[Federal Register Volume 61, Number 63 (Monday, April 1, 1996)]
[Notices]
[Pages 14322-14324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7865]
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FEDERAL TRADE COMMISSION
[File No. 952-3431]
Sherman G. Smith d/b/a Starr Communications; Consent Agreement
With Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Consent Agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit the Salt Lake City-based respondent from misrepresenting, in
his advertisements for a work-at-home business, the income, earnings,
or sales from any business opportunity and would prohibit any claims
about past, present, or future earnings unless, at the time of making
the representation, it possesses and relies upon competent and reliable
evidence that substantiates the claim. The consent agreement settles
allegations stemming from advertisements on the Internet for Smith/
Starr's ``U.S. Government Tracer Business Program'' business
opportunity.
DATES: Comments must be received on or before May 31, 1996.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
C. Steve Baker, Chicago Regional Office, Federal Trade Commission,
Suite 1860, 55 East Monroe Street, Chicago, IL 60603. 312-353-8156.
David Medine, Federal Trade Commission, S-4429, 6th and Pennsylvania
Ave, NW, Washington, DC 20580, 202-326-3224.
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 following 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. 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)).
Agreement Containing Consent Order To Cease and Desist
In the Matter of: Sherman G. Smith, individually and doing
business as Starr Communications.
[File No. 952-3431]
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Sherman G. Smith, individually and doing
business as Starr Communications (hereinafter referred to as ``proposed
respondent''), and it now appearing that proposed respondent is willing
to enter into an agreement containing an order to cease and desist from
the acts and practices being investigated,
It is hereby agreed by and between Sherman G. Smith, individually
and doing business as Starr Communications, his attorney, and counsel
for the Federal Trade Commission that:
1. Proposed respondent Sherman G. Smith is an individual doing
business as Starr Communications with his principal office or place of
business at 78 West Broadway, No. 2007 North, Salt Lake City, Utah
84101.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint.
3. Proposed respondent waives:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
(d) All claims under the Equal Access to Justice Act.
4. This agreement shall not become a part of the public record of
the
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proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission, it, together with the draft of
the complaint contemplated hereby, will be placed on the public record
for a period of sixty (60) days and information in respect thereto
publicly released. The Commission thereafter may either withdraw its
acceptance of this agreement and so notify proposed respondent, in
which event it will take such action as it may consider appropriate, or
issue and serve its complaint (in such form as the circumstances may
require) and decision, in disposition of the proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the attached draft complaint or that the facts
as alleged in the attached draft complaint, other than the
jurisdictional facts, are true.
6. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
Rules, the Commission may, without further notice to proposed
respondent, (1) issue its complaint corresponding in form and substance
with the draft of complaint here attached and its decision containing
the following order to cease and desist in disposition of the
proceeding, and (2) make information public in respect thereto. When so
entered, the order to cease and desist shall have the same force and
effect and may be altered, modified or set aside in the same manner and
within the same time provided by statue for other orders. The order
shall become final upon service. Delivery by the U.S. Postal Service of
the decision containing the agreed-to order to proposed respondent's
address as stated in this agreement shall constitute service. Proposed
respondent waives any right he might have to any other manner of
service. The complaint may be used in construing the terms of the
order, and no agreement, understanding, representation, or
interpretation not contained in the order or in the agreement may be
used to vary or contradict the terms of the order.
7. Proposed respondent has read the complaint and the order
contemplated hereby. He understands that once the order has been
issued, he will be required to file one or more compliance reports
showing he has fully complied with the order. Proposed respondent
further understands that he may be liable for civil penalties in the
amount provided by law for each violation of the order after it becomes
final.
Order
I
It is ordered that respondent Sherman G. Smith, his agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
advertising, promotion, offering for sale, sale, or distribution of the
``U.S. Government Tracer Business Program,'' or any other business
opportunity, in or affecting commerce, as ``commerce'' is defined in
the Federal Trade Commission Act, do forthwith cease and desist from
misrepresenting, in any manner, the past, present, or future profits,
earnings, income, or sales from such business opportunity.
II
It is further ordered that respondent Sherman G. Smith, his agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
advertising, promotion, offering for sale, sale, or distribution of the
``U.S. Government Tracer Business Program,'' or any other business
opportunity, in or affecting commerce, as ``commerce'' is defined in
the Federal Trade Commission Act, do forthwith cease and desist from
representing, in any manner, in the past, present, or future profits,
earnings, income, or sales from such business opportunity, unless at
the time of making such representation respondent possesses and relies
upon competent and reliable evidence that substantiates the
representation.
III
It is further ordered that for five (5) years after the last date
of dissemination of any representation covered by this Order,
respondent, or his successors and assigns, shall maintain and upon
request make available to the Federal Trade Commission for inspection
and copying:
A. All materials that were relied upon in disseminating such
representation; and
B. All tests, reports, studies, surveys, demonstrations, or other
evidence in his possession or control that contradict, qualify, or call
into question such representation, or the basis relied upon for such
representation, including complaints from consumers.
IV
It is further ordered that respondent shall:
A. Within thirty (30) days from the effective date of this Order
deliver a copy of this Order to each of his officers, agents,
representatives, and employees who are engaged in the preparation or
placement of advertisements, promotional materials or other such sales
materials covered by this Order.
B. For a period of ten (10) years from the effective date of this
Order deliver a copy of this Order to each of his future officers,
agents, representatives, and employees who are engaged in the
preparation or placement of advertisements, promotional materials or
other such sales materials covered by this Order, within three (3) days
after the person assumes such position.
V
It is further ordered that from the date this Order becomes final,
respondent shall notify the Commission within thirty (30) days of the
discontinuance of his present business or employment and of each
affiliation with a new business or employment. Each notice of
affiliation with any new business or employment shall include his new
business address and telephone number, current home address, and a
statement describing the nature of the business or employment and the
duties and responsibilities.
VI
It is further ordered that within sixty (60) days after service of
this Order, and at such other times as the Commission may require,
respondents shall file with the Commission a report, in writing,
setting forth in detail the manner and form in which he has complied
with this Order.
VII
This Order will terminate twenty years from the date of its
issuance, or twenty years from the most recent date that the United
States or the Federal Trade Commission files a complaint (with or
without an accompanying consent decree) in federal court alleging any
violation of the Order, whichever comes later; provided, however, that
the filing of such a complaint will not affect the duration of:
A. Any paragraph in this Order that terminates in less than twenty
years;
B. This Order's application to any respondent that is not named as
a defendant in such complaint; and
C. This Order if such complaint is filed after the order has
terminated pursuant to this paragraph.
Provided further, that if such complaint is dismissed or a federal
court rules that the respondent did not violate any provision of the
Order, and
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the dismissal or ruling is either not appealed or upheld on appeal,
then the Order will terminate according to this paragraph as though the
complaint was never filed, except that the Order will not terminate
between the date such complaint is filed and the later of the deadline
for appealing such dismissal or ruling and the date such dismissal or
ruling is upheld on appeal.
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 Sherman G.
Smith, individually and doing business as Starr Communications.
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 claims made by the respondent in his
advertising, including advertising through the Internet, for his ``U.S.
Government Tracer Business Program.'' The Commission's complaint
charges that the respondent's advertising represents, directly or by
implication, that the amount of money represented in the advertisements
is representative, or typical, of what individuals who purchase
respondent's program will generally achieve. The claim is alleged to be
false and misleading, and in violation of section 5 of the Federal
Trade Commission Act, 15 U.S.C. 45, because the amount of money
represented in the advertisements is not representative, or typical, of
what individuals who purchase respondent's program will generally
achieve.
The Commission's complaint also charges that the respondent falsely
represented that he possessed and relied upon a reasonable basis that
substantiated the above claim. The Commission's complaint alleges that
this representation is false and misleading, and in violation of
section 5 of the Federal Trade Commission Act, 15 U.S.C. 45, because at
the time he made the representation respondent did not possess and rely
upon a reasonable basis that substantiated the claim.
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. Part I of the proposed order
prohibits the respondent from misrepresenting, directly or by
implication in his advertising for the ``U.S. Government Tracer
Business Program,'' or any other business opportunity, the past,
present, or future profits, earnings, income, or sales from such
business opportunity.
Part II of the proposed order prohibits the respondent from
representing, directly or by implication in his advertising for the
``U.S. Government Tracer Business Program,'' or any other business
opportunity, the past, present, or future profits, earnings, income, or
sales from such business opportunity, unless at the time of making such
representation respondent possesses and relies upon competent and
reliable evidence that substantiates the claim.
Part III of the proposed order requires the respondent to maintain
materials relied upon in disseminating any representation covered by
the order. Part IV of the proposed order requires the respondent to
distribute copies of the order to certain company officials and
employees. Part V of the proposed order requires the respondent to
notify the Commission of any discontinuance of his present business or
employment and of each affiliation with a new business or employment.
Part VI of the proposed order requires the respondent to file one or
more compliance reports. Part VII of the proposed order is a provision
whereby the order, absent certain circumstances, terminates twenty
years from the date of issuance.
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 their
terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 96-7865 Filed 3-29-96; 8:45 am]
BILLING CODE 6750-01-M
