of pesticide products, including “Snail Jail.”

PAR. 6. Among the advertisements so disseminated or caused to be disseminated by respondents are those contained in Exhibits A through G, attached hereto and by this reference made a part hereof.

PAR. 7. The aforesaid advertisements represent directly or by implication that:

Complaint

1. Snail Jail protects users, pets and children, is completely safe for children and is non-toxic. 2. Snail Jail's toxic ingredients [metaldehyde and carbaryl] are locked inside a plastic container and can not come in contact with skin no matter how much it is handled. 3. The Environmental Protection Agency has approved Snail Jail as safe for users, children, pets and the general environment.

PAR. 8. In truth and in fact:

1. Snail Jail is potentially harmful to users, pets and children who swallow or have contact with the toxic ingredients in the product. 2. Snail Jail's toxic ingredients can come into contact with skin through handling of the Snail Jail container. 3. The Environmental Protection Agency has not approved Snail Jail as safe for users, pets, children, or the general environment.

Therefore, the aforesaid advertisements were, and are, deceptive or unfair.

PAR. 9. By making statements and representations, alone or in cooperation with others, orally or in writing, which appear in advertisements in print or broadcast media, in promotional material and by other means, about Snail Jail in a manner which is inconsistent with or disregards warnings, cautions, limitations and instructions for use found in labeling, respondent negates the import and purposes of, and detracts from the effectiveness of such warnings, cautions, limitations or instructions.

Therefore, the advertisements and other promotional materials, which contain the statements and representations referred to in Paragraph Nine above are unfair or deceptive.

PAR. 10. In the further course and conduct of its business as aforesaid, respondents have made statements and representations, alone or in cooperation with others, orally or in writing, which appear in advertisements in print and broadcast media, in promotional material or by other means, about Snail Jail without disclosing that such products are hazardous. Knowledge of the hazards associated with the use of such products would enable and encourage consumers to exercise the proper degree of care in using them.

Thus, respondents have failed to disclose material facts which, if known to consumers, would be likely to affect their consideration of whether or not to purchase, and how to properly use, such products. Therefore, advertisements, promotional materials, acts and prac-

FARNAM COMPANIES, INC., ET AL. 829

826 Complaint

tices, which fail to disclose the aforesaid material facts, are unfair or deceptive. PAR. 11. In the course and conduct of their business, and at all times mentioned herein, respondents have been and now are, in substantial competition, in or affecting commerce, with corporations, firms and individuals engaged in the sale of merchandise of the same general kind and nature as merchandise sold by respondents. PAR. 12. The use by respondents of the aforesaid unfair or deceptive statements, representations, acts and practices directly or by implication, has had, and now has, the capacity and tendency to mislead members of the consuming public into the purchase of substantial quantities of respondents' pesticide products. PAR. 13. The 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 or deceptive acts or practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act, as amended.

Complaint 96 F.T.C.

Garden Supply Merchandiser February 1979

EXHIBIT A MAGAZINE DEALER ADVERTISEMENT Appeared in:

Home And Garden February & March 1979

FARNAM [illegible] 826 Complaint

New! Snail Attracts/Kills Snails and Slugs

Never again will your customers have to

Now there's Snail & Slug Jail! It contains a secret formula — "attractant." Snails, slugs, even ants, earwigs and sowbugs are lured by this attractant. Once inside they run into metaldehyde and carbaryl . . . they never come out. Both ingredients are locked inside the Snail & Slug Jail . . . protects children and pets. The Snail Jail can be used over and over because everything inside is protected from the weather.

Snail & Slug Jail, the new product that answers your consumers' problems.

Be ready — order today!

INTRODUCTORY SPECIAL

ORDER 6/12 OF A CASE AND GET 1/2 CASE FREE YOU SAVE $7.44

YOUR COST $22.33

YOU SAVE $7.44

YOUR COST $44.66

YOU SAVE $14.88

OFFER EXPIRES MARCH 31, 1976

832 | FEDERAL TRADE COMMISSION DECISIONS | 96 F.T.C. Complaint

Slug Jell Plus Fertilizer and Savings

spread poison on their lawns or gardens.

PROTECTS PETS PROTECTS CHILDREN ENVIRONMENTALLY APPROVED EPA REG. NO 5521-97-270

[illegible] and Sowbugs Snail Jell Snail and Slug Killer

[illegible] the environmentally safe way. [illegible] kills snails and slugs [illegible] protect your [illegible] and [illegible] around [illegible] ornamentals [illegible] vegetables [illegible] flowers [illegible] gardens [illegible] and [illegible] in [illegible] and [illegible] areas.

1-800-528-6050 / EXT 832

RAINBOW Rainbow Technology Corp. 1024 [illegible] St. [illegible], CA 92621 (714) 528-6121

FARNAM COMPANIES, INC., ET AL. 833

826 Complaint

EXHIBIT B

NEWSPAPER AD

Appeared in:

Times Picayune New Orleans, La.

7/13, 7/14, 7/15/79

Dallas Morning News Dallas, Texas 7/13/79

Attract and Kill Snails, Slugs, Pill Bugs, Earwigs With Amazing New

Snail Jail

* Approved lure attracts and destroys garden pests without spraying harmful poison near or plants * Destroys cutworms, sowbugs, slugs, snails, pill bugs * Effective over a 500 square foot area * Eliminates the need for dangerous, expensive sprays * Fast and clean, kills indoors, kills outdoors * Convenient, disposable container * Can't spill, can't leak, won't blow away * Won't wash away in the rain or blow away in the wind * Reusable, lasts for months

ONE LOW PRICE BUYS MONTHS OF PROTECTION FOR YOUR YARD, VEGETABLE GARDEN, & FLOWER GARDEN — THROUGH ALL TYPES OF WEATHER!

LOOK FOR THIS DISPLAY AT YOUR NEAREST FARNAM DEALER TODAY!

Snail Jail is available at the following stores in the Dallas area:

Turner Hardware Handy Dan's (all stores) Chuck's Nursery Bishop's Gardens Gibson's (selected stores) Skaggs (all stores) Bruce Miller's Nursery C & S Hardware Stores (all stores) Stroud's Garden Center Mr. G's Garden Center

Complaint 96 F.T.C.

EXHIBIT C

STOP TRADE MARK Swept Jean PAT. 4,027,405

NO NEED TO WORRY ABOUT WASHING INSTRUCTIONS Swept Jean Company has solved the problem of how to keep size and shape in the jeans you want to look good in. No more guesswork about washing instructions. No more shrinking or fading. No more ironing.

Swept Jean is completely washable and needs no ironing. You can wear them again and again. You'll always look your best in Swept Jean. Look for the Swept Jean label at fine stores everywhere.

Swept Jean Company 350 Fifth Avenue New York, New York 10001

TO ORDER CHECK OR MONEY ORDER TO SWEPT JEAN COMPANY P.O. BOX 275, DEPT. 1 DALLAS, TEXAS 75221

MAGAZINE ADVERTISEMENT

Appeared in:

Elks Magazine, April 1979 Family Food Garden, April 1979 Moose, April 1979 National Gardener, July 1979, August 1979 Organic Gardening, April 1979 Sunset Magazine, May 1979 VFW, April 1979

[illegible]

826 Complaint

1 2 EXHIBIT D

Snail & Slug Jet KILLS SNAILS AND SLUGS AND THEIR EGGS

Snail & Slug Jet

NET

NO NEED TO WORRY about watering, dangerous odors, Contamination, bait for children and pets. Environmentally safe and exceptionally effective. NON TOXIC. Can be placed in gardens, flower beds, or lawns. Remains in place as long as these pests are present.

THESE PESTS DEVOUR many garden vegetables, ornamental flowers, citrus, shrubs, trees and lawns. STOP THESE PESTS FOREVER with Farnam's new unique Snail & Slug Jet! It attracts and kills snails and slugs and their eggs.

COMES COMPLETE AND READY TO USE in a reusable, refillable 1 quart container.

One Snail & Slug Jet covers over 1,000 sq. ft. Use year around. Order a 2nd one for your winter garden. Only $4.98 ppd.

SNAIL & SLUG JET FARNAM EQUIPMENT CO.

Dept. EX-509, 2230 E. Magnolia Phoenix, Arizona 85034 [illegible] 4/79

Farnam Equipment Co.

Dept. EX-509, 2230 E. Magnolia, Phoenix, Arizona 85034 Please send ______ Snail & Slug Jet(s) @ $4.98 ppd. Enclosed is my check for $______ Name ______________________________________________________ Address ____________________________________________________ City ______________________________ State ________ Zip ________ (Please print or type)

MAGAZINE ADVERTISEMENT

Appeared in:

Family Handyman, April 1979 Flower & Garden, April 1979 Kiwanis, April 1979 Mechanix Illustrated, April 1979 Workbench, May 1979, June 1979 Progressive Farmer, April 1979

Complaint 96 F.T.C.

EXHIBIT E

ADVERTISING SLICK SENT TO DEALERS

Slug& Snail Jail ATTRACTS AND KILLS PROTECTS CHILDREN PROTECTS PETS LASTS FOR WEEKS ONLY $000 STORE NAME

Slug& Snail Jail ATTRACTS AND KILLS SNAILS & SLUGS EARWIGS SOWBUGS ONLY $000 STORE NAME

Slug& Snail Jail ATTRACTS/KILLS SNAILS/SLUGS EARWIGS SOWBUGS ONLY $000 STORE NAME

Slug& Snail Jail

© 1978 FARNAM COMPANIES, INC., OMAHA, NEBRASKA 68112.

FARNAM CO.

826 Complaint

ADVERTISING SLICK SENT TO DEALERS EXHIBIT F

ATTRACTS/KILLS SNAILS, SLUGS, SOWBUGS, EARWIGS PROTECTS CHILDREN • PROTECTS PETS LASTS FOR WEEKS AND WEEKS

Snail Jail™

STORE NAME

Snail Jail™

ATTRACTS AND KILLS • SNAILS • SLUGS • EARWIGS • SOWBUGS

PROTECTS CHILDREN PROTECTS PETS LASTS FOR WEEKS

ONLY

STORE NAME

Snail Jail™

ATTRACTS/KILLS SNAILS & SLUGS PROTECTS CHILDREN PROTECTS PETS

© 1978 FARNAM COMPANIES INC. OMAHA NEBRASKA 68112

Complaint 96 F.T.C.

SEALER-MAILER Story Board for Television Ads EXHIBIT G

Introducing...

Your Two New SuperStomping Snail Jail Salesmen!

SNAIL JAIL STAMP LICKER

826 Complaint

Dynamic, Fully Animated Talk Commercial Starts Selling For You On March 29th!

LOS ANGELES...

SAN FRANCISCO...

SAN DIEGO...

8 WEEK SCHEDULE ON NETWORK STATIONS

BEST TIMES!

:30 SECOND FULL-ANIMATION

OVER 1455 HOUSEHOLD RATING POINTS

3.

4.

7. (Voice Over) Small Jolt, It's totally neat!

11. ...gravel and shops... for up to 100 square feet.

12.

Complaint 96 F.T.C.

[Panel 1] 1. DOG: "What Happened?"

CAT: "Don't Cha Remember?"

[Panel 2] 2. CAT: "We were in the back yard havin' a picnic with all those gummy lovin' picnics!"

[Panel 3] "Those ants are doing tricks . . .

a trick picture!"

[Panel 4] 5. DOG: "Why didn't our master use Bread Jelly?"

CAT: "It makes it too thin . . ."

[Panel 5] 6. "... the gas'll take 'em to jail"

[Panel 6] "the poison is spread in your yard."

[Panel 7] 9. BUGS: "It's Hell and chemicals are the same."

[Panel 8] 10. "... here come pets and kids. Bread Jelly will kill them too."

[Panel 9] He for weeks! (End Yellow Over)

[Panel 10] 13. CAT: "I'll case your pet . . ."

[Panel 11] 14. "... doesn't have nine lives."

FARNAM COMPANIES, INC., ET AL.

826 Decision and Order

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 Denver Regional Office 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, their attorney, 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 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 sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Farnam Companies, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Arizona, with its office and principal place of business located at 2230 East Magnolia St., Phoenix, Arizona. Respondent Russell W. McCalley is an officer of said corporation He formulates, directs and controls the policies, acts and practices o said corporation, and his principal office and place of business i located at the above-stated address.

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

ORDER

It is ordered, That Farnam Companies, Inc., a corporation, successors and assigns, and its officers, and Russell W. McCall individually and as an officer of said corporation, and responden

Decision and Order 96 F.T.C.

representatives, agents, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of pesticide products in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, as amended, do forthwith cease and desist from:

1. Representing directly or by implication, by print or broadcast advertising, other promotional material, or through sales representatives’ oral statements, that the pesticide products manufactured, distributed or sold by or through said respondents are absolutely or unqualifiedly safe, non-toxic or free of hazard to adults, children, pets, wildlife or the environment. 2. Making any representation, directly or by implication, by print or broadcast advertising or other promotional material, which contradicts, is inconsistent with, or detracts from the effectiveness of any warning, caution or direction for use required by law to be set forth as a label on pesticide products. 3. Representing that the Environmental Protection Agency or any other governmental agency had approved any pesticide product, unless such is the case; or misrepresenting the scope of approval granted any such product by any governmental agency.

It is further ordered, That for the period of three (3) years following the date of service of this order, respondents shall not disseminate or cause the dissemination of:

a) Any print advertising or print promotional material for any pesticide product unless the following statement is clearly and conspicuously included in such print advertising or print promotion-material:

ALL PESTICIDES CAN BE HARMFUL TO HEALTH AND THE ENVIRONMENT IF MISUSED. READ THE LABEL CAREFULLY AND USE ONLY AS DIRECTED.

b) Any television broadcast advertisement for any pesticide product unless such advertisement orally and visually includes the following statement made in a clear and conspicuous manner:

ALL PESTICIDES CAN BE HARMFUL.

READ THE LABEL. USE AS DIRECTED.

Any other broadcast advertisement for any pesticide product unless such advertisement orally includes the following statement in a clear and conspicuous manner:

FARNAM COMPANIES, INC., ET AL. 843

826 Decision and Order

ALL PESTICIDES CAN BE HARMFUL.

READ THE LABEL. USE AS DIRECTED.

It is further ordered, That respondent, Farnam Companies, Inc., forthwith distribute a copy of this order to all its operating divisions engaged in the sale, advertising, promotion or distribution of pesticide products and to all present and future employees of said respondent responsible for the advertising, promotion, distribution or sale of such products, and that said respondents secure from each such person a signed statement acknowledging receipt of said order. It is further ordered, That respondent, Farnam Companies, Inc., 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 this order.

It is further ordered, That the individual respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiliation with a new business or employment. In addition, for a period of ten (10) years from the date of service of this order, said respondent shall promptly notify the Commission of each affiliation with a new business or employment. Each such notice shall include the respondent's new business address and a statement of the nature of the business or employment in which the respondent is newly engaged as well as a description of respondent's duties and responsibilities in connection with the business or employment. The expiration of the notice provision of this paragraph shall not affect any other obligation arising under this order.

It is further ordered, That each of 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 each has complied with this order. It is further ordered, That this order shall become effective upon service.

Complaint 96 F.T.C.

IN THE MATTER OF

EQUIFAX INC.

FINAL ORDER, OPINION, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FAIR CREDIT REPORTING ACT AND SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket 8954. Complaint, Feb. 21, 1974—Final Order, Dec. 15, 1980

This order requires, among other things, an Atlanta, Ga. consumer credit reporting firm to cease misrepresenting the identity of its investigative personnel; improperly providing its customers with updated consumer report information; and rewarding or punishing its employees on the basis of the amount of adverse information collected and included in their reports on consumers. The order further requires that the company cease failing to make statutorily required disclosures to consumers requesting information concerning their credit status; provide such consumers with all the information in its files; and reinvestigate any disputed item of information promptly.

Appearances

For the Commission: Robert W. Russell, Virginia M. Conway and David G. Grimes, Jr.

For the respondent: Willis B. Snell, Francis M. Gregory, Jr., Michael L. Denger and Shelley Zena Green, Sutherland, Asbill & Brennan, Washington, D.C.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act and the Fair Credit Reporting Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Retail Credit Company, a corporation, hereinafter referred to as respondent, has violated the provisions of said Acts, 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:

DEFINITIONS

PARAGRAPH 1. For the purpose of this Complaint the following definitions apply:

(a) “consumer reporting agency”—any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating