[Federal Register Volume 62, Number 12 (Friday, January 17, 1997)]
[Notices]
[Pages 2671-2672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1238]
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FEDERAL TRADE COMMISSION
[File No. 942-3311]
Jeanette L. Douglass; Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair or deceptive acts or practices and unfair methods of
competition, this consent agreement, accepted subject to final
Commission approval, would prohibit, among other things, Douglass, an
officer of Computer Business Services, Inc. (CBSI), from
misrepresenting the earnings or success rate of CBSI investors, the
existence of a market for CBSI's products or services, and the amount
of time it would take investors to recoup their investments. The order
also bars Douglass from making any representation about the
performance, benefits, efficacy, or success rate of any product or
service unless she possesses reliable evidence to substantiate the
claims. The agreement settles allegations that potential earnings and
profit claims made by CBSI were false and misleading.
DATES: Comments must be received on or before March 18, 1997.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT:
C. Steven Baker, Federal Trade Commission, Chicago Regional Office, 55
East Monroe Street, Suite 1860, Chicago, IL 60603. (312) 353-8156.
Catherine R. Fuller, Federal Trade Commission, Chicago Regional
Office, 55 East Monroe Street, Suite 1860, Chicago, IL 60603. (312)
353-5576.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Sec. 2.34 of the
Commission's rules of practice (16 CFR 2.34), notice is hereby given
that the above-captioned consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the accompanying complaint. An electronic copy of the
full text of the consent agreement package can be obtained from the
Commission Actions section of the FTC Home Page (for December 12,
1996), on the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.''
A paper copy can be obtained from the FTC Public Reference Room, Room
H-130, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C.
20580, either in person or by calling (202) 326-3627. Public comment is
invited. Such comments or views will be considered by the Commission
and will be available for inspection and copying at its principal
office in accordance with Sec. 4.9(b)(6)(ii) of the Commission's rules
of practice (16 CFR 4.9(b)(6)(ii)).
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted an agreement, subject to
final approval, to a proposed consent order from respondent Jeanette L.
Douglass.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement and take other appropriate action or make
final the agreement's proposed order.
This matter concerns earnings and success claims made regarding
business ventures promoted by respondent. The Commission's complaint
charges that respondent, in concert with Computer Business Services,
Inc. (``CBSI''), made false and unsubstantiated claims that consumers
who purchase or use CBSI's business ventures ordinarily succeed and
earn substantial income. In fact, the complaint alleges, the vast
majority of consumers never even recoup their initial investment. The
complaint also alleges that respondent falsely represented that
endorsements appearing in CBSI's advertisements reflect the actual
experiences of its customers and that those endorsements reflect the
typical or ordinary experience of purchasers of CBSI's business
ventures. Further, the complaint alleges that respondent represented
that consumers can successfully utilize automatic telephone dialing
systems to market their businesses but failed to disclose that federal
law prohibits the use of such systems in the unattended mode to
initiate a call to any residential telephone line in certain
circumstances.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent the respondent from engaging in
similar acts and practices in the future. The proposed order extends to
all business ventures and to all products or services that are part of
any business venture.
Part I of the proposed consent order prohibits the respondent from
misrepresenting the earnings or success of its purchasers, the
existence of a market for the products or services promoted by
respondent, or the amount of time within which a prospective purchaser
can reasonably expect to recoup his or her investment. Part II of the
proposed order prohibits the respondent from misrepresenting the
performance, benefits, efficacy or success rate of any product or
service that is a part of such business venture, unless at the time
such representation is made the respondent possesses and relies upon
competent and reliable evidence that substantiates the representation.
Part III of the proposed order prohibits the respondent from
misrepresenting that a user testimonial or endorsement is typical or
ordinary and from using, publishing or referring to any user
testimonial or endorsement unless respondent has good reason to believe
that at the time of such use, publication or reference, the person or
[[Page 2672]]
organization named subscribes to the facts and opinions stated therein.
Part IV of the proposed order requires respondent to disclose, in close
proximity to any representation regarding the use or potential use of
an automatic telephone dialing system, that federal law prohibits the
use of an automatic telephone dialing system to initiate a telephone
call to any residential telephone line using an artificial or
prerecorded voice to transmit an unsolicited advertisement for
commercial purposes without the prior express consent of the called
party unless a live operator introduces the message.
The remaining parts of the proposed consent order require the
respondent to maintain materials relied upon to substantiate claims
covered by the order, to distribute copies of the order to each of its
operating divisions and to certain company officials, to notify the
Commission of any changes in corporate structure that might affect
compliance with the Order, and to file one or more compliance reports.
The purpose of this analysis is to facilitate public comment on the
proposed consent order. It is not intended to constitute an official
interpretation of the agreement and proposed order or to modify in any
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 97-1238 Filed 1-16-97; 8:45 am]
BILLING CODE 6750-01-M
