In the Matter of the Complaint Against EVELYN TAYLOR and TAYCO MAILS P. O. Box 8010 at Stockton, CA 95208 P.S. Docket No. 7/145 07/30/80 Duvall, William A. APPEARANCE FOR COMPLAINANT: Sandra C. McFeeley, Esq.; Consumer Protection Division, Law Department, United States Postal Service, Washington, D.C. 20260 Norman D. Menegat, Esq.; Assistant Regional Counsel, Western Region, United States Postal Service, San Bruno, CA 94099 (-RETURN-) APPEARANCE FOR RESPONDENT: Evelyn Taylor, P. O. Box 8010, Stockton, CA 95208
This proceeding was initiated on February 4, 1980, by the filing of a Complaint alleging that Respondent is engaged in conducting schemes or devices to obtain money or property through the mails by means of false representations in violation of 39 U.S.C. § 3005.
In Count I of the Complaint it is charged, generally, that Respondent's advertising and promotional materials falsely represent that Respondent is seeking to employ agents to handle its outside advertising-mailing work; that the work consists of collecting and mailing envelopes, which will be available to the program participant at no cost; that large and immediate earnings may be expected, specifically that $395 may be earned in a single week and that $25 to $30 will be earned per one hundred circulars stuffed for mailing.
Count II charges that Respondent, using the specific misrepresentations set forth in Count I, is knowingly engaged in a scheme that contemplates the making of misrepresentations by the recipients of Respondent's materials to third parties for the purpose of deception.
By letter dated February 18, 1980, Evelyn Taylor, Respondent, identifying herself as the owner of Tayco Mails, filed an Answer denying the charges and stating that she did not intend to appear at the hearing. In the Answer, Respondent stated, in part:
"The Superior Court in San Joaquin County Nov-75 to March-76 declared the ad which is now being used and was then Legal."
No support for the above statement was submitted.
Since the Respondent had indicated an intent not to appear at the hearing, although a copy of the Rules of Practice setting forth the procedures for requesting a change of place of hearing had been sent to Respondent, Complainant requested leave to present additional exhibits by affidavit and to submit the matter for decision on the record. The request was granted.
With a brief in support of the Complaint, Complainant submitted the following items:
1. An affidavit of Postal Inspector Michael J. McKim, San Francisco Division, U. S. Postal Inspection Service;
2. Exhibit 1, a copy of an advertisement which appeared in the September 26, 1979, issue in the "Help Wanted" column of the "Suburban Press," a newspaper in Orchard Press, New York;
3. Exhibit 2, a circular captioned: "Don't Miss This Chance To Get Started Earning Money" Buffalo, New York, when he responded to Exhibit 1. (Since Tayco Mails is located in the San Francisco Division of the Postal Inspection Service, Inspector Johnson sent this circular (Ex. 2) to Inspector McKim, who received it on November 5, 1979.)
4. Exhibit 3, a 22-page booklet entitled "Secrets of How to Earn Money in Commission Marketing" received November 26, 1979, by Inspector McKim in response to his order of November 9, 1979, and his remittance of $6.40.
5. Exhibit 4, a copy of a sample circular captioned "$25 to $100 Stuffing Envelopes" and Exhibit 5, a copy of a two-page "Certified Offer and Agreement," also received by Inspector McKim on November 26, 1979, from Respondent.
1. Respondent is conducting a scheme through the mail. Respondent is the originator of the promotional materials shown as Exhibits 1 through 5 of the McKim affidavit. Exhibit 1 is a newspaper advertisement in the Help Wanted column used initially to attract attention to the scheme. Although misspelled, it contains the name of Tayco Mails and it gives the address to which a job seeker is to send an inquiry.
In response to Exhibit 1, Postal Inspector Johnson received Exhibit 2, which is a circular signed by Mrs. Evelyn Taylor. Inspector McKim filled out the coupon on Exhibit 2 and sent it with a money order for $6.40 to Tayco Mails. Shortly thereafter he received Exhibits 3, 4 and 5. Exhibit 3 is a booklet "Secrets of How to Earn Money in Commission Mailing" ("Secrets") authored by Floyd Taylor, founder of Tayco Mails. Exhibit 4 is a sample "Dear Homeworker" circular signed by Mrs. Evelyn Taylor and intended to be stuffed in envelopes obtained by the homeworker; and Exhibit 5 is a certified offer and agreement identifying Mrs. Evelyn L. Taylor as the representative of Tayco Mails. Thus, on their face, the promotional materials that are used by the Respondent in this proceeding are published and distributed by the Respondent named herein.
2. In connection with the scheme being conducted, Respondent seeks remittances of money through the mails. The object and purpose of Respondent's entire operation is to obtain money and the mails are the means of accomplishing this objective.
3. The Respondent makes the representations set forth in Count I of the Complaint. The representations charged and the language on which they are based are quoted or cited.
"(a) A participant will earn $25 to $30 per 100 circulars for simple mailing work consisting of stuffing and mailing envelopes."
"$25.00-$30- stuffing envelopes." (Ex. 1)
"Payments of $30.00 Per Hundred Envelopes Stuffed and mailed backed by a Written Guarantee." (Ex. 2, para. 1)
"(b) Respondent urgently needs agents to handle its outside advertising-mailing work."
"Agents to handle our outside advertising-mailing work URGENTLY NEEDED." (Ex. 2, para. 3)
"(c) Employment as a homeworker is offered by Respondent. Exhibit 1 is an advertisement appearing in the Help Wanted column of a suburban newspaper."
"(d) Participants in the program will earn large amounts of money."
"This is your chance to make a lot of money.
One mailer, the first week made $395.00.
This is your chance to make a stack of money." (Ex. 2, p. 2, para. 1)
"(e) A participant will receive 'immediate earnings.' Exhibit 2 in the first paragraph promises 'immediate earnings,' in addition to the program being 'fun,' 'easy,' and 'simple.'"
"(f) A good income may be earned collecting and stuffing envelopes."
"How would you like to make a good income collecting and mailing envolopes?" (Ex. 2, para. 1).
"(g) Pre-addressed and stamped envelopes will be available to the program participant at no cost."
"NO ADDRESSING IS NECESSARY since PREPARED Ads can be used to get HUNDREDS OF ENVELOPES, already addressed & postage-paid for YOU TO STUFF & MAIL; OR SIMPLY attached prepared mailing labels to your envelopes for commission mailing only." (Ex. 2, para. 2)
"(h) If the participant follows Respondent's instructions, sufficient envelopes will be available to allow the participant to earn up to $395 in one week."
"There is no practical limit to the amount you can earn based on the availability of envelopes which depends on YOUR OWN EFFORTS. It's possible for YOU TO EARN UP TO $395.00 IN ONE SHORT WEEK." (Ex. 2, para. 2)
"Your envelopes come in as often as you want them to stuff and send to Tayco Mails . . . . One mailer, the first week made $395.00." (Ex. p.2, para. 1)
4. The representations found to have been made by Respondent are materially false as a matter of fact.
Respondent solicits the remittance of $6 for a "starting kit" by making the representations at paragraph 3(a) through (h) in Exhibits 1 and 2. When the prospective homeworker receives the starting kit, Exhibits 3 -5, he finds that he has been misled by significant omissions as well as misstatements of fact. The starting kit includes "Secrets of How to Earn Money in Commission Mailing," a "certified offer and agreement," and a sample of the Tayco circular to be stuffed in the envelopes the homeworker will collect and mail. In these materials the homeworker learns for the first time that the work offered is far more than collecting, stuffing and mailing envelopes. The work is principally advertising for prospective customers for Respondent's book "Secrets" and requires the homeworkers to seek out newspapers, prepare and pay for advertising, and maintain records of cost and return data. See Exhibit 3, pp. 7 and 13.
Employment is clearly offered by means of Exhibit 1. This impression is enhanced by Exhibit 2, despite the sentence in paragraph 3, "Agents to handle our outside advertising-mailing work urgently needed, apply today." However, when Exhibits 3, 4 and 5 arrive, the homeworker begins to learn that there is no "employment" at all being offered, only a series of opportunities to invest considerable money and effort in dubious ventures of unpredictable income.
Respondent's "offer No. 1" is contained in the certified offer and agreement. The homeworker is instructed to place newspaper advertisements similar to the one he answered. All responsive letters of inquiry containing stamped addressed envelopes should be stuffed with Exhibit 4 and sent in packets to Respondent. Although Respondent agrees to buy the stuffed envelopes for $ .25 each to to reimburse advertising costs costs at a rate to $ .05 per inquiry received, there is no guarantee that there will be any response to the homeworker's ads and, hence, that any of his costs will be recovered.
Earnings of $25 to $30 per hundred are promised for work claimed to be mainly stuffing and mailing circulars. Respondent asserts that as much as $395 may be earned in a single week by this method. However, failing to tell the homeworker that no envelopes will be available for stuffing or for forwarding to Tayco unless considerable money and effort are first expended on newspaper advertising and failing to disclose that the earnings claimed are gross, not net, completely undermine Respondent's claims of easy and high earnings.
5. Respondent's scheme as disclosed herein contemplates the receipt of money through the mail generated by means of false representations made by its representations to third parties.
Respondent's promotional materials, including Exhibits 3 and 4, contemplate, and urge, that Respondent's agents will make misrepresentations to third parties for the purpose of obtaining money by deception. Both Respondent and her agents expect to reap cash income from such activities.
In its certified offer and agreement (Ex. 3, p. 1 and Ex. 5), Respondent suggests the use of similar copy for its agents who obtain customers for "Secrets" (Ex. 5, p. 1):
"$100 weekly possible stuffing mailing circulars for mail order firm I represent send self addressed stamped envelope."
Respondent clearly intends that its own commission mailers use advertising similar to advertisements containing express or implied representations substantially like the ones by which the commission mailers were first attracted to Respondent's scheme (See Ex. 1). The terms of the certified offer and agreement clarify the amount of the commission and method of payment to agents of Tayco Mails. The language leaves no doubt that both Respondent and agent will benefit from the deceptive advertisements.
1. The meaning of advertising representations is to be judged from a consideration of an advertisement in its totality and the impression it would most probably create in ordinary minds. Donaldson v. Read Magazine, 333 U.S. 178 (1948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y., 1957); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y., 1959). It is not necessary that the representations be expressly made or 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 worded 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 Consumer Council, 425 U.S. 748 (1976).
"Advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such was as to mislead." Donaldson v. Read Magazine, supra, p. 188.
2. The average person reading Respondent's advertisements would interpret them substantially as characterized in paragraph (3) of the Complaint.
3. The representations found to have been made by Respondent are false as to material matters of fact.
4. If the homeworker participates in Respondent's program, whether he undertakes to market Respondent's book or items offered by other mail order companies, he must solicit responses by the same deceptive method by which he was taken in. Respondent's offers numbered one through three (Ex. 5) involve the same sort of third party misrepresentation found in Gary Paro et al., P.S. DOcket No. 6/111, Sandco et al., P.S. Docket No. 5/180, and U.S. v. International Terms Papers, Inc., 477 F.2d 1277 (1st Cir. 1973). Respondent seeks money through the mails from persons who respond to the original victim-homeworker's advertisements. At a minimum, Respondent receives a stamped enveloped addressed to each person responding to the victim-homeworker's advertisements. Respondent may also receive half the price of the "Secrets" book from persons who purchase it on the basis of Exhibit 4 from or through Respondent's original homeworker recruit.
5. Respondent is engaged in conducting a scheme for obtaining money through the mail by means of false representations within the meaning of § 3005 of Title 39, United States Code.
An order of the type provided for in 39 United States Code 3005, substantially in the form attached, should be issued against this Respondent.