[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