[Federal Register Volume 64, Number 88 (Friday, May 7, 1999)]
[Notices]
[Pages 24652-24653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11492]
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FEDERAL TRADE COMMISSION
[File No. 9723149]
LS Enterprises, LLC et al.; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement and the terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before July 6, 1999.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: John Dugan and Andrew Caverly, Boston
Regional Office, Federal Trade Commission, 101 Merrimac Street, Suite
810, Boston, MA 02114-4719, (617) 424-5960.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 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 complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for April 21, 1999), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW., Washington,
DC 20580, either in person or by calling (202) 326-3627.
Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Avenue, NW,
Washington, DC 20580. Two paper copies of each comment should be filed,
and should be accompanied, if possible, by a 3\1/2\ inch diskette
containing an electronic copy of the comment. 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
Section 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 to a
proposed consent order from LS Enterprises, LLC, Internet Promotions,
LLC, and Louis Salatto. The proposed respondents promoted and sold
various products and services through the Internet via unsolicited
commercial E-Mail (``UCE). In particular, the proposed respondents
promoted and sold UCE products and services, whereby the proposed
respondents offered to assist in sending bulk UCE on behalf of other
companies or individuals who were selling products or services, and
sold UCE software and mailing lists so that other companies or
individuals could send their own bulk UCE. The proposed respondents
also promoted and sold various work-at-home and business opportunities
via UCE.
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.
The Commission's complaint alleges several unfair or deceptive acts
or practices related to the proposed respondents' promotion and sale of
various products and services via UCE. The complaint charges that, with
respect to the promotion and sale of UCE products and services, the
proposed respondents: falsely represented that they acted as an E-Mail
Internet Service Provider; falsely represented their experience in
providing UCE services; made false and unsubstantiated earnings claims
for purchasers of their UCE products and services; and made false and
unsubstantiated claims about the receptivity of consumers on their E-
Mail recipient lists towards receiving UCE.
The complaint further charges that the proposed respondents made
several false or unsubstantiated claims in the promotion and sale of
various work-at-home and business opportunities via UCE. The complaint
charges that in a promotion concerning setting consumers up with jobs
as ``mystery shoppers,'' the proposed respondents: falsely represented
that they acted as contractors for major corporations to hire consumers
to work as ``mystery shoppers,'' have hired thousands of consumers to
work as ``mystery shoppers,'' have actual job openings for ``mystery
shoppers'' all over the country, and will give consumers as many
``mystery shopper'' assignments from the proposed respondents as they
want or need; and made false and unsubstantiated earnings and free
merchandise claims. The complaint also charges that in a general work-
at-home promotion, the proposed respondents: falsely claimed that they
have helped thousands of consumers to find home-based work; and made
false and unsubstantiated claims about earnings, when consumers can
begin work, and when and for how long they can receive paychecks.
Finally, in a promotion concerning the sale of reproduction and
distribution rights for various consumer manuals, the complaint charges
that the proposed respondents: falsely related their experience in
selling consumer manuals; and made false and unsubstantiated earnings
claims
[[Page 24653]]
associated with the sale of these manuals.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent the proposed respondents from
engaging in similar acts in the future. Parts I and II of the proposed
order apply to the promotion of any UCE product or service, or any
product or service concerning business opportunities or work-at-home
opportunities. Part I prohibits the proposed respondents from
misrepresenting in any manner, expressly or by implication: (A) Their
ability to provide any such product or service; (B) their experience in
providing any such product or service; (C) that they act as contractors
for other companies to hire consumers for any type of work; or (D) the
availability of actual job openings or any other type of employment
opportunities, or the level of assistance provided by them in securing
any job or other type of employment opportunity. Part II prohibits the
proposed respondents from making any claim about: (A) The amount of
earnings, income, or sales that a prospective purchaser could
reasonably expect to attain; (B) the amount of time within which a
prospective purchaser could reasonably expect to: (1) begin earning
money; (2) continue earning money; (3) attain any amount of earnings,
income, or sales; or (4) recoup his or her investment; (C) the
availability of free merchandise; or (D) the receptivity of persons on
any type of mailing list towards receiving commercial solicitations,
unless the representation is true and, at the time it is made, the
proposed respondents possess and rely upon competent and reliable
evidence that substantiates the representation.
Part III of the proposed order prohibits misrepresentations in
UCEs, including, but not limited to, misrepresentations in the subject
line or the text of the UCE. Part IV applies to the sale of any product
or service, and prohibits the proposed respondents from making any
representation, in any manner, expressly or by implication, about the
benefits, performance, efficacy, or success rate of such product,
unless such representation is true and, at the time the representation
is made, the proposed respondents possess and rely upon competent and
reliable evidence, which when appropriate must be competent and
reliable scientific evidence, that substantiates the representation.
Part V of the proposed order contains a bond provision requiring
the proposed respondents to post a $100,000 bond before advertising,
promoting, offering for sale, selling, or distributing any UCE product
or service via any media, or any other product or service via UCE.
Part VI of the proposed order contains record-keeping requirements
for materials that demonstrate the compliance of the proposed
respondents with the proposed order. Part VII requires distribution of
a copy of the consent decree to certain current and future personnel
who have responsibilities related to the subject matter of the order.
Part VIII provides for Commission notification upon any change in the
corporate respondents affecting compliance obligations arising under
the order. Part IX provides for Commission notification upon any change
in the individual respondent's employment status. Part X requires the
filing of compliance report(s). Finally, Part XI provides for the
termination of the order after twenty years under certain
circumstances.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the agreement and proposed order or to modify in any
way their terms.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 99-11492 Filed 5-6-99; 8:45 am]
BILLING CODE 6750-01-M
