| VIRGINIA A. DAVIDSON Federal Trade Commission Cleveland Regional Office 1111 Superior Avenue East, Suite 200 Cleveland, Ohio 44114 (216) 263-3404 VD-4473 UNITED STATES DISTRICT COURT FEDERAL TRADE COMMISSION vs SCREEN TEST U.S.A., INC., a New Jersey corporation Hon. Plaintiff, the Federal Trade Commission ("FTC"), for its Complaint alleges as follows: 1. The FTC brings this action under Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, to secure a permanent injunction, preliminary injunctive relief, rescission of contracts, restitution, disgorgement and other equitable relief for defendants' violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a) and the Commission's Trade Regulation Rule Concerning Cooling-Off Period for Sales Made At Homes Or At Certain Other Locations, 16 C.F.R. Part 429 (the "Cooling-Off Rule"), in connection with the sale of modeling or acting introduction kits, including photography and related goods and services. JURISDICTION AND VENUE 2. This Court has jurisdiction of this matter pursuant to 15 U.S.C. §§ 45(a), 53(b) and 57b and 28 U.S.C. §§ 1331, 1337(a) and 1345. 3. Venue in the District of New Jersey is proper under 15 U.S.C. § 53(b) and 28 U.S.C. §§ 1391(b) and (c). PLAINTIFF 4. Plaintiff FTC is an independent agency of the United States government created by statute. 15 U.S.C. §§ 41-58. The Commission enforces Section 5(a) of the FTC Act, 15 U.S.C. 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission also enforces the Cooling-Off Rule, 16 C.F.R. Part 429. The Rule prohibits unfair and deceptive acts or practices in connection with door-to-door sales, i.e., sales in which the buyer's agreement or offer to purchase is made at a place other than the seller's place of business, for example, at a hotel. The Commission may initiate federal district court proceedings to enjoin violations of the FTC Act and the Cooling-Off Rule and to secure such equitable relief as may be appropriate in each case, including restitution for injured consumers. 15 U.S.C. §§ 53(b), 57b. DEFENDANTS 5. Defendant Screen Test U.S.A., Inc. is a New Jersey corporation with its principal place of business at 1680 Route 23 North, Suite 100, Wayne, New Jersey 07470. It transacts business in this district. 6. Defendant Fred Vanore is the founder, franchisor and national director of the common enterprise known as Screen Test U.S.A. (herein "Screen Test U.S.A."). He is the owner, director and officer of Defendant Screen Test U.S.A., Inc. He is the incorporator and trustee and, upon information and belief, principal member of Defendant American Child Actor and Modeling Association, Inc. He owns the New Jersey registered fictitious business name Screen Test, whose address, 15 Gorge Way, Wayne, New Jersey 07470, also is his residential address. He also does business as Vanore Productions, 1680 Route 23 North, Suite 100, Wayne, New Jersey 07470. He owns the Internet domain names "acama.com," "worldwidecasting.com" and "showbizcentral.com." Individually or in concert with others, he has formulated, directed, controlled and/or participated in the acts and practices complained of below. He resides and transacts business in this district. 7. Defendant American Child Actor and Modeling Association, Inc. ("ACAMA") is a New Jersey corporation registered as not for profit. Its principal place of business is 1680 Route 23 North, Suite 100, Wayne, New Jersey 07470. Defendant Fred Vanore is its incorporator, trustee and, on information and belief, its principal member. It transacts business in this district. 8. Defendant Premier Marketing, Inc. is a New Jersey corporation doing business as Screen Test U.S.A. Its registered office is 17 The Fellsway, Ocean, New Jersey 07712. Its principal place of business is 1700 Galloping Hill Road, Kenilworth, New Jersey 07033. Upon information and belief, it is a Screen Test U.S.A. franchise office. It transacts business in this district. 9. Defendant Alice B. McManus is an owner, director and principal officer of Defendant Premier Marketing, Inc., d/b/a Screen Test U.S.A. She is regional director of the Screen Test U.S.A. office in Kenilworth, New Jersey. Her last known residential address is 17 The Fellsway, Ocean, New Jersey 07712. Individually or in concert with others, she has formulated, directed, controlled and/or participated in the acts and practices complained of below. She resides and transacts business in this district. 10. Defendant R. J. Ims Corp. is a New Jersey corporation doing business under the Pennsylvania registered fictitious name Screen Test U.S.A. It has done business under the Pennsylvania registered fictitious name Show Biz Central. Its registered office is 2008 Skip Morgan Drive, Hammonton, New Jersey 08037. Its original principal place of business was Voorhees, New Jersey. Its current principal place of business is 130 Presidential Boulevard, Bala Cynwyd, Pennsylvania 19004. Upon information and belief, it is a Screen Test U.S.A. franchise office. It transacts business in this district. 11. Defendant Richard J. Ims, Jr. is an owner, director and officer of Defendant R. J. Ims Corporation. He owns the Pennsylvania registered fictitious name Screen Test U.S.A., which in turn owns the Internet domain name "screentestusa.com." His last known residential address is 17 Mercer Drive, Sicklerville, New Jersey 08081. Individually or in concert with others, he has formulated, directed, controlled and/or participated in the acts and practices complained of below. He resides and transacts business in this district. 12. Defendant Premier Marketing, Inc. is a Connecticut corporation doing business as Screen Test U.S.A. It formerly did business as Show Biz Central. Its registered office and principal place of business is 700 West Johnson Avenue, Cheshire, Connecticut 06410. An entity at that address, "Show Biz Kids," owns the Internet domain name "showbizkids.com," which links Internet users to web sites for Screen Test U.S.A., ACAMA and World Wide Casting. In addition to its Screen Test U.S.A. office in Cheshire, Connecticut, it operates a Screen Test U.S.A. office at 240 West 35th Street, Suite 504, New York, New York, and has operated Screen Test U.S.A. franchise offices elsewhere in the State of New York. It transacts business in this district. 13. Defendant Showbiz Central of Westchester, Inc., is a Connecticut corporation doing business as Screen Test U.S.A. It formerly did business as Show Biz Central. Its registered office and principal place of business is 700 West Johnson Avenue, Cheshire, Connecticut 06410. An entity at that address, "Show Biz Kids," owns the Internet domain name "showbizkids.com," which links Internet users to web sites for Screen Test U.S.A., ACAMA and World Wide Casting. In addition to its Screen Test U.S.A. office in Cheshire, Connecticut, it operates a Screen Test U.S.A. office at 240 West 35th Street, Suite 504, New York, New York, and has operated Screen Test U.S.A. franchise offices elsewhere in the State of New York. It transacts business in this district. 14. Defendant John T. Yannielli is an owner, director and officer of Defendants Show Biz Central of Westchester, Inc., and the Connecticut corporation Premier Marketing, Inc. He is the national director of operations for Screen Test U.S.A. His last known residential address is 39 Cross Road, Middlebury, Connecticut 06762. Individually or in concert with others, he has formulated, directed, controlled and/or participated in the acts and practices complained of below. He transacts business in this district. 15. Defendant Tomorrow's Stars, Inc. is a Florida corporation that does or has done business as Screen Test U.S.A. Its former name is Show Biz Central of Southern Florida, Inc. It owns the Florida registered fictitious business names Screen Test U.S.A. and Tomorrow's Stars. Its original mailing address and principal place of business was 11 McDermott Circle, P.O. Box 5412, Hamden, Connecticut 06518. Its current principal place of business is 5301 North Federal Highway, Suite 180, Boca Raton, Florida 33487. It is or has been a Screen Test U.S.A. franchise office. It transacts or, at times material to this complaint, has transacted business in this district. 16. Defendant Edward J. Bauer is an owner, director, officer and registered agent of Defendant Tomorrow's Stars, Inc. He is or has been regional director of the Screen Test U.S.A. franchise office in Boca Raton, Florida. His last known residential address is 16729 Cordova Court, Delray Beach, Florida 33444. Individually or in concert with others, he has formulated, directed, controlled and/or participated in the acts or practices complained of below. He transacts or, at times material to this complaint, has transacted business in this district. 17. Defendant Helen J. Bauer is an owner, director and officer of Defendant Tomorrow's Stars, Inc. Her last known residential address is 16729 Cordova Court, Delray Beach, Florida 33444. Individually or in concert with others, she has formulated, directed, controlled and/or participated in the acts or practices complained of below. She transacts or, at times material to this complaint, has transacted business in this district. DEFENDANTS' COURSE OF CONDUCT 18. Defendants have promoted themselves via television, radio, newspaper, direct mail and the World Wide Web as Screen Test U.S.A., a single national company founded by Fred Vanore in 1992 consisting of franchise offices along the east coast of the United States. Screen Test U.S.A. advertises that it seeks children to appear in TV commercials and magazines. In a common Internet home page, literature, office displays and sales pitches, defendants tell consumers that Screen Test U.S.A. has created more stars than any other company and that its clients appear in national advertising campaigns. As used in this pleading, the word "consumer" includes a child who is a prospective client of defendants and an adult who decides whether to purchase goods or services from defendants on behalf of the child, typically a parent. 19. Consumers respond to defendants' ads by calling telephone numbers listed in the ads. Defendants tell those consumers that for a prepaid fee, typically $45, they will receive an objective, selective evaluation, called a "screen test. " Defendants claim the screen test is conducted by a "talent director" with the professional experience to determine whether a child will obtain paid work as an actor or model, and that only select children pass the screen test. In fact, the screen test is a marketing ploy to induce the purchase of as many agency introduction programs as possible. 20. Defendants' screen test consists of a one-to-ten minute session before a video camera, conducted at defendants' offices or at temporary locations such as hotels. Before the test, defendants encourage or require the consumer to buy a copy of the test for an additional $15 or $20, but typically do not disclose further fees. 21. After the screen test but during the initial visit, the child and parent meet with defendants' talent director. The talent director claims many years of professional experience in talent evaluation. The talent director typically fills out a form, printed on letterhead of the American Child Actor and Modeling Association, showing that the child passed the screen test and can begin to earn money right away. In fact, defendants' talent directors typically have no professional experience or basis for talent evaluation. Substantially all consumers pass defendants' screen tests. 22. During the initial visit, defendants pressure the family to spend a heretofore undisclosed sum, typically from $495 to $795, for an "agency introduction program." Defendants claim the program includes (a) the type of photographs a child needs or that are most likely to interest agents or casting directors and (b) ongoing or lifetime agency representation or help finding agency representation. In fact, photographs of the type defendants sell are not necessary, or the most likely, to interest professional agents or casting directors. Defendants initiate no further contact with the consumer other than to collect any unpaid balance. 23. During the initial visit, defendants' talent directors claim that consumers who buy and complete defendants' program have a high rate of success or are likely to obtain agency representation or acting or modeling jobs. In some instances, defendants guarantee at least one agency will offer to represent the child. In fact, consumers who buy defendants' agency programs do not have a high rate of success and are not likely to obtain agency representation or acting or modeling jobs as the result of defendants' program. 24. To lend an aura of legitimacy to their activities, defendants have told consumers they are members of the American Child Actor and Modeling Association ("ACAMA"). Defendants have claimed that the ACAMA is an independent, objective, charitable, educational organization formed to protect consumers from unethical business practices in the performing arts, and that the ACAMA has recognized and endorsed Screen Test U.S.A. Defendants have encouraged consumers to check out Screen Test U.S.A.'s reputation by contacting the ACAMA or have told consumers to do business only with ACAMA-endorsed companies. Consumers who telephone the ACAMA or visit its Internet web site, "http://www.acama.com," reasonably believe they are dealing with an organization independent of Screen Test U.S.A. In fact, the ACAMA is not an objective, charitable organization, and is not independent of defendants. Defendant Fred Vanore formed ACAMA. ACAMA shares an address and telephone number with Defendant Screen Test U.S.A., Inc. Defendant Vanore owns ACAMA's web site. 25. About two weeks after consumers buy defendants' agency introduction program, they receive (1) 100 color portrait-type photos of the child, (2) envelopes and address labels; and (3) a list of model or talent agent addresses. When consumers complain to defendants and demand refunds, defendants refuse. Defendants claim consumers waive the right to a refunds when they sign invoices and receipts that state defendants have fully explained the program, consumers understand the program, and consumers agree that no refunds are available. In fact, defendants do not fully explain their program, consumers do not understand the program, and consumers do not waive the right to a refund by virtue of signing defendants' receipts. 26. The acts and practices of defendants as alleged herein are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. DEFENDANTS' DECEPTIVE ACTS OR PRACTICES IN VIOLATION OF SECTION 5 OF THE FTC ACT COUNT ONE 27. Defendants represent, expressly or by implication, that their screen test is an experienced person's professional, objective, selective, reliable evaluation of whether a consumer will obtain work as an actor or model. 28. In fact, defendants' screen test is not an experienced person's professional, objective, selective, reliable evaluation of whether a consumer will obtain work as an actor or model. 29. Therefore, defendants' material representations, as set forth in Paragraph 27 above, are false and deceptive in violation of Section 5(a) of the FTC Act. COUNT TWO 30. Defendants represent, expressly or by implication, that the photographs they sell are the type necessary or the most likely to secure agency representation or modeling or acting jobs. 31. In fact, the type of photographs defendants sell are not necessary or the most likely to secure agency representation or modeling or acting jobs. 32. Therefore, defendants' material representations, as set forth in Paragraph 30 above, are false and deceptive in violation of Section 5(a) of the FTC Act. COUNT THREE 33. Defendants represent, expressly or by implication, that consumers have a high rate of success in obtaining, or are likely to obtain, agency representation or modeling or acting jobs as the result of buying and completing defendants' agency introduction programs. 34. In fact, consumers do not have a high rate of success in obtaining, or are not likely to obtain, agency representation and modeling jobs as the result of buying and completing defendants' agency introduction programs 35. Therefore, defendants' material misrepresentations, as set forth in Paragraph 33 above, are false and deceptive in violation of Section 5(a) of the FTC Act. COUNT FOUR 36. Defendants have represented, expressly or by implication, that ACAMA is an objective, independent, educational, charitable consumer protection organization and that as such, ACAMA has endorsed and approved Screen Test U.S.A. and its screen test procedure. 37. In fact, ACAMA is not an objective, independent, educational, charitable consumer protection organization and has not, as such, endorsed and approved Screen Test U.S.A. and its screen test procedure. 38. Therefore, defendants' material representations, as set forth in Paragraph 36 above, are false and deceptive in violation of Section 5(a) of the FTC Act. DEFENDANTS' ACTS OR PRACTICES IN VIOLATION OF THE FTC'S COOLING OFF RULE 39. The Cooling-Off Rule, 16 C.F.R. Part 429, was promulgated by the Commission pursuant to Section 6(g) of the FTC Act, 15 U.S.C. § 45(g). It became effective in its entirety on June 7, 1974, and since that date has remained in full force and effect. The Commission amended the Cooling-Off Rule on October 20, 1995 under Section 18 of the FTC Act, 15 U.S.C. § 57a, and the amendments became effective on December 19, 1995. 40. The Cooling-Off Rule declares unfair and deceptive certain acts or practices in connection with any "door-to-door sale." 16 C.F.R. § 429.1. The Rule defines a door-to-door sale, inter alia, as a sale with a purchase price of $25 or more, conducted at a place other than the seller's permanent place of business, such as hotel space rented on a short-term basis. 16 C.F.R. § 429.(0)(a). 41. Defendants are sellers of consumer goods or services and have engaged in door-to-door sales as defined under the Rule, 16 C.F.R. § 429.0 (a), (b), (c). 42. Pursuant to Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of the Cooling-Off Rule is an unfair or deceptive act or practice in or affecting commerce in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a)(1). 43. By engaging in the Cooling-Off Rule violations set forth below in Counts Five through Twelve, defendants have violated Section 5(a) of the FTC Act, 15 U.S.C. § 45(a)(1). COUNT FIVE 44. In numerous instances in connection with door-to-door sales, defendants fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to the sale at the time of its execution which shows, in immediate proximity to the space reserved for the signature of the buyer or on the front page of the receipt if a contract is not used, in bold face type of a minimum size of 10 points, a statement in substantially the following form as required by 16 C.F.R. § 429.1(a): You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right. COUNT SIX 45. In numerous instances in connection with door-to-door sales, defendants have failed to furnish to each buyer, at the time of the purchase, a completed form in duplicate, captioned either "NOTICE OF RIGHT TO CANCEL" or "NOTICE OF CANCELLATION" containing in ten point bold face the following information required by 16 C.F.R. § 429.1(b): NOTICE OF CANCELLATION [date of transaction] You may CANCEL this transaction, without any Penalty or Obligation, within THREE BUSINESS DAYS from the above date. If you cancel, any property traded in, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within TEN BUSINESS DAYS following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled. If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale, or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller's expense and risk. If you do make the goods available to the seller and the seller does not pick them up within 20 days of the date of your Notice of Cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract. To cancel this transaction, mail or deliver a signed and dated copy of this Cancellation Notice or any other written notice, or send a telegram, to [Name of seller], at [address of seller's place of business] NOT LATER THAN MIDNIGHT OF [date]. I HEREBY CANCEL THIS TRANSACTION. (Date) (Buyer's signature) COUNT SEVEN 46. In numerous instances in connection with door-to-door sales, defendants fail, before furnishing copies of the "Notice of Cancellation" to the buyer, to complete both copies by entering the name of the seller, the address of the seller's place of business, the date of the transaction, and the date, not earlier than the third business day following the date of the transaction, by which the buyer may give notice of cancellation, as required by 16 C.F.R. § 429.1(c). COUNT EIGHT 47. In numerous instances in connection with door-to-door sales, defendants include in their contract or receipt waivers of rights to which the buyer is entitled under the Cooling-Off Rule, including specifically the buyer's right to cancel the sale, as prohibited by 16 C.F.R § 429.1(d). COUNT NINE 48. In numerous instances in connection with door-to-door sales, defendants fail to inform each buyer orally, at the time the buyer signs the contract or purchases the goods or services, of the buyer's right to cancel, as required by 16 C.F.R. § 429.1(e). COUNT TEN 49. In numerous instances in connection with door-to-door sales, defendants misrepresent the buyer's right to cancel as prohibited by 16 C.F.R. § 429.1(f). COUNT ELEVEN 50. In numerous instances in connection with door-to-door sales, defendants fail or refuse to honor a valid notice of cancellation by buyer and to refund all payments made under the sale within 10 business days after the receipt of such notice, as required by 16 C.F.R. § 429.1(g)(i). COUNT TWELVE 51. In numerous instances in connection with door-to-door sales, defendants fail within 10 business days of receipt of the buyer's notice of cancellation to notify the buyer whether the seller intends to repossess or to abandon any shipped or delivered goods, as required by 16 C.F.R. § 429.1(i). COMMON ENTERPRISE 52. Defendants have operated a common business enterprise while engaging in the deceptive acts and practices alleged above and are therefore jointly and severally liable for said acts and practices. CONSUMER INJURY 53. Consumers in many areas of the United States have suffered substantial monetary loss as a result of defendants' unlawful acts or practices. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers and to harm the public interest. THIS COURT'S POWER TO GRANT RELIEF 54. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers the Court to grant preliminary and permanent injunctive and other ancillary relief, including consumer redress, disgorgement and restitution, to prevent and remedy violations of any provision of law enforced by the FTC. 55. Section 19 of the FTC Act, 15 U.S.C. § 57b, authorizes this Court to award such relief as is necessary to redress the injury to consumers or others resulting from defendants' violations of the Cooling-Off Rule. 56. The Court, in the exercise of its equitable jurisdiction, may award other ancillary relief to remedy injury caused by defendants' violations of law. PRAYER FOR RELIEF Wherefore, plaintiff requests that this Court, as authorized by 15 U.S.C. §§ 53(b) and 57b, and pursuant to its own equitable powers:
DATE: . 1999 DEBRA A. VALENTINE General Counsel VIRGINIA A. DAVIDSON Attorneys for Plaintiff |