P.S. Docket No. 29/156

April 18, 1989 

In the Matter of the Complaint Against:

12339 Kitty Brook,
Houston, TX 77071-3006


P.O. Box 90984,
Houston, TX 77290-0984

211 Highland Cross, Suite 110,
Houston, TX 77073-1733

P.S. Docket No. 29/156

Mason, Randolph D., Administrative Law Judge

Tom Aubry, Esq., Brian Nicholson, Esq.,
3701 Kirby Drive #1230, Houston, TX 77098

Elizabeth P. Martin, Esq.,
Geoffrey A. Drucker, Esq.,
Kenneth F. Innes, Esq.,
U. S. Postal Service, Law Department,
Washington, DC 20260-1144


This proceeding was initiated on March 2, 1988, when the Postal Service filed a Complaint alleging that Respondents David Notestine, Gail Martin-Notestine, Telecard Corporation and PMI Holdings, Inc., are engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations in violation of 39 U.S.C. § 3005. Specifically, the Complaint alleges in paragraph 10 that Respondents falsely represent, directly or indirectly, in substance and effect, whether by affirmative statements or omissions, that:

(a) Persons submitting the required remittance will receive either a Visa or Mastercard credit card without additional application or processing fees;

(b) Applicants will be able to obtain a full refund of their initial application fee without further payment;

(c) Applicants will be able to obtain a credit card without establishing a savings account to secure the credit; and

(d) Respondents are able to affect the decision making of potential lenders for the benefit of persons responding to their solicitations.

In their Answer, as amended, Respondents deny that they have made the above false representations or that they have otherwise violated the statute.

The instant proceedings were suspended after the U.S. District Court issued an injunction against the Postal Service prohibiting further administrative proceedings. Thereafter, the Court of Appeals for the Fifth Circuit vacated the injunction and reversed the District Court's decision. United States Postal Service v. Notestine, 857 F.2d 989 (5th Cir. Sep. 30, 1988).

A hearing was held by the Administrative Law Judge on October 4-6, 1988 in Houston, TX. All parties were represented by counsel and afforded full opportunity to be heard, adduce relevant evidence, and examine and cross-examine witnesses. Complainant presented the testimony of Mary K. Kelsheimer, Patricia Williams, Postal Inspector Judith Groom, and expert witness Al Birdwell, Ph.D. Respondents presented the testimony of David Notestine, Brian Nicholson, Gail Elizabeth Martin Notestine, David Pace, Linda Goshy, Lance Parker, and expert witness Herbert L. Lyon, Ph.D. Both parties presented documentary evidence; Respondents presented a video recording about secured credit cards and the operation of their company.

The parties filed proposed findings of fact and conclusions of law and reply briefs which have been duly considered. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. Based on the entire record herein, including my observation of the witnesses and their demeanor, the exhibits, stipulations, and other relevant evidence adduced at the hearing, I make the following findings of fact and conclusions of law:


1. Respondents David Notestine and Gail Martin Notestine are individuals residing in the State of Texas (Amended Ans. P2, 3). Respondent Gail Martin Notestine is also known as Gail Martin (Tr. 401). These individual respondents are the sole shareholders in, and directors and officers of PMI Holdings, Inc., a Texas corporation (CX-8, 10, Amended Ans. P4). PMI Holdings, Inc. is the sole shareholder of Telecard, Inc., also a Texas corporation (CX-9). Telecard is a division of PMI Holdings, Inc. (CX-1, 12, 19, 20).

2. The individual Respondents direct and control the acts and practices of Telecard, Inc. (CX-7, 9, 18, 12; Tr. 66, 325-326, 382).

3. Respondents use direct mail solicitations to seek the remittance of money in their credit card program.

4. Respondents use P.O. Box 90984, Houston, TX 77290-0984 to receive remittances in response to their promotions (Amended Ans. P8; CX-14, 17; RX-9).

5. Although the Telecard promotion has been through many permutations (CX-1, 13, 14, 19, RX-9), the product remains the same. Recipients of Telecard's solicitation are invited to apply for a MasterCard or VISA credit card for an application fee of about $30. Upon submitting their application and fee, participants receive a solicitation from Service One Corporation, for whom Telecard is merely a marketer (CX-15). Service One markets and processes cards for the Bank of Hoven (Tr. 294). To get a credit card, participants are required (1) to pay another $30 application fee to Service One ($60 less a $30 coupon for Telecard customers), (2) file a new application with Service One, and (3) establish a savings account of at least $380 to maintain their credit limit (CX-3, 23). Those who wish to obtain a "guaranteed refund" are not able to receive such a refund unless they have made the subsequent payment to Service One (Tr. 335-337).

6. The Telecard solicitations are aimed at those who have no credit or poor credit histories (CX-13, 14, 19; RX-9; Tr. 286-287, 297). Many of the people in the targeted group are unfamiliar with credit issuing practices, particularly the concept of a secured credit card (Tr. 122-125). About 160,000-175,000 persons have responded to the Respondents' solicitations (Tr. 328, 540).

The Expert Witnesses

7. Complainant presented the testimony of Al E. Birdwell, Ph.D., an expert in consumer psychology and marketing. He has a Ph.D., 1964, and a Master's Degree in Business Administration with a concentration in marketing, statistics, economics and psychology (Tr. 87). He teaches marketing at the graduate level and is experienced as an advertising and marketing consultant. He is experienced in public perception of marketing practices and in the study of consumer perceptions (Tr. 90-93, 98). He has conducted more than 1000 focus groups for that purpose (Tr. 98). Dr. Birdwell is a highly qualified expert. His testimony was forthright and credible, and his opinions support the findings of the Administrative Law Judge.

8. Respondents offered David Pace as an expert in consumer perception. He is an attorney formerly employed with the Texas Attorney General's office, with his most recent contact with such employment ending in 1981 (RX-22). His experience in the area of deceptive trade practices was limited to two years (Tr. 409). Mr. Pace was unfamiliar with the standards applicable in actions brought pursuant to 39 U.S.C. § 3005 and he has minimal qualifications as an expert in consumer perceptions (Tr. 414-426). His opinion has been given little weight in this proceeding.

9. Respondents also presented the testimony of Herbert Lyon, Ph.D., an expert in marketing (RX-31). Dr. Lyon has been a professor of marketing in the College of Business Administration at the University of Houston for 11 years (Tr. 504). He spends about 1/3 of his time as a consultant (Tr. 511). He received his Ph.D. in marketing, economics, and statistics (Tr. 505). His experience with consumer behavior and consumer psychology is relatively minor in comparison with that of Dr. Birdwell (Tr. 515-516).

a. In addition to his relative lack of expertise, Dr. Lyon's analysis of the data was flawed. He only analyzed the 245 written customer complaints provided to him by Respondents which had been received from the Better Business Bureau, Postal Service, Attorney General of Texas, and other consumer protection organizations (Tr. 513, 528, 579-588). He did not analyze any complaints that consumers sent only to Telecard. Dr. Lyon incorrectly calculated Respondents' "complaint ratio" using this incomplete data and erroneously compared it with a purported complaint ratio for the industry which encompassed a broader variety of complaints such as telephone calls to companies (Tr. 579, 588-591). He admitted at the hearing that it could not be assumed the complaints reported by Telecard represented all complaints (Tr. 587). In fact, most people wishing to complain were forced to use the toll-free watts line, because, with the exception of the mailing and business reply envelopes, which would not usually be retained, the solicitation does not contain Respondent's address (Tr. 404). Accordingly, Dr. Lyon's reliance strictly upon the complaints filed with agencies was misplaced, and his related conclusion that the remaining 99.8% of customers understood the brochure (Tr. 572) is rejected. His conclusion fails to consider consumers who were misled but complained only to the company and failed to seek further redress.

b. It is also noted that Dr. Lyon's reliance on the "average" education level of customers was improper in view of the large number of lesser educated consumers. The average male complainant was 38 years of age with an income of $25,292, and that the average female was 36 with an income of $18,885 per year (Tr. 525). These persons ranged from 18 to 64 years of age with incomes ranging from $6,000-$55,000, with about 25% of them having incomes of $15,000 or less (RX-30, p. 34-41). Statistics for the non-complaining customers were about the same (Id. at 47). Based upon these averages and government statistics, Dr. Lyon concluded that the "average" customer had completed 2-3 years of college (Tr. 527). However, based upon the same statistics, the list of customers targeted by Respondents included a substantial number who had not graduated from high school.

c. In concluding that the public was not deceived, Dr. Lyon assumed that they had read the brochure (Tr. 565-566). At one point, however, he admitted that he did not know whether they read it or not (Tr. 575). Ultimately he concluded that the 99.8% of customers who failed to complain to a consumer agency "apparently read the information" (Tr. 576). For the reasons set forth in P9a, supra, this conclusion is also rejected. Also, it appears that Dr. Lyon has not had much, if any, experience gauging the extent to which consumers read fine print disclaimers in solicitations. In this regard, in making his estimates he could only rely upon the extent to which individuals completed and returned his own direct mail surveys, which involves different circumstances (Tr. 598).

10. Lance Parker is a computer specialist who tested the solicitations with the Right Writer computer program (RX-25), which applies the Flesch-Kincaid mathematical formula to written materials. Based on the results, Respondents argue that the solicitations are understandable. Mr. Parker explained that the program produced a "readability index" based, inter alia, upon the number of syllables in the words. The program does not understand the meaning of words (Tr. 489). It cannot detect false statements or misrepresentations, nor can it read distinctions based upon format, highlighting, or print size variations (Tr. 501-503). The solicitations received a "readability index" of 9.93, close to what Parker described as unacceptably difficult to read. The index represents the grade level necessary to read the document (Tr. 488, 498-499). In any event, a document could be quite "readable" under this test and still contain ambiguities and misrepresentations. Accordingly, these results have little or no relevance to the issue of whether false representations (a)-(d) are made.

11. Respondents have frequently revised their solicitation. The examples in evidence instructed consumers to respond on or before the date in parentheses: CX-1 (August 1987); CX-19 (October 1987); CX-13 (April 1988); CX-14 (August 1988); RX-9 (October 1988)(Tr. 28, 352, 365).

The False Representations

Representation (a)

12. As alleged in P10(a) of the Complaint, Respondents represent that persons submitting the required remittance will receive either a VISA or MasterCard credit card without additional application or processing fee (CX-1, 13, 14, 19, RX-9). This finding is corroborated by the testimony of Complainant's expert, Dr. Birdwell (Tr. 116-121), and the consumer witnesses (Tr. 30-33, 183-190). Specifically, the following portions of Respondents' solicitations, among others, make this representation:

"you can now obtain a VISA (TM) or MasterCard (R) credit card regardless of your past history." (emphasis in original) (CX-13, 19);

"Save money by applying directly to Telecard without paying expensive referral fees." (CX-13, 14; RX-9);

". . . mail in your application today and begin enjoying the privileges and conveniences of a VISA or MasterCard plus get a new start on your credit history." (CX-13, 14);

"Act Now For Your Credit Card" (RX-9, CX-13, 14).

13. The instructions on the application also state:

"It's easy as 1-2-3] 1. Fill out this Application [Request] Form. . . . 2. Enclose your check or money order made payable to Telecard Corporation. 3. Mail the completed Application Form and your check or money order in the enclosed postage-paid envelope." (CX-1, 13, 14; RX-9) (Bracketed language in RX-9, CX-14 only)

14. All of the versions give the impression that the next communication a participant could expect to receive from Telecard would be a credit card. Pictures of the cards are adjacent to Respondents' company name, which is described as an authorized marketer for the bank. The emphasis throughout the solicitations on the immediacy of the application and receipt of a credit card; "apply directly to Telecard," "mail your application today . . . and begin enjoying the privileges," "Act Now," "you can now obtain," suggests that the process is simple and quick. The concept of the immediacy of the credit conflicts with Respondents' two step application process.

15. The following disclaimer appears on page two of the early solicitations (CX-1; CX-19):

One-time $30 credit processing fee charged by Bankcard center

It appears at the bottom of a list of rather uninteresting, routine items and would not be noticed by many readers. Also, it would appear to many readers to be the charge remitted to Telecard ($40 less the $10 coupon).

16. In addition, the following disclaimer appears in very small print beneath the application after a number of routine, mundane or repetitive statements:

A one-time (refundable if not approved) credit processing fee, (usually thirty dollars) will be billed later.

This is not only inconspicuous, but ambiguous, since many applicants think they are remitting the only $30 fee required (Tr. 198).

17. With the exception of CX-13, the solicitations contain the following disclaimer near the bottom of the first page:

"For our small fee we will assist you and expedite your receipt of an application, [in order to make available to you what would not be possible otherwise.] [Bracketed portion in CX-1 and CX-19 only].

This ambiguous language would not be noticed by many readers and would not give the impression that the customer would have to receive and submit a second application.

18. On the recent versions (RX-9; CX-14), a disclaimer appears on the back of the disclosure slip. The first side of the slip is headed "Credit Disclosure Information," which the reader is told conforms with federal law. Information is provided in fine print on finance charges and grace periods. On the reverse side, the disclosure slip contains the following disclaimer:

Additional one-time $25 processing fee charged by credit card center [to be enclosed with their application. We are not the credit card center]. [Bracketed language in RX-9 only].

This is inconspicuously placed under "Other Charges or Fees" in small print along with late payment fees ($15), over the limit fee ($15), bad check fee ($15), and minimum finance charge ($.50) on the reverse side of what appears to be a routine disclosure slip inserted to comply with legal requirements. This disclaimer would not be noticed by many readers. The bracketed additions in RX-9 do not alter this conclusion (Tr. 237). Also, the agreement to be bound by the terms of the disclosure card, which is found at the bottom of the block of small print under the application, would not be noticed by many readers (RX-9; CX-14).

19. Recent versions of the solicitation refer to the application form as an "application request" (CX-14; RX-9). This terminology is ambiguous and many ordinary readers would still consider the form to be both the credit card application itself and a request for a credit card rather than a request for an application.

20. Also, the following disclaimer appears in the small print under the application and, in recent versions, is hidden in the small print on the reverse of the disclosure card:

I/we agree to complete any additional forms and to provide all requested information required by the credit card [or Bankcard] center for processing.

The ordinary reader, if he noticed this language buried under routine, repetitive language, would not interpret the "additional forms" as an additional application from another company.

21. Furthermore, the testimony of the consumers and Dr. Birdwell shows that those who read the solicitations are left with the overall impression that, by sending the Telecard application and fee, they will receive a credit card rather than another application calling for another fee (Tr. 112, 117, 119-121, 173, 182-183, 186). Finally, Respondents admit that there has been confusion about the necessity to make a second application (Tr. 341).

Representation (b)

22. As alleged in P10(b), Respondents represent that applicants will be able to obtain a full refund of their initial application fee without further payment. All of the solicitations state:


THERE IS NO RISK]] If you're not approved for your credit card FOR ANY REASON, your money is refunded to you IN FULL upon receipt of your denial letter [from the credit card center]. We are so confident of your success in receiving VISA (TM) or MASTERCARD . . . that we stand behind this offer with a 100% MONEY BACK GUARANTEE] [Bracketed language added in recent versions].

(CX-13, 14, 19, RX-9). Slightly above this "guarantee" also appears THERE IS ABSOLUTELY NO RISK]" on all the solicitations. The first paragraph of the solicitations contains, in the same bold print, "And we back it with a 100% MONEY BACK GUARANTEE]"

23. The solicitations make extensive use of variations in print size and highlighting. Highlighting and print size variations are commonly used to give prominence to particular aspects of a promotion and are used to cause a consumer to "see" certain aspects of a solicitation (Tr. 117-119). The guarantee is displayed, and repeated, prominently throughout the solicitations (Tr. 117-119). The consumer witnesses relied upon this guarantee provision to assure themselves that they were not risking the loss of their application fee (Tr. 31, 186).

24. The newest version of the solicitation contains the following disclaimer in print smaller than the regular print on the solicitation, contained on the reverse side of the small slip entitled "Credit Disclosure Information":

"I/we understand Telecard's fee will not be refunded unless I complete the program and submit to them a copy of the credit card centers denial letter" (RX-9).

This disclaimer would not inform the average consumer that he would have to spend additional fees to obtain a refund. First, the language is hidden in fine print after two sentences ("I/We certify. . .") which previously appeared under the application. The average consumer, if he noticed this language removed from the guarantees, would think that completing the Telecard application and submitting Telecard's fee is the only "program" he is required to complete. Likewise, on pages 1-2 of the newer versions the words "[a]fter completing the program, if you are not approved . . . your money will be refunded" fail to inform the reader about the additional fees required before a refund will be given.

Representation (c)

25. As alleged in paragraph 10(c) of the Complaint, Respondents represent that applicants will be able to obtain a credit card without establishing a savings account to secure the credit. This representation is implied. Since a secured credit card program is not the norm in the credit card industry (Tr. 121-123) many ordinary consumers would not expect to be required to establish a savings account to maintain their line of credit (Tr. 187).

26. In the early versions (CX-1, 19) the reference to a collateral savings account appears in the following list of routine items:

Source of income required.

Must be 18 or older.

All banking transacted by convenient postpaid mail."

Federally insured collateral savings account earns annual interest.

Annual $35 fee per card billed to first statement each year.

One-time $30 credit processing fee charged by

Bankcard center.

Many ordinary readers would not notice the reference to a collateral account (Tr. 121-122). In addition they would fail to notice the following disclaimer appearing in the very small print under the application form (CX-1A):

". . .My credit limit will be determined by a collateralized account which is maintained with the institution issuing my card (minimum amount to be determined by Bankcard Credit Processing division of the member federally insured savings & loan)."

This statement is hidden in the middle of seven lines of small print beginning with several dull or repetitive statements likely to repel many readers.

27. Although Respondents' most recent solicitations (CX-14, RX-9) specifically refer to a "secured card program," many readers would not know what this means (Tr. 123). The first page of the solicitation states, "[f]or years Telecard has helped to obtain credit, through the secured card program*" (RX-9). The asterisk leads to a footnote on the next page which merely states: "Please read the enclosed Credit Disclosure Card carefully."

28. Those who turn to the disclosure card would see nothing relating to a "secured" card until the middle of the reverse side. There, the disclosure slip makes the following disclaimer:



I/We understand that the credit line for my MasterCard and/or Visa from Bank of Hoven, Hoven SD card is to be determined by an FDIC insured collateralized deposit account with the Bank of Hoven which issues the card. I/we understand that this secured and collateralized savings deposit is to be in an amount, determined by me, of not less than three hundred eighty dollars and no more than twenty five hundred dollars and is required as a condition of obtaining the card(s) under this program and is a pledge to secure the repayment of all credit extended through this program.

A "collateralized account" is not a familiar term to the average reader (Tr. 123-125, 221). Also, in view of the inconspicuous location of the disclaimer and the small print, this would not be noticed by many average readers (Tr. 187). Finally, references to dollar amounts in other sections of the solicitation are represented by numerals, but references to the amount to be deposited to the savings account are not likely to be noticed because they are spelled out (Tr. 125).

Representation (d)

29. As alleged in P10(d) of the Complaint, Respondents represent that Respondents are able to affect the decision making of potential lenders for the benefit of persons responding to their solicitations. Recipients of the Telecard solicitation receive the impression that it is as a result of Telecard's special efforts and services that certain financial institutions will issue a credit card to those who wouldn't ordinarily be able to get one. Consumers think that it is Telecard who is able to get them a previously unavailable credit card and that no other company is involved (Tr. 32, 188). In addition to the overall impression given by the solicitations, including the guarantee, which suggests that Telecard is willing to assume some risk because of their special abilities to obtain credit cards, there are several specific statements which make this representation:

"Our program, in operation since 1979, was established to help people in exactly your financial position to obtain credit, . . ." (CX-13)

"The financial institutions we deal with are committed to giving people another chance. They are less concerned with whatever problems you've had in the past than in how well you handle your future account with them." (CX-19)

"For our small fee, we will assist you and expedite your receipt of an application, in order to make available to you what would not be possible otherwise." (CX-19)

The 800 Number Disclaimer

30. Finally, the fact that the solicitations provide a toll-free number for consumers to call "if any part of this program seems unclear to you" does not clarify or dispel the false representations. A person calling that number, if he is able to get through (some have not, Tr. 33, 474), hears a tape recording which answers "three commonly asked questions," including "How does the program work?" It quickly describes, inter alia, the two-step application process, the necessity of opening a savings account, and the full process for obtaining a refund (Tr. 465-466).

At the end of the recording, an operator comes on the line and answers any further questions (Tr. 311). However, many ordinary consumers who had been misled would not call the number because they mistakenly believed they understood the true nature of the program (Tr. 189). Accordingly, this disclaimer does not dispel the false representations contained in the written materials.

Respondents admittedly receive about 1,000 calls each week (Tr. 388). In Respondent Gail Martin's view, most of these callers are "morons" asking "inane questions" (Tr. 401).

Ultimate Findings

31. Respondents' solicitations make the representations contained in P10(a)-(d) of the Complaint.

32. Representations (a)-(d) are false as a matter of fact (Tr. 16-17).

33. These representations are material because they tend to induce the reader to remit money to Respondents (See, e.g., Tr. 24, 30, 32, 183, 185-189).


1. (a) Each of Respondents' advertisements must be considered as a whole and the meaning is to be determined in light of the probable impact of this material on a person of ordinary mind. Donaldson v. Read Magazine, 333 U.S. 178, 189 (1948); Peak Laboratories, Inc. v. U.S. Postal Serv., 556 F.2d 1387, 1389 (5th Cir. 1977). The statute is intended to protect the gullible, naive, and less critical reader, as well as the more sophisticated, wary reader. Fields v. Hannegan, 162 F.2d 17 (D.C. Cir. 1947), cert. denied, 332 U.S. 773 (1947); M.K.S. Enterprises, Inc. v. United States Postal Service, 459 F. Supp. 1180, 1184 (E.D.N.Y. 1978); Gottlieb v. Schaffer, 141 F. Supp. 7 (S.D.N.Y. 1956); Leo Daboub, P.S. Docket No. 19/185 (P.S.D. July 10, 1986). Express misrepresentations are not required. It is the net impression which the advertisement is likely to make upon individuals to whom it is directed which is important, and even if an advertisement is so worded as not to make an express representation, if it is artfully designed to mislead those responding to it, the false representation statute is applicable. G.J. Howard Co. v. Cassidy, 162 F. Supp. 568 (E.D.N.Y. 1958); See also, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976).

(b) Where an advertisement is ambiguous or capable of more than one meaning, if one of those meanings is false, the advertisement will be held to be misleading. Rhodes Pharmacal Co. v. F.T.C., 208 F.2d 382, 387 (7th Cir. 1953); Ralph J. Galliano, P.S. Docket No. 19/15 (P.S.D. May 2, 1985 at p. 9). It is not difficult to select words which will not deceive. See, United States v. 95 Barrels of Vinegar, 265 U.S. 438 (1924).

(c) An inconspicuous disclaimer is not sufficient to dispel the effect of false representations. Leo Daboub, supra; Gottlieb v. Schaffer, supra.

(d) The Administrative Law Judge can determine whether the representations are made, their effect on the ordinary mind, and materiality without the assistance of lay or expert testimony. Standard Research Labs, P.S. Docket No. 7/78 (P.S.D. Oct. 27, 1980); The Robertson-Taylor Company, P.S. Docket Nos. 16/98-102, 16/120-121, (P.S.D. March 31, 1986 at page 29); Vibra-Brush v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2nd Cir. 1958).

(e) Notwithstanding (d), Respondents argue that Complainant cannot prevail because it failed to present a higher quality of evidence of consumer reaction. In this regard, Respondents argue that a proceeding under 39 U.S.C. § 3005 is analogous to private litigation under the Lanham Act, 15 U.S.C. § 1125(a), in which the Courts have held that evidence of consumer perception is required as proof of the cause of action. This argument fails for two reasons. First, the Complainant presented ample evidence on this point, including the testimony of consumer witnesses and the opinion of Dr. Birdwell, an expert in consumer behavior and consumer psychology. Dr. Birdwell's credentials are excellent, and it was not necessary for him to perform surveys or focus groups with regard to the solicitations in question. Second, Respondents argument, which is based in part on American Home Products Corp. v. Johnson & Johnson, 436 F. Supp. 785 (S.D.N.Y. 1977), aff'd 577 F.2d 160 (2nd Cir. 1978), has been previously considered and found to be inapplicable to a proceeding under 39 U.S.C. § 3005. Standard Research Labs, P.S. Docket Nos. 7/78 & 7/86 (P.S.D. Oct. 27, 1980); Standard Research Labs, P.S. Docket Nos. 9/63 & 9/64 (P.S.D. Aug. 31, 1981). There it was held that, while the Courts in the Lanham Act cases have recognized that they are not in a position to make the appropriate findings without the aid of testimony, nonetheless, in a § 3005 case the Administrative Law Judge and the Judicial Officer are fully capable of doing so. See also, Peak Laboratories, Inc. v. United States Postal Service, 556 F.2d 1387, at 1389 (5th Cir. 1977); Cosvetic Labs, P.S. Docket Nos. 9/118-9/143, 10/38-10/43

(P.S.D. Sep. 30, 1981).

2. Applying the foregoing standards, I find that Respondents' advertisements make the representations alleged in P10(a)-(d) of the Complaint. The language contained in the advertisements, when read in context, which directly or impliedly makes these representations is set forth in the findings of fact.

3. As set forth in the findings of fact, the representations set forth in paragraph 10 of the Complaint are materially false.

4. Complainant has established its case by a preponderance of the reliable and probative evidence of record. S.E.C. v. Savoy Industries, Inc., 587 F.2d 1149, 1168 (D.C. Cir. 1978).

5. The representations made by Respondent are material because they have a tendency to persuade readers to order and pay for Respondents' product.

6. Respondents are engaged in the conduct of a scheme for obtaining remittances of money through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.

7. The attached Cease and Desist Order and False Representation Order should be issued.