Cosmo Communications Corporation

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

IN THE MATTER OF COSMO COMMUNICATIONS CORPORATION CONSENT ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3203. Complaint, Dec. 1986-Deci. ion Dec. , 1986 This consent order prohibits, among other things, a Miami, Fla. manufacturer and seller of telephones from misrepresenting that its phones are capable of generating the tones necessary to access alternative long distance and banking services that require touch-tone phones.

Appearances For the Commission: Joel C. Winston and Steven A. Shaffer. For the respondents: Pro se.

COMPLAINT The Federal Trade Commission, having reason to believe that Cosmo Communications Corporation, a corporation Cosmo" or "respondent") has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges: PARAGRAPH 1. Cosmo is a Florida corporation, with its offces and principal place of business located at 16501 N.W. 16th Court, Miami Florida.

PAR. 2. Respondent manufactures, advertises, ofiers for sale, and sells consumer premises telephones and telephone equipment, including pushbutton pulse-only-generating ("touch pulse ) telephones. PAR. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. Typical of respondent's representations for certain of its touch pulse telephones, but not necessarily all-inclusive thereof, are those on the package label attached hereto as Exhibits A and B. The aforesaid representations include the following: (a) "Works with rotary and touchtone systems." (Exhibits A and B) (b) "ALL COSMO pulse/tone switchable circuitry telephones ofier push button rotary lines and tone dialing systems and are compatible with MCI, ITT, AT&T, Sprint and Network systems. " (Exhibit B) Complaint 108 F.'Le;. (c) A picture of the face ofthe telephone prominently displaying its pushbutton keypad. (Exhibits A and B) PAR. 5: Through the use of the statements and depictions referred to in Paragraph Four and other representations not specifically set forth herein, respondent has represented, directly or by implication that:

(a) Respondent's touch pulse telephones are capable of generatingtones to complete a call (b) Respondent's touch pulse telephones will permit the purchaser to use all available phone-accessed services requiring tone-generating telephones, such as alternative long distance service carriers and computerized bill paying and account transaction services. PAR. 6. In truth and in fact (a) Respondent's touch pulse telephones are not capable of generating tones to complete a call; and (b) Respondent' s touch pulse telephones wil not permit the purchaser to use all available phone-accessed services requiring tonegenerating telephones, such as alternative long distance service carriers and computerized bill paying and account transaction services. Therefore, respondent's representations as set forth in Paragraph Five were and are false and misleading.

PAR. 7. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

Chairman Oliver and Commissioner Azcuenaga were recorded as voting in the negative.

.,,,., COSMO COMMUNICATIONS CORP. 257 255 C2ffpli:tint EXHIBIT A 000281 OWSOJ 8C"",,...!yI"'1 i0. \l al hO co ""i . No ad,IIona)""'''v 8 Ehm.",!os '''''..n",,,..

oIaccod . Make ana .. CIU.

"XloosO'ou! .700FOO'".ng ."'Cvance' s"ho ""'"

"Cu"r, 8 Re-o,alo"""",nsl"M' ".call last n"",, aal'- ."""'k5..,m "'I"' 3nd 'ounTo"" .ystems . 1Saul ",'oN ODatloneasy .W"' "asta """" out hM m(J . ,o"JTomaTIc'''lu.e-",ck I"e""n,"na"""llet us..

;:

Complaint IOS F.

EXHIBIT B ::!I9I: J , , . _ .

UH'-.' 255 Complaint 260 FEDBHAL TRADE COMMISSIO:- DECISIONS Decision and Order 108 F. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy ofa draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge the respondent with violation of the Federal Trade Commission Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all 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 the respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the CailM mission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has 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 en ters the following order:

1. Respondent Cosmo Communications Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of Florida, with its offce and principal place of business located at 16501 N.W. 16th Court in the City of Miami, State of Florida.

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

ORDER It is ordered That respondent Cosmo Communications Corporation a corporation; its successors and assigns; and its offcers representa tives, agents and employees, directly or through any corporation subsidiary, division or other device, in connection with the advertis- 255 Decision and Order iug, offering for sale, sale or distribution- or-any consumer prel!i telephone or other telephone communication device in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: A. Representing in any manner, directly or by implication, that any such device is capable of generating the tones necessary to complete a call, unless such is the case.

B. Misrepresenting in any manner, directly or by implication, the compatability of any such device with any tone-accessed telephone service, including, but not limited to, alternative long distance service carriers and phone-accessed computer services. C. Failing to disclose, clearly and prominently, on the package label for each such device in the custody or control of respondent (including existing inventory) that operates by pushbuttons but does not generate tones:

Pulse Telephone: Operates by pulse dialing like a rotary telephone. Will not produce tones.

provided, however that after seven (7) years from the date of service of this order the above disclosure may be replaced by the disclosure Pulse Telephone; and provided further, however that this order shall not be construed to relieve respondent, its successors and assigns from having to comply with any provision of any federal, state, or local law rule, regulation, or order requiring a disclosure different from that specified by this order, and, in the event any such law, rule regulation, or order requires an equally or more comprehensive disclosure concerning the pulse operating system and the inabilty ofthe device to produce tones, that disclosure may be used in place of the disclosure specified by this order.

II.

It is further ordered That respondent shall notify the Commission at least thirty (30) days prior to any proposed change in the corporation such as a 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 under this order.

III.

It is further ordered That respondent shall, within sixty (60) days after service of this order upon it and at such other times as the Decision and Order 108 F. Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

Chairman Oliver and Commissioner Azcuenaga were recorded as voting in the negative.

263 Complaint