In the Matter of the Complaint Against

 CONSOLIDATED RELIANCE AGENCY or CRA Postal Unit
 17403 North Broadway Station at
 San Antonio, TX 78217

 P.S. Docket No. 8/21;  
 
 05/08/80
 
 Grant, Quentin E.  

 APPEARANCE FOR COMPLAINANT:
 Kris tin L. Malmberg, Esq.
 H. Richard Hefner, Esq.
 
 Consumer Protection Division
 Law Department
 United States Postal Service
 Washington, D.C.  20260

 APPEARANCE FOR RESPONDENT:
 James J. Robertson, Esq.
 Richardson, TX 75080
 Jack Leon, Esq.
 Sol Casseb, III, Esq.
 San Antonio, TX 78205

In a Complaint filed on March 24, 1980, Complainant alleges that Respondent is engaged in the conduct of a scheme for obtaining money through the mails by means of false representations in violation of 39 U.S.C. § 3005.

The specific allegations of false representation are set forth below in the Findings of Fact.

Respondent filed an answer to the Complaint denying all the allegations therein. It also asserted eight affirmative defenses which amount to motions to strike the Complaint before hearing. These motions were denied in my Order of April 24, 1980. Those denials are hereby reaffirmed and incorporated herein by reference.

At Respondent's request the location of the hearing was changed from Washington, D.C. to San Antonio, Texas. The hearing was held on May 1, 1980.

The parties have filed proposed findings of fact and conclusions of law all of which have been considered. They are granted to the extent indicated and otherwise denied.

1. Respondent is engaged in a scheme to obtain money or property through the mails (Tr. 11-16; CX-1(a)).

2. Respondent conducts its scheme by means of direct mail circulars sent to names purchased by Respondent from various direct mail companies (CX-1(a); Tr. 55).

3. Respondent's advertising circular (CX-1(a)) makes the representations alleged in paragraphs VII (a) through (d) of the Complaint, quoted and underscored below, in the wording quoted from its circulars following each allegation.

(a) Consolidated Reliance Agency will provide employment to those responding to the advertisements.

"It is an honest offer to you to go to work for us"

"DO NOT CONFUSE THIS OFFER OF EMPLOYMENT BY CONSOLIDATED WITH SOME ENVELOPE STUFFING SCHEME"

(b) The employment provided by Consolidated Reliance Agency consists solely or primarily of addressing envelopes.

"CONSOLIDATED WILL PAY YOU $370.00 PER THOUSAND FOR ENVELOPES MAILED ACCORDING TO OUR SIMPLE INSTRUCTIONS."

"Your work consists of processing mail according to instructions ... You can do the addressing by hand if you like."

(c) The "employee" will be compensated solely or primarily for addressing envelopes.

"You will not be required to do any certain amount of work. You can mail as many as you are able to mail. *** When you get to the point where you can process 1000 envelopes a week, you will get a check from the Home Office for $370.00. It's just that simple."

(d) The only expense to the "employee" will be the $10 for the "Homeworkers Starter Instruction Materials."

"We pay for all postage and shipping expenses."

"The small deposit and application fee is the only money that you will ever have to pay to CRA."

4. The representations found above are false in fact for the reasons set forth under each of such representation quoted and underscored below.

(a) Consolidated Reliance Agency will provide employmentto those responding to the advertisements.

When the consumer receives the "CRA Homeworkers Starter Instructions" booklet, he discovers that the work will not be employment by CRA, but will be "securing envelopes by running classified ads" (CX-2C, p. 2; Tr. 21, 23, 28, 29, 40). These envelopes are then sold to Respondent by the homeworkers (CX-2C, p. 14). Homeworkers are told to handle the tax questions themselves; CRA does not treat them as employees and deduct taxes. Readers of the booklet are told that CRA cannot secure the envelopes themselves or hire enough employees to process them (CX-2C, p. 6). The homeworkers are not employees of Respondent.

(b) The employment provided by Consolidated Reliance Agency consists solely or primarily of addressing envelopes.

Homeworkers are instructed to run classified ads which invite people to send for more information. Envelopes received by homeworkers in response to such ads are then sent to CRA and the homeworker is paid for the number of envelopes secured. The instruction booklet says "Your only concern is securing envelopes ..." (p. 2). Homeworkers are not employed by CRA to address envelopes. Addressing envelopes is merely incidental to the program, in that to mail to CRA the envelopes received in response to classified ads the homeworkers must address an envelope.

(c) The "employee" will be compensated solely or primarily for addressing envelopes.

The homeworker is paid by the number of "secured" envelopes he sends to CRA to be purchased by CRA. The homeworker is not paid for addressing envelopes (CX-2C, p. 2).

(d) The only expense to the "employee" will be the $10 for the "Homeworkers Starter Instruction Materials."

The homeworker is told to purchase classified advertisements to attempt to induce inquiries by other people looking for work in the home (CX-2C, p. 2, 6). He is told if he has no spare funds, to wait until he does have spare funds (p. 6). He is also told to have stationery printed (p. 6). All of these expenses involve extra money to be spent by a person who thought he would be employed by Respondent and have all materials provided (Tr. 21, 29).

5. Such false representations are material because they tend to induce readers thereof to pay money to Respondent for employment.

1. The meaning of advertising representations is to be consi- dered in light of the probable impact of the entire advertisement on the person of ordinary mind. Donaldson v. Read Magazine, 333 U.S. 178, 189 (1948); Peak Laboratories, Inc. v. United States Postal Service, 556 F.2d 1387, 1389 (5th Cir. 1977); Unique Ideas, Inc. v. U. S. Postal Service, 416 F. Supp. 1141, 1145 (S.D.N.Y., 1976).

2. The average person reading Respondent's advertisements would interpret them substantially as characterized in paragraph VII, subparagraphs (a) through (d) of the Complaint.

3. Complainant has established its case by a preponderance of the reliable and probative evidence of record. S.E.C. v. Savoy Industries, 587 F.2d 1149, 1168 (D.C. Cir. 1978); S.E.C. v. National Student Marketing, 457 F. Supp. 682, 701 n. 43 (D. D.C., 1978); Wilmont Products, P.S. Docket No. 6/46 (P.S.D. 1979); Gard, Jones on Evidence, § 30:4 (1972); Wigmore, Evidence, § 2498 (ed ed. 1940).

4. A promise to refund if a customer is dissatisfied will not dispel the effect of false advertisements. Farley v. Heininger, 105 F.2d 79 (D.C. Cir. 1939); Borg-Johnson Electronics, Inc. v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. 1959).

5. An element of religion in a promotion does not create a constitutional privilege which will protect against a charge of fraud. Fields v. Hannegan, 162 F.2d 19 (1947).

6. The representations specified in paragraph VII, subpara- graphs (a) through (d) of the Complaint are materially false in fact.

7. Respondent is engaged in the conduct of a scheme for obtaining remittances of money through the mails by means of materially false representations in violation of 39 U.S.C. § 3005.

8. An order pursuant to 39 U.S.C. § 3005 in the form attached should be issued against Respondent.