In the Matter of the Complaint Against

HAMPARTZOON BAZARIAN d/b/a
WORLDWIDE FINANCIAL SYSTEMS
P. O. Box 170191 at
Atlanta, GA 30317-0191

P.S. Docket No. 20/103;

Grant, Quentin E.

APPEARANCES FOR COMPLAINANT:H. Richard Hefner, Esq. Don A. Potter, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1112

APPEARANCES FOR RESPONDENT: Frank J. Shannon, III, Esq. Walter Moore Henritze, Jr., Esq. Henritze & Shannon Suite 801-The Candler Building 127 Peachtree Street, N.E. Atlanta, GA 30303-1810

POSTAL SERVICE DECISION ON BREACH OF AGREEMENT
CONTAINING CONSENT ORDER TO CEASE AND DESIST

On January 24, l986, Complainant filed a Petition for Orders Based on Breach of Consent Agreement in which it alleges that Respondent has breached the terms of an Agreement Containing Consent Order to Cease and Desist (hereinafter the Agreement) executed by Respondent on February 22, l985. Complainant alleges that Respon dent, under the name Pyramid Financial Reports, continues to engage in promotional activities and to make the representations which he agreed to discontinue under paragraph 3 of the Agreement.

Pursuant to paragraph 6(c) of the Agreement, on the basis of evidence attached to the Petition, Complainant's request for an interim detention order was granted. Such order was issued on January 24, l986, directing the detention of mail addressed to Pyramid Financial Reports, P. O. Box 850, Eatonton, GA 31024-0850.

Respondent filed a timely Answer to the Petition together with a motion for a hearing and a motion to dissolve the interim detention order. The latter motion was denied by order dated February 19, l986.

Respondent's reply to the Petition does not establish any genuine issues of material fact or show other good cause requiring an oral hearing. Respondent's motion for such a hearing was, there fore, denied by order dated March 6, l986.

FINDINGS OF FACT

Paragraph 4 of the Complaint in this proceeding alleged that Respondent falsely represented, directly or indirectly, in substance and effect, whether by affirmative statements, omissions, or impli cation that:

"(a) Persons sending the required remittance through the mails to Respondent will typically earn $600 or more per week assembling mailers.

(b) Participants in the program will receive 75c / for each mailer assembled and returned to Respondent.

(c) The $35 remittance required to enter Respondent's program is the total amount of money to be expended by the participant.

(d) The work to be performed by persons participating in Respondent's program consist primarily of preparing and assembling mailers."

Negotiations following service of the Complaint resulted in the execution by Respondent of an Agreement Containing Consent Order to Cease and Desist dated February 22, l985. The agreement provided in pertinent part as follows:

"2. The promotional materials attached to or referred to in the complaint are employed by Respondent in seeking the remittance of money and property through the United States mail and may reasonably be construed as making the representations alleged in paragraph 4(a), (c) and (d) of the Complaint.

3. The use of the promotional activities and representations challenged in paragraph 4(a), (c) and (d) of the complaint for obtaining money or property through the mails has been and will be permanently discontinued and abandoned, and will not hereafter be resumed by any means, directly or indirectly, under any name or names, or through any corporate or other device."

Under paragraph 6 of the Agreement, Respondent consented to Complainant's initiation of a breach proceeding whenever there is reason to believe Respondent is violating the Agreement.

Following the execution and filing of the Agreement, Respondent Hampartzoon Bazarian, d/b/a Pyramid Financial Reports at P. O. Box 850, Eatonton, GA 31024-0850, conducted a work-at-home promotion advertised by means of direct mail solicitations typified by Exhibit "A" annexed hereto (Ex. 2 to Connelly affidavit annexed to Petition).

The solicitation in its heading and first paragraph conveys the message that participants in the program will typically earn between $180 and $480 per week. It does not mention $600 per week as typi cal weekly earnings. The figure $750 appears in the first paragraph not as typical weekly earnings but, rather, as an amount to be paid by Respondent for preparation of 1,000 mailers without reference to time.

The solicitation requires of participants the remittance of a $15.00 "deposit", stated to be a "one time only fee" for participa tion in the program. Helping to create and reinforce the impression that this deposit is the total amount of money to be expended by a participant are the assurances that participants will not be required to purchase any envelopes or postage stamps, that circulars will be furnished by Respondent, and that Respondent will reimburse mailing costs. Although classified ads are mentioned, participants are not told that they must purchase such ads until after they have sent Respondent the $15.00 deposit. (Connelly affid. Ex. 3)

The only mention in the solicitation of work required of parti cipants is stuffing of envelopes and mailing them to Respondent.

DISCUSSION AND CONCLUSIONS

The basic issue raised by the Petition is whether Respondent has breached the terms of the Agreement by continuing to make the repre sentations which he agreed therein to discontinue. The truth or falsity of such representations, if made, is not in issue. See Raymond Milo, P.S. Docket No. 12/168 (P.S.D. Dec. 31, l981), and cases cited therein.

The meaning of advertising representations is to be judged from a consideration of an advertisement in its totality and the impres sion it would most probably create in ordinary minds. Donaldson v. Read Magazine, 333 U. S. 178 (l948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. l957); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. l959). Express represen tations are not required. It is the net impression which the advertisement is likely to make upon purchasers to whom it is directed which is important, and even if an advertisement is so ordered as not to make an express representation, if it is artfully designed to mislead those responding to it the mail fraud statutes are applicable. G. J. Howard v. Cassidy, 162 F. Supp. 568. See, also, Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U. S. 748 (l976).

The ultimate impression on the reader results not only from what is stated but also from what is reasonably implied therefrom. Vibra-Brush Corp. v. Schaffer, supra; Aronberg v. Federal Trade Com mission, 132 F.2d 165 (7th Cir. l942).

The tendency of advertising to deceive the ignorant, gullible, and less experienced is also to be considered. See, Gottlieb v. Schaffer, 141 F. Supp. 7, 16 (S.D.N.Y. l956); Donaldson v. Read Magazine, supra.

Applying the foregoing principles to Respondent's advertising of this work-at-home program, it is concluded that Respondent has resumed making the representations alleged in subparagraphs 4(c) and (d) of the Complaint.

Although the remittance required in the new scheme is $15.00 rather than $35.00 (in the scheme alleged in the Complaint), the critical essence of the 4(c) representation is that the remittance, regardless of the amount, is the total amount of money to be expended by a participant. The impression created by the various assurances, found above, relieving participants of the burden of expenditures for mailing, for circulars, for envelopes, and for stamps, constitutes the representation alleged in 4(c). The reference to classified ads is much less prominent in the Pyramid solicitation than in the previous solicitation which Respondent agreed made such representation.

The Pyramid solicitation also continues the 4(d) representation that the work to be performed by participants consists primarily of preparing and assembling mailers.

The Pyramid solicitation represents that typical weekly earnings will run from $180 to $480 per week, not $600 per week as alleged in 4(a). Therefore, a continuation of the 4(a) representation is not found.

In paragraph 6 of the Agreement Respondent consented to the initiation of this type of proceeding in the event of its breach of the Agreement. Therefore, there is no merit in his defenses that the proceeding is barred by the First and Fourteenth Amendments to the U. S. Constitution and that the Judicial Officer lacks juris diction of the subject matter. Respondent has made no attempt to support its defense of failure to join necessary parties.

Respondent cites United States Postal Service v. Stimpson, 515 F. Supp. 1149 (l981), as support for its argument that Complainant's evidence is insufficient to warrant granting the Petition. The citation is inapposite because in Stimpson denial of the petition for a temporary restraining order under 39 U.S.C. § 3007(a) was based on the failure of the Postal Service to prove the falsity of the representations alleged. In the present proceeding, as stated above, falsity is not an issue.

Respondent has breached the terms of the Agreement. Paragraph 6 thereof provides for the issuance of orders of the type described in 39 U.S.C. § 3005(a)(1) and (2), as requested by Complainant, where Respondent is found to be in breach of the Agreement. Accordingly, such orders are issued herewith.