In the Matter of the Complaint Against ARCH DISTRIBUTORS, INC. P. O. Box 198 at Stratford, NJ 08084-0198 P.S. Docket No. 10/97; 04/12/83 Cohen, James A. APPEARANCES FOR COMPLAINANT: H. Richard Hefner, Esq. Roderick P. Sullivan, Jr., Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1112 APPEARANCE FOR RESPONDENT: Mary Ann D'Angeli 16 Antietam Drive Laurel Springs, NJ 08021-2812
On March 2, 1983, Complainant filed a "Petition for Mail Stop Order Based Upon Breach of Consent Agreement" in which it alleges that Respondent has breached the terms of a Consent Agreement executed by Mary Ann D'Angeli on March 19, 1981. Complainant alleges that Respondent has breached the terms of the Consent Agreement by sending solicitations in the guise of bills, invoices or statements of account due, which do not contain the disclaimer required by § 123.4 of the Domestic Mail Manual.
In its Petition, Complainant sought the issuance of a temporary detention order against the captioned name and address. On the basis of information attached to the Petition, an Order was issued on March 7, 1983, which authorized the temporary detention of Respondent's mail and granted Respondent a period of 10 days in which to respond to Complainant's Petition. On March 16, 1983, a timely reply was received from Respondent in which it denies it is in violation of the terms of the Consent Agreement. Neither party has requested a hearing. Accordingly, the matter is decided on the record.
1. On January 29, 1981, Complainant filed a Complaint alleging that Respondent was engaged in 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, and by means of solicitations in the guise of invoices which are nonmailable under 39 U.S.C. § 3001(d).
2. In the Complaint, Complainant alleged that Respondent mailed unsolicited circulars to individuals and companies which could be interpreted or reasonably construed as a bill, invoice, or statement of account due. In addition, Complainant alleged that by means of these circulars Respondent falsely represented:
"a. The addressee has authorized the purchase of supplies from ARCH DISTRIBUTORS, INC., or has otherwise previously entered into a contractual relationship with Respondent,
b. The amount set forth on the solicitation is owing and due to Respondent."
3. Complainant and Respondent settled the administrative proceeding by means of a Consent Agreement. On the basis of the Agreement, the proceeding under 39 U.S.C. § 3005 was indefinitely suspended.
4. The Consent Agreement was signed by Mary Ann D'Angeli on March 19, 1981. Paragraphs 1 and 2 of the Consent Agreement provide:
"(1) Respondent will permanently discontinue the practice of mailing solicitations for goods or services which are in the form or may reasonably be construed as bills, invoices or statements of account due under the name set forth in the caption or any other name or names.
"(2) Any document mailed by the respondent in the future which is in fact or may reasonably be construed as a bill, invoice or statement of account due but is in fact a solicitation for the sale of goods or services or both will clearly and conspicuously bear upon its face the disclaimer prescribed by Section 123.4 of the United States Postal Service Domestic Mail Manual."
5. On or about May 15, 1981, Respondent sent to Wayne County News Publishing Company an invoice showing a total amount due of $229.25 for "405 DC Extra Heavy-Refuse Poly-Liners Special - PT." (Pet. Exs. C-2 & 3). Thereafter, a reminder notice was sent to Wayne showing the amount of the invoice to be past due (Pet. Ex. C-1). On October 13, 1981, Respondent sent a statement of account due to Wayne, which advised that if payment was not made or the merchandise returned, further collection action would be taken (Pet. Ex. C-4). None of these solicitations included the disclaimer prescribed by § 123.4 of the Postal Service Domestic
Mail Manual. Wayne returned the statement of account due on October 19, 1981, with the following note typed at the bottom (Attach. to Resp. Reply):
"This is to state that we have not ordered ANYTHING from this company. None of our employees have ordered anything and we have not received anything from ARCH DISTRIBUTORS. We have this day turned all papers over to postal authorities.
Walter H. Hurt, III
General Manager"
6. On August 3, 1981, Respondent sent to Accurate Litho & Printing Co., Inc., a solicitation in the form of a bill which showed a total amount of $195.75 for "2424-WR/2M WastebasketRefuse Poly-Liners-Reg" (Attach. to Resp. Reply). In prominent lettering on the face of the solicitation it was stated:
"This is not a bill. This is a solicitation; you are under no obligation to pay unless you accept this offer."
A statement of account due was sent to Accurate on November 3, 1982, advising that there is a past due amount of $195.75 and that if payment is not made or the merchandise returned further collection action would be taken (Pet. Ex. D-1). This statement of account due did not contain a disclaimer. Accurate responded in a letter dated November 18, 1982, to Respondent's controller as follows (Pet. Ex. D-2):
"Upon receipt of your letter of November 3, 1982, threatening a law suit for collection of a past due account, I attempted to call you by telephone and was informed that your phone has been disconnected.
"Our records show that we never ordered anything from your company, and therefore owe you nothing.
"In the meantime, I am sending a copy of your letter to the postal inspector in New Jersey as this whole matter seems to be a case of using the mails to defraud.
Sincerely,
ACCURATE LITHO & PRINTING CO.
By: Arthur D. Richter"
7. An invoice was sent to Campbell Lodge on October 1, 1982, seeking payment of $222.50 for "405-DC Extra Heavy-Refuse Poly-Liners special - PT" (Pet. Ex. E-1). A reminder of past due account was sent to Campbell on October 29, 1982 (Pet. Ex. E-2).
Neither the invoice nor the notice of past due account contained the disclaimer prescribed by § 123.4 of the Domestic Mail Manual. The present owner of Campbell Lodge has never ordered merchandise or heard of Respondent (Pet. Ex. E-3).
8. The Postal Service has received complaints from Wayne, Accurate and Campbell concerning solicitations from Respondent. The exhibits which have been previously referenced as Petition Exhibits were forwarded to a Postal Inspector during the course of his investigation of these complaints (Pet. Ex. G).
9. Respondent's solicitations seek remittances to Arch Distributors, P. O. Box 198, Stratford, New Jersey 08084. This is the same name and address as is contained in the caption of the original Complaint and the Consent Agreement. Post office box 198 has been continuously rented since July 14, 1979, by Mary Ann D'Angeli, the signatory of the Consent Agreement (Pet. Exs. F & G).
Respondent argues that Wayne and Campbell had previously purchased merchandise from it and therefore the solicitations were not required to include a disclaimer. While Accurate was a first time purchaser, Respondent contends the required disclaimer was included on the initial solicitation sent Accurate and that it is included in solicitations sent to first time purchasers. Further, with respect to Wayne, Respondent argues that the account was open and active and that the merchandise was sent to Wayne and not returned. Respondent argues that the merchandise was also sent to Accurate and not returned and that the order was confirmed by telephone. The Campbell order, according to Respondent, was not confirmed because Campbell had previously been a customer of, and ordered merchandise from, Respondent.
The evidence establishes that Respondent sends solicitations in the form of invoices and/or statements of account due to prospective purchasers who have not ordered the merchandise for which they were billed. Except for one solicitation sent to Accurate, the disclaimer required by the terms of the Consent Agreement was not included on the solicitations. The requirement to include the disclaimer was not eliminated because certain of the recipients had previously ordered merchandise from Respondent. Moreover, the subsequent delivery of the merchandise does not absolve Respondent from the violation which it had already committed by sending the solicitations without disclaimers. Finally, although Respondent contends that Accurate's order was confirmed by telephone, Accurate's letter of November 18, 1982, stating that it had never placed an order with Respondent is persuasive that it had not ordered the merchandise for which it was billed.
Accordingly, it is concluded that Respondent has breached the terms of the Consent Agreement. Pursuant to paragraph 4 of the Consent Agreement, an Order under 39 U.S.C. § 3005 is being issued with this Decision.