[Federal Register Volume 62, Number 24 (Wednesday, February 5, 1997)]
[Notices]
[Pages 5412-5413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2808]
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FEDERAL TRADE COMMISSION
[File No. 952-3401]
1554 Corp.; Brainerd L. Mellinger, III; 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, the Woodland
Hills, California-based company and its president from making
unsubstantiated earnings claims and from using deceptive testimonials.
The Commission had alleged that 1554 and Mellinger advertised a work-
at-home course, called ``Mellinger World Trade Mail Order Plan,'' in an
infomercial which contained deceptive and misleading claims.
DATES: Comments must be received on or before April 7, 1997.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT:
Justin Dingfelder, Federal Trade Commission, S-4302, 6th and
Pennsylvania Ave, NW, Washington, DC 20580. (202) 326-3017.
Jonathan Cowen, Federal Trade Commission, S-4302, 6th and Pennsylvania
Ave, NW, Washington, DC 20580. (202) 326-2533.
Lemuel Dowdy, Federal Trade Commission, S-4302, 6th and Pennsylvania
Ave, NW, Washington, DC 20580. (202) 326-2981.
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 January 27, 1997),
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, NW, Washington, DC 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, subject to final
approval, an agreement to a proposed consent order from 1554
Corporation and its president Brainerd L. Mellinger, III (collectively,
``respondents''). The agreement would settle a proposed complaint by
the Federal Trade Commission that respondents engaged in unfair or
deceptive acts or practices in violation of section 5(a) of the Federal
Trade Commission Act.
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 or make final the agreement's proposed
order.
The Proposed Complaint
This matter concerns advertising practices related to the sale of
1554 Corporation's Mellinger World Trade Mail Order Plan (``Mellinger
Plan''). The administrative complaint, which the Commission has
proposed to issue, would allege that respondents promoted the sale of
the Mellinger Plan by creating and disseminating advertisements and
promotional materials, including a program-length television
advertisement entitled ``Mellinger's Secret Treasures.''
The complaint charges that through the use of statements contained
in their advertisements and promotional materials, respondents made
unsubstantiated representations that consumers who use the Mellinger
plan typically succeed in readily starting and operating profitable
businesses and that consumers who use the Mellinger Plan typically earn
substantial income. The complaint also charges that endorsements
appearing in respondents' advertisements and promotional materials were
represented, without substantiation, to be reflective of the typical or
ordinary experience of members of the public who have used the
Mellinger Plan.
The Proposed Order
The proposed consent order contains provisions that are designed to
remedy the alleged advertising violations and to prevent respondents
from engaging in similar acts and practices in the future. The order
prohibits respondents from making any unsubstantiated representations:
(1) that consumers who use the Mellinger plan typically succeed in
readily starting and operating profitable businesses, (2) that
consumers who use the Mellinger Plan typically earn substantial income,
or (3) about the performance, benefits, efficacy or success rate of any
product or service concerning business opportunities.
The proposed order also contains prohibitions about using or
misusing testimonials or endorsements. In particular, the order
prohibits respondents from using testimonials that do not reflect the
actual opinions, beliefs, or experiences of the endorser, and from
using testimonials to represent the typical experience of respondents'
customers unless respondents can substantiate that such claims are in
fact typical or respondents clearly disclose that the endorser's
experience is not typical. The order also contains standard provisions
regarding record-keeping, notification of changes in corporate or
employment status, distribution of the order, termination of the order,
and the filing of a compliance report.
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
[[Page 5413]]
the agreement and the proposed order or to modify their terms in any
way.
Donald S. Clark,
Secretary.
[FR Doc. 97-2808 Filed 2-4-97; 8:45 am]
BILLING CODE 6750-01-P