[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]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 9723149]


LS Enterprises, LLC et al.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

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