Consumer Protection Mission (Detail)
A.H. Peters Funeral Home of Grosse Pointe, Inc.; David L. Peters; Roy A. Peters
A.H. Peters and its officers agreed to pay a $60,000 civil penalty to settle allegations that they violated the Funeral Rule. The Commission alleged that they conditioned the furnishing of certain funeral goods and services on the purchase of other goods and services, failed to provide general price lists, and failed to give properly itemized statements. Under the settlement, the defendants are required to follow written procedures and to participate in a training program to ensure that their employees comply with the Funeral Rule in the future.
All Snax, Inc.; Harvey Waters
All Snax and its president agreed to a consent order under which they are required to pay a $20,000 civil penalty to settle allegations that they violated the Franchise Rule in their sale of display rack distributorships for snack foods and related products. According to the Commission, the defendants failed to give potential investors a complete pre-purchase disclosure document about the business opportunity they sold and documentation to support claimed earnings. Under the provisions of the settlement, the defendants are permanently enjoined from future violations of the Rule.
Allied Bond & Collection Agency, Inc.
Allied Bond & Collection Agency settled allegations that it was in violation of the Fair Debt Collection Practices Act (FDCPA), which prohibits the use of threatening, harassing, and deceptive tactics to collect debts. The Commission alleged that company employees threatened to sue consumers when there was no reasonable likelihood that the consumers would be sued and telephoned consumers at work when they knew such calls were prohibited by the consumer's employer. The agreement requires the company to pay a $140,000 civil penalty and prohibits it from future violations of the FDCPA.
American Direct Marketing, Inc.; Herman S. Howard
The Commission obtained an agreement from American Direct Marketing and its president to pay a $100,000 civil penalty as part of a settlement of allegations that they violated the Mail/Telephone Order Merchandise Rule, which requires merchandisers to ship items ordered within a certain time period. The Commission alleged that the mail-order company shipped products late, failed to properly notify consumers of their option to cancel late orders, and sent refund checks that bounced. The defendants are prohibited from violating the Rule in the future.
America's Radio Transmitter, Ltd.; America's Radio Transmitter, Inc.; Leon D. Swichkow
The two companies and their president agreed to pay a $10,000 civil penalty to settle allegations that they failed to give potential investors presale disclosures about the business opportunities they sold and documentation to support claimed earnings, as required by the Franchise Rule. America's Radio Transmitter issued franchises to sell short-range AM radio transmitters for promotional use, claiming investors could earn $120,000 a year. The settlement prohibits the defendants from violating the Rule and from making false statements or misrepresenting material aspects of any business venture they offer.
Beeson Funeral Home, Inc.; James E. Beeson, Jr.
Beeson Funeral Home and owner James Beeson settled allegations that they violated the Funeral Rule by failing to provide consumers with price lists and by bundling funeral goods and services. The defendants agreed to pay a civil penalty of $20,000 and to comply with the Rule in the future.
(Building Inspector of America, Inc., The)
Lawrence Finkelstone; Beverly Tisei; Ralph Tisei
Three officers of The Building Inspector, which offered franchises for home inspection services, settled allegations that they failed to disclose to potential purchasers the litigation and bankruptcy history of the company and two of its officers. The Commission also alleged that the defendants made unsubstantiated claims about the earnings franchise buyers could expect, among other violations of the Franchise Rule. The settlements bar the officers from future violations of the Rule and require civil penalty payments, as follows: Lawrence Finkelstone, $5,000; Beverly Tisei, $10,000; Ralph Tisei, $20,000.
Chynoweth Corporation (d/b/a IS International)
Chynoweth, doing business as IS International, a company that performs screening of tenant applicants for apartments, executes evictions, and acts as a collection agency for rent and damage charges, agreed to settle allegations that it violated provisions of the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. The Commission alleged that the company engaged in a wide range of violations, including revealing consumers' debts to third parties, making harassing and abusive telephone calls, and misrepresenting who it was or what legal action it might take. The company also allegedly failed to correct inaccurate data about tenants in consumer files it made available to potential landlords. Under the terms of the settlement, IS International must pay a $10,000 civil penalty and is enjoined from violating the laws in the future. In addition, the firm and its employees are required to inform consumers of their protections under the law.
Dahlberg, Inc.
Dahlberg agreed to pay a $2.75 million civil penalty to settle allegations that it made numerous false and unsubstantiated claims for its Miracle-Ear Clarifier, a "noise-suppression" hearing aid, in violation of a 1976 Commission order. The settlement prohibits future violations of the earlier order, which bars Dahlberg from making false or unsubstantiated claims about the features, performance, uniqueness, superiority, or efficacy of its hearing aids. This is the largest civil penalty ever obtained in a consumer protection case.
Daniels & Hutchison Funeral Homes (Robert C. Hutchison, Jr., d/b/a);
House of Wright Mortuary, Inc.; Jacquita L. Wright; Robert O. Wright;
J. Llewellyn Bell Memorial Chapel, Inc.; J. Llewellyn Bell;
John F. Yasik, Inc.; John P. Yasik, Jr.; John P. Yasik, III; Stephanie A. Yasik
In a nationwide crackdown on funeral homes, four Delaware-area funeral homes and their operators agreed to pay civil penalties as part of agreements settling allegations that they violated the Funeral Rule. The Commission alleged that the funeral homes failed to give test shoppers the required general price list for goods and services and, in some instances, failed to provide separate price lists for items not on the general list. The agreements require the funeral homes to comply with the Rule in the future and impose civil penalties as follows: Robert Hutchison, doing business as Daniels & Hutchison, $3,500; House of Wright and corporate officers Robert and Jacquita Wright, $7,700; J. Llewellyn Bell Memorial Chapel and J. Llewellyn Bell, $3,200; John F. Yasik, Inc., and three corporate officers, $3,700.
Doctors Eyecare Center, Inc.; Daniel B. Shropshire
Doctors Eyecare, which offers eye examinations and eyeglasses, and its president agreed to pay a $10,000 civil penalty to settle allegations that they failed to provide many patients with a copy of their eyeglass prescription after completing an eye examination and that they unlawfully included on their prescription forms a waiver of liability as to accuracy. These practices violate the Prescription Release Rule, which requires an ophthalmologist or optometrist to give a copy of the patient's eyeglass prescription to the patient immediately after the eye examination is over. In addition to requiring the civil penalty, the settlement prohibits the defendants from further violating the Rule. This is the first case alleging violation of this Rule, which is intended to provide consumers with a choice of eyeglass providers and the opportunity to shop around for competitive prices.
Double Z Manufacturing, Inc.
Double Z Manufacturing, a women's clothing manufacturer, agreed to pay a $50,000 civil penalty to settle allegations that it put faulty care labeling in several styles of formal and party dresses. As a result, the decorative trim or other parts of the garments were damaged when they were dry-cleaned according to the labels, the Commission alleged. Double Z Manufacturing also agreed to use proper care instruction labels on its garments in the future, in compliance with the Care Labeling Rule.
Eggland's Best, Inc.
The Commission's follow-up of its 1994 case against Eggland's led to another settlement with the company over the cholesterol-related claims it has made in marketing its eggs, and this time the settlement includes a civil penalty of $100,000. The Commission alleged that Eggland's advertising conveyed the same false and unsubstantiated claims about the effect of its eggs on serum cholesterol that were challenged in 1994. The consent decree prohibits Eggland's from violating the 1994 Commission consent order in the future.
Eton Derma Laboratories; Atida Karr Enterprises, Inc.; Atida H. Karr
The marketer of an over-the-counter acne treatment agreed to pay a $200,000 civil penalty to settle allegations that infomercials representing the product as an effective treatment for severe or cystic acne were deceptive. The Commission alleged that, at the time Atida Karr and her companies made the claims, they did not have competent and reliable scientific or medical evidence to support them. According to the Commission, the recent claims also violate a 1979 order prohibiting Karr from making unsubstantiated claims about the effectiveness or superiority of any acne preparation she markets.
Family Memorial Funeral Home of Yazoo City, Inc.; Michele Goodloe;
Glenwood Funeral Homes, Inc.; John Kamman, Jr.; William D. Mobley, Sr.;
Gregory Funeral Home, Inc.; Vay Gregory McGraw;
Robbins Funeral Home (Yolande T. Robbins, d/b/a);
Stricklin-King Funeral Home, Inc.; Aaron S. King, Jr.; David A. King;
W.H. Jefferson Funeral Home; James E. Jefferson, Jr.;
Williams Funeral Service (Matthew Williams, Jr., d/b/a)
In a sweep of funeral homes in Mississippi, the Commission alleged that seven homes violated the Funeral Rule by failing to give test shoppers the required general price list of funeral goods and services. In some instances, the homes failed to provide supplemental price lists for items not on the general lists. The settlements prohibit the funeral homes from future violations of the Rule and require them to pay civil penalties, as follows: Family Memorial, $1,500; Glenwood, $16,500; Gregory, $1,000; Robbins, $1,000; Stricklin-King, $10,500; W.H. Jefferson, $1,000; Williams, $1,000.
Firstlight Entertainment, Inc.; Michael Peters
The Commission announced a settlement with Firstlight Entertainment and corporate officer Michael Peters in connection with allegations that they violated the Franchise Rule. The company markets display rack distributorships for "collectable" comic books. The Commission alleged that the company failed to give prospective purchasers basic disclosure and earnings documentation, as required by the Rule. The settlement requires the defendants to pay a $10,000 civil penalty and to comply with the Rule in the future and prohibits them from making false or misleading statements when offering any franchise or business opportunity.
G & L Financial Services, Inc. (d/b/a Goldman & Levine)
The Commission approved a consent agreement settling allegations that G & L Financial, doing business as Goldman & Levine, violated the Fair Debt Collection Practices Act (FDCPA). According to the Commission, Goldman & Levine violated the Act by disclosing consumers' debts to third parties, falsely stating or implying that courts or law enforcement authorities had been contacted about the debts, and using abusive language when talking to consumers, among other things. Under the terms of the agreement, the defendant must pay a $10,000 civil penalty and is permanently enjoined from future violations of the FDCPA.
Glass Funeral Home, Inc.; James L. Glass, Sr.;
M.H.I. Group, Inc.; Funeral Services Acquisition Group, Inc.; Douglas I. Kinzer;
Mark Curry's Funeral Home, Inc.; Mark III Funeral Home, Inc.; Mark W. Curry, III;
Thomas Aikens, Inc.; Thomas Aikens; Yvonne J. Aikens
Four funeral home operators in Florida agreed to pay civil penalties to settle allegations that they violated the Funeral Rule by failing to give customers the required price list of funeral goods and services. Some of the defendants also failed to provide supplemental price lists and failed to disclose information that would help consumers decide whether they needed to purchase certain items. The companies and corporate officers agreed to comply with the Rule in the future and to pay the following penalties: Glass Funeral Home and its president, $4,000; M.H.I. Group, Funeral Services Acquisition, and Kinzer, an officer of both companies, $35,000; Mark Curry's, Mark III, and officer Curry, $11,000; Thomas Aikens, Inc., and its corporate officers, $9,000.
Global Gumballs, Inc.; Michelle Smith; Tim McCarty
The Commission settled with Global Gumballs and its officers in connection with allegations that they violated the Franchise Rule in the sale of gumball vending machine routes. The Commission alleged that the defendants failed to provide critical pre-purchase information to potential buyers and made exaggerated earnings claims. The consent order prohibits the defendants from violating the Rule and from making false statements or misrepresenting material aspects of any business venture they offer. In addition, they are required to pay a $50,000 civil penalty.
Hasbro, Inc.
Hasbro, a toy company, agreed to pay a $280,000 civil penalty to settle allegations that it engaged in deceptive advertising in violation of a 1993 consent order. The Commission alleged that a recent Hasbro commercial for its Colorblaster paint sprayer toy appeared to show that children could operate the toy with very little effort when, in fact, a motorized air compressor was used during filming of the commercial to provide the necessary pressure. The consent decree prohibits the firm from using deceptive demonstrations or otherwise misrepresenting the performance of any toy.
Island Automated Medical Services, Inc. (d/b/a Diversified Data Services, Med Star USA, and Star Funding Group); John Travlos
Island Automated Medical Services and its officer have agreed to pay a $40,000 civil penalty to settle allegations that they failed to give potential investors presale disclosures about the business opportunity they sold and documentation to support claimed earnings, as required by the Franchise Rule. The defendants sold medical claims-processing franchises. The settlement requires the defendants to comply with all aspects of the Franchise Rule and prohibits them from making false statements or misrepresenting material aspects of any franchise or business they offer.
J.C. Pro Wear, Inc.; James L. O'Laughlin
J.C. Pro Wear and its principal officer agreed to settle allegations of falsely claiming to be in compliance with the Franchise Rule and with violating the Rule, in part, by failing to provide prospective franchisees with required disclosure documents. The company offers franchises for retail outlets that sell sports apparel in leased space in Montgomery Ward stores. The settlement prohibits the defendants from making similar misrepresentations and from violating the Rule in the future and requires them to pay a civil penalty of $65,000.
Laura Ashley, Inc.
Laura Ashley, an importer and retailer of children's and women's ready-to-wear clothes, agreed to pay a $60,000 civil penalty to settle allegations that it violated the Care Labeling Rule, which requires that clothing be labeled with written instructions for proper cleaning and care. According to the Commission, Laura Ashley used symbols rather than written instructions, in violation of the current Rule. Under the agreement, the company will pay the civil penalty and will be barred from future violations of the Rule.
Lewis & Ribbs Mortuary, Inc.; Lorenzo J. Lewis
Lewis & Ribbs Mortuary and its owner agreed to pay a $20,000 civil penalty to settle allegations that they failed to give consumers general price lists and statements itemizing their purchases in the form required by the Funeral Rule. Under the terms of the settlement, in addition to paying the civil penalty, the defendants must comply with the Rule in the future.
Li'l Snacks, Inc.; Cornelius (Eugene) Hartley; Nava Jo Hartley
The Commission reached a settlement with L'il Snacks and two individuals in connection with allegations that they violated the Franchise Rule. The Commission alleged that the defendants, who offered business opportunities involving snack-food vending machine routes, failed to give potential buyers detailed upfront disclosures and documentation, as required by the Rule. The settlement requires the defendants to pay a $20,000 civil penalty and prohibits them from violating the Rule in the future.
Modern Management Systems, Inc. (d/b/a Nationwide Vending); Margaret Reed Small
The Commission settled with Modern Management Systems and its president in connection with alleged violations of the Franchise Rule in their sale of countertop snack-vending machines. The Commission alleged that the defendants failed to provide critical pre-purchase information to potential buyers and made exaggerated earnings claims. The consent decree prohibits the defendants from violating the Rule and from making false statements or misrepresenting material aspects of any business venture they offer. In addition, Modern Management Systems agreed to pay a $7,000 civil penalty.
National Tech Systems, Inc.; Mel Parsell
National Tech Systems and its president agreed to pay a $10,000 civil penalty to settle allegations that they failed to give potential investors presale disclosures about the business opportunities they sold and documentation to support claimed earnings, as required by the Franchise Rule. The company sold display rack business opportunities for "Crime Alert" personal protection products, claiming that investors could earn up to $80,000 a year. Under the provisions of the settlement, the defendants are prohibited from violating the Rule and from making false statements or misrepresenting material aspects of any business venture they offer.
Nibblers, Inc.; Thomas Kiernan
Nibblers and its president agreed to pay a $10,000 civil penalty, as well as to properly and accurately disclose key information to future investors in any franchise or business opportunity they offer. These provisions were included in a settlement of allegations that the defendants, who offer business opportunities involving candy vending machines, failed to provide potential investors with information required by the Franchise Rule.
Quartercall Communications, Inc.; Fitzgerald Lewis
The president of Quartercall agreed to pay a $10,000 civil penalty to settle allegations that he and his company failed to provide key information to potential investors in their pay telephone business opportunity, as required by the Franchise Rule. The consent decree requires the defendants to comply fully with the provisions of the Rule and prohibits them from making unsubstantiated earnings claims or misrepresenting any other material aspects of a franchise or business opportunity.
Restland Funeral Home, Inc.; Bluebonnet Hills Funeral Home, Inc.;
Laurel Land Funeral Home, Inc.; Laurel Land Funeral Home of Fort Worth, Inc.; Singing Hills Funeral Home, Inc.
Restland and four of its subsidiary funeral homes agreed to pay a $121,600 civil penalty to settle allegations that they failed to provide customers with itemized general price lists and other information required by the Funeral Rule. In addition to paying the civil penalty, the largest ever imposed under the Funeral Rule, the defendants agreed to send itemized statements to customers who purchased pre-need plans between 1987 and 1989, to participate in a training program administered by the National Funeral Directors Association (NFDA), and to submit their price lists and other forms to NFDA for review.
STP Corporation; First Brands Corporation
STP and its parent corporation, First Brands, agreed to settle allegations that they violated a 1976 Commission order under which they are prohibited from making false and unsubstantiated claims for motor oil additives. According to the Commission, the defendants made numerous false claims in advertisements regarding the engine-protection qualities of their oil additive, STP Engine Treatment with XEP2. The settlement requires the defendants to pay a civil penalty of $888,000 for the order violation.
Summit Communications, Inc.; Mitchell R. Newman
The Commission settled with Summit Communications and its president in connection with allegations that they had violated the Franchise Rule in their sale of pay telephone vending franchises. The Commission alleged that the defendants failed to provide critical pre-purchase information to potential buyers and made exaggerated earnings claims. The consent decree prohibits the defendants from violating the Rule and from making false statements or misrepresenting material aspects of any business venture they offer. In addition, Summit Communications agreed to pay a $10,000 civil penalty.
Tanzara International, Inc.
Tanzara, an importer of women's sportswear, agreed to pay a $10,000 civil penalty to settle allegations that it put improper care labels on some of its rayon garments. The Commission alleged that the care procedure that was recommended on the labels resulted in significant shrinkage. As part of the settlement, Tanzara agreed to provide proper care instructions on its labels in the future, in compliance with the Care Labeling Rule.
Telebrands Corporation; Ajit Khubani
Telebrands and its owner reached a settlement with the Commission resolving allegations that they violated the Mail/Telephone Order Merchandise Rule in selling various products through print and broadcast advertising. The Commission alleged that the defendants failed to provide consumers with appropriate and timely notification of delays in shipping orders, to obtain customers' consent to delays, and to cancel delayed orders and provide refunds. The settlement requires the defendants to pay a $95,000 civil penalty and prohibits future Rule violations.
Tutor Time Child Care Systems, Inc.; Florida Academic Enterprises, Inc.;
Lifecare Investments, Inc.; Michael Weissman; Richard Weissman
Tutor Time, a nationwide franchisor of day care centers, agreed to pay a $220,000 civil penalty to settle allegations that it had overstated the earnings potential of franchise owners, the length of time it takes to open a center, and other important factors about owning a Tutor Time franchise. The Commission also charged Tutor Time with failing to give potential franchisees certain key pre-purchase information about the franchise required by the Franchise Rule. In addition to requiring the civil penalty, the order prohibits the defendants from making similar misrepresentations, requires them to comply with the Rule, and bars them from imposing gag orders that prohibit their former franchisees from talking about their experiences with the company.
United Creditors Alliance Corporation
United Creditors, a nationwide debt collection agency, agreed to pay a $146,000 civil penalty in settlement of allegations that it repeatedly violated the Fair Debt Collections Practices Act (FDCPA). The Commission alleged that United Creditors, in attempting to collect debts, made telephone calls after hours, used abusive language, falsely threatened consumers with legal action, and engaged in a variety of other FDCPA violations. The settlement prohibits the company from future violations of the FDCPA as well as requiring payment of the civil penalty.
W.W. Chambers Co., Inc.; Thomas S. Chambers; William W. Chambers;
William W. Chambers, III
W.W. Chambers, a funeral home, and its principals paid a $10,000 civil penalty to settle allegations that they failed to provide consumers with written itemized price lists and other information, in violation of the Funeral Rule. Under the terms of the settlement, the defendants must comply with the Rule in the future.