Brooklyn Audiology Assocs., P.C

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IN THE MATTER OF BROOKLYN AUDIOLOGY ASSOCS., P.C., ET AL. CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SECS. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3437. Complaint, June 15, 1993 -- Decision, June 15, 1993 This consent order requires, among other things, the New York corporation and its officer to correct false and deceptive claims in Yellow Pages advertisements, prominently post corrected information about Medicare coverage in their offices or provide it to consumers prior to purchase, and prohibits them from misrepresenting the coverage provided by any medical insurance for any hearing-related device or service they offer in the future. Appearances For the commission: Collot Guerard and Eileen Harrington. For the respondents: Pro se.

COMPLAINT The Federal Trade Commission, having reason to believe that Brooklyn Audiology Assocs., P.C., a corporation, and Richard Kaner, individually and as an officer of Brooklyn Audiology Assocs., P.C., ("respondents"), have violated certain provisions of the Federal Trade Commission Act, 15 U.S.C. 41 er seq., and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges: PARAGRAPH |. Respondent Brooklyn Audiology Assocs., P.C., is a New York corporation with its main office and principal place of business located at 8502 4th Ave., Bay Ridge, Brooklyn, New York. Other offices are located at 3003 Ocean Parkway, Brooklyn, New York, and at 142 Joralemon Street, Brooklyn, New York.

Complaint 116 F.T.C.

PAR. 2. Respondent Richard Kaner is an audiologist who is an officer of Brooklyn Audiology Assocs., P.C. He formulates, directs and controls the policies, acts and practices of Brooklyn Audiology Assocs., P.C., and his address is the same as that of said corporation. - PAR. 3. Respondents are, and have been, selling hearing aids and offering hearing tests to the public. Hearing aids are a device within the meaning of Sections 12 and 15 of the Federal Trade Commission Act, 15 U.S.C. 52 and 55.

PAR. 4. The acts and practice of respondents alleged in this complaint are, and have been, in or affecting commerce, as commerce is defined in the Federal Trade Commission Act. PAR. 5. Respondents have placed, or caused to be placed, advertising for hearing aids in various Yellow Pages directories distributed to the general public, as a means of inducing the public to buy their products and services.

PAR. 6. Respondents' advertising includes, but is not necessarily limited to, the attached Exhibit A. This advertising contains the following statement:

Completes 1 4 1 1 2 850 1718 126 37 96.523758 Hearings 1 4 1 1 3 988 1717 133 38 96.668564 Services5 1 4 1 1 4 1133 1718 39 37 97.001984 by5 1 4 1 1 5 1184 1717 195 29 96.382980 Professionals 1 4 1 1 6 1391 1718 203 37 93.188622 Audiologists5 1 4 1 1 7 1608 1742 24 5 87.538673 ...5 1 4 1 1 8 1645 1719 169 36 96.901146 Specialists5 1 4 1 1 9 1828 1719 27 28 96.193871 in5 1 4 1 1 10 1867 1719 48 28 96.906601 thea 1 4 1 2 0 667 1765 1246 38 -1 5 1 4 1 2 1 667 1766 96 37 93.980591 fittings 1 4 1 2 2 776 1765 35 29 96.969498 of5 1 4 1 2 3 820 1765 100 38 96.826035 digital5 1 4 1 2 4 933 1765 120 37 96.936073 hearings 1 4 1 2 5 1066 1765 63 29 93.107613 aids5 1 4 1 2 6 1144 1789 25 5 91.751488 ...5 1 4 1 2 7 1183 1765 232 38 96.095718 Computerized5 1 4 1 2 8 1428 1766 121 37 96.426559 hearings 1 4 1 2 9 1563 1766 48 29 96.966454 aids 1 4 1 2 10 1624 1767 147 36 96.488396 analyzer,5 1 4 1 2 11 1785 1767 57 28 96.895279 ands 1 4 1 2 12 1855 1767 58 28 95.529648 real4 1 4 1 3 0 667 1813 1138 38 -1 5 1 4 1 3 1 667 1822 49 20 94.893723 ears 1 4 1 3 2 729 1818 217 24 93.296158 measurements 1 4 1 3 3 959 1837 26 5 92.659180 ...5 1 4 1 3 4 999 1814 159 28 96.140083 Insurance5 1 4 1 3 5 1171 1813 195 38 96.547531 Assignments 1 4 1 3 6 1379 1814 153 37 96.547531 Accepted5 1 4 1 3 7 1545 1814 56 29 93.213799 for:5 1 4 1 3 8 1626 1815 179 28 93.213799 Medicare. PAR. 7. Through the use of the statement contained in the advertisement referred to in paragraph six, including but not necessarily limited to the advertisement attached as Exhibit A., respondents have represented, directly or by implication, that Medicare will pay for the costs of hearing aids purchased from respondents.

PAR. 8. In truth and fact, Medicare will not pay for the costs of hearing aids purchased from respondents. Therefore, the representation made in paragraph seven was, and is, false and misleading. PAR. 9. Through the use of the statement contained in the advertisement referred to in paragraph six, including but not necessarily limited to the advertisement attached as Exhibit A, respondents have represented, directly or by implication, that BROOKLYN AUDIOLOGY ASSOCS., P.C., ET AL. 479 477 Complaint Medicare will pay for the costs of hearing tests provided by respondents.

PAR. 10. In the advertising described in paragraph six, respondents have failed to disclose that Medicare does not pay for the costs of the hearing tests provided by respondents unless they are performed by order of a physician for the purpose of obtaining additional information necessary for the physician's evaluation of the need for or the appropriate type of medical or surgical treatment for a hearing deficit or related medical problem. In light of the representation made in paragraph nine, these facts would be material to consumers in deciding whether to seek respondents’ services and the failure to disclose these facts was, and is, deceptive. PAR. 11. The dissemination by respondents of the aforesaid false and misleading representations as alleged in this complaint constituted, and now constitutes, an unfair or deceptive act of practice and the making of false advertisements in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act, 15 U.S.C. 45(1) and 52. Complaint EXHIBIT A ANTM © OO) wiwertes Enerin conan HO ‘COMPLETE HEARING SERVICES - BY PROFESSIONAL AUDIOLOGISTS BROOKLYN'S ONLY AUTHORIZED CENTERS OF Miracle-Ear HEARING INSTRUMENTS o SPECIALISTS IN THE FITTING OF Digital Hearing DIGITAL HEARING AIOS Aid Tec...clogy 9 STATE OF TKE ART EQUIPPED OFFICES INCLUDING COMPUTERIZED HEARING AID ANALYZER, ANO REAL EAR MEASUREMENT, » ALL PROFESSIONAL SERVICES PERFORMED WirecleEar > EXCLUSIVELY BY N.Y. STATE LIC. AUDIOLOGISTS » SALES, SERVICE ON ALL MAKES & MODELS ‘ o EMPIRE PLAH ‘ TH CARE e TRAYELERS s TOTAL HEALTH eHdO ACCEPTED 1 HEAL’ .

Sees Cy eS A ie eo hades = RICHARD KANER, M.A., C.C.C. - DIRECTOR Serving Brooklyn For Over 10 Yrs Bz 63 CONVENIENT LOCATIONS tay RIDGE ARLYN HTS mugyTON srw 0502 4TH AVE. TAZ JORALEMON ST (RIED) = -S0C] OCEAN Pat 745-6363 855-4330 449-9800 ASHA Certified ASHA Certified NY State Licensed Audiologists NY State Licensed Speech Pathologist HEARING AIDS COMPLETE AUDIOLOGICAL EVALUATIONS.

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‘ ASK ABOUT OUR GUARANTEED SATISFACTION FOR PRECIZION TESTING FITTING ANO AZPAIRS CALL FOR FREE BROCHURE BROOKLYN QUEENS Ast erm 91. Ab 18 QUEENS BLYD.

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BROOKLYN AUDIOLOGY ASSOCS., P.C., ET AL. 481 477 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of respondents named in the caption hereof, and respondents having been furnished thereafter with a copy of a draft complaint that the Bureau of Consumer Protection proposed to present to the Commission for its consideration and that, if issued by the Commission, would charge respondents with . violation of the Federal Trade Commission Act; and Respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondents of all the jurisdictional facts set forth in the aforesaid draft 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 respondents have violated the said Act, and that the 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 Brooklyn Audiology Assocs., P.C. is a New York corporation with its main office and principal place of business located at 8502 4th Ave., Bay Ridge, Brooklyn, New York. Other offices are located at 3003 Ocean Parkway, Brooklyn, New York, and at 142 Joralemon Street, Brooklyn, New York. Respondent Richard Kaner is an audiologist who is an officer of Brooklyn Audiology Assocs., P.C. He formulates, directs and controls the policies, acts and practices of said corporation, and his Decision and Order 116 F.T.C.

principal office and place of business is located at 8502 4th Ave., Bay Ridge, Brooklyn, New York.

Respondents are, and have been, selling hearing aids and offering hearing tests to the public.

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

ORDER I.

It is ordered, That respondents Brooklyn Audiology Assocs., P.C., a New York corporation, its successors and assigns, and its officers, and Richard Kaner, individually and as an officer of said corporation, and respondents’ agents, representatives, and employees, directly or through any corporation, subsidiary, division, affiliate, partnership, sole proprietorship, or other device, in connection with the advertising, promotion, sale, distribution or offering for sale of any hearing-related device or service in or affecting commerce, as commerce is defined in Federal Trade Commission Act, do forthwith cease and desist from:

A. Misrepresenting, directly or by implication, in any manner that Medicare will pay for the costs of such device or service. B. Misrepresenting, directly or by implication, in any manner that other types of medical insurance, whether federal, state, or private, will cover the costs of such device or service. II.

It is further ordered, That respondents Brooklyn Audiology ' Assocs., P.C., a corporation, its successors and assigns, and its officers, and Richard Kaner, individually and as an officer of said corporation, within fifteen (15) days after this order becomes final, send a certified letter to the publishers of all Yellow Pages directories that contain the representations in paragraphs seven and nine of the complaint. The letter shall state that any statements BROOKLYN AUDIOLOGY ASSOCS., P.C., ET AL. 483 477 Decision and Order representing, directly or by implication, that Medicare will pay for the costs of hearing aids are to be eliminated from the next appearing edition in which it is possible to make changes, and in all subsequent editions. The letter shall also state that any statements representing, directly or by implication, that Medicare will pay for the costs of hearing tests are to be eliminated from the next appearing edition in which it is possible to make changes, and in all subsequent editions, unless the representation is qualified by a statement that the hearing tests must be ordered in advance by a physician for medical diagnostic purposes. Respondents shall include a copy of this order with the letter. Ill.

It is further ordered, That respondents Brooklyn Audiology Assocs., P.C., a corporation, its successors and assigns, and its officers, and Richard Kaner, individually and as an officer of said corporation, within fifteen (15) days after this order becomes final, either:

A. Post in each of the locations in which respondents do business, a prominent notice that is at least 12" by 15" in size that states clearly and conspicuously the following: MEDICARE DOES NOT COVER THE COSTS OF HEARING AIDS. MEDICARE ALSO DOES NOT COVER THE COSTS OF HEARING TESTS CONDUCTED IN THIS OFFICE UNLESS THE TESTS ARE FIRST ORDERED BY A PHYSICIAN FOR MEDICAL DIAGNOSTIC PUR- POSES.

This notice shall be clearly and conspicuously posted in the reception area so that it is visible to consumers as they enter the business location, and in each of the rooms where the hearing tests are conducted; or B. Provide each consumer prior to any discussion about the consumer's hearing problem a notice that is at least 8 1/2" by 11" in size that states clearly and conspicuously the following: Decision and Order 116 F.T.C.

MEDICARE DOES NOT COVER THE COSTS OF HEARING AIDS. MEDICARE ALSO DOES NOT COVER THE COSTS OF HEARING TESTS CONDUCTED IN THIS OFFICE UNLESS THE TESTS ARE FIRST ORDERED BY A PHYSICIAN FOR MEDICAL DIAGNOSTIC PUR- POSES.

Respondents shall obtain the consumer's signature on the notice. The signed notices shall be available to representatives of the Federal Trade Commission for inspection for a period of three (3) years from the date of service of this order.

C. The requirements described in (A) and (B) of this paragraph shall be followed for no less than two (2) years after the last date of distribution by the publisher to the general public of the Yellow Pages directories containing the representations in paragraphs seven and nine of the complaint.

IV.

It is further ordered, That respondents Brooklyn Audiology Assocs., P.C., a corporation, its successors and assigns, and its officers, and Richard Kaner, individually and as an officer of said corporation, shall, for three (3) years after the date of this order, maintain and upon request make available to representatives of the Federal Trade Commission for inspection and copying all records demonstrating compliance with this order, including but not necessarily limited to:

(1) Communications with publishers of the Yellow Page directories regarding the representations in paragraphs seven and nine of the complaint, and (2) The notices required by paragraphs III (A) and (B) above. V.

It is further ordered, That respondents shall, within thirty (30) days after service upon them of this order, distribute a copy of the order to each of their operating divisions subsidiaries, and related offices, to each of their managerial employees, to each of their employees responsible for advertising, and to each of their officers, BROOKLYN AUDIOLOGY ASSOCS., P.C., ET AL. 485 477 Decision and Order agents, representatives or employees selling hearing aids and/or offering hearing tests.

VI.

It is further ordered, That the corporate respondent shall notify the Commission at least thirty (30) days prior to any proposed change in respondent such as dissolution, assignment, purchase, or sale resulting in a change of ownership or business structure, or any other change in respondent that may affect compliance obligations arising out of this order.

VIL.

It is further ordered, That the individual respondent shall hereafter promptly notify the Commission in the event of the discontinuance of his present business or employment and, for a period of five (5) years from the date of service of this order, shall promptly notify the Commission of each affiliation with a new business or a new employment whose activities would or might include the sale of hearing aids, and/or the offering of hearing tests, each such notice to include the respondent's new business address and a statement of the nature of such business or employment and a description of the respondent's expected duties and responsibilities. Vill.

It is further ordered, That respondents shall, within sixty (60) days after service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with all requirements of this order. Complaint 116 F.T.C.