In the Matter of the Complaint Against

 ELITE PUBLISHING SERVICE ELITE
 P. O. Box 454
 at Lynbrook, NY ll563

 P.S. Docket No. 13/90;  
 
 02/09/83
 
 Cohen, James A.  

 APPEARANCES FOR COMPLAINANT:
 Hilda Rosenberg, Esq.
 Brendan J. O'Brien, Esq.
 Consumer Protection Division
 Law Department
 United States Postal Service
 Washington, DC 20260-1100

 APPEARANCE FOR RESPONDENT:
 Charles D. Maurer, Esq.
 565 Fifth Avenue
 New York, NY l0017

On October 18, 1982, Complainant filed a "petition for Interim Mail Detention Order and Mail Stop Order" alleging that Respondent has breached the terms of a Consent Agreement executed on its behalf by Alice Palmer on June 3, 1982. specifically, Complainant alleges that Respondent has failed to comply with the requirements of paragraphs l0 and 11 of the Consent Agreement.

Pursuant to paragraph 12 of the Consent Agreement, the interim detention order sough by Complainant was issued pending resolution of the issue raised by the Petition. On November 9, l982, Respondent filed a timely reply to the Petition which was in the form of an affidavit of Alice Palmer. The reply opposes the issuance of the orders sought by Complainant. Both Complainant's Petition and Respondent's affidavit attached copies of Respondent's advertising materials and other documents to support the respective positions of the parties. Additional documents were filed by the parties thereafter and included as part of the record.

The enterprise which is the subject of the Consent Agreement and the present petition for Breach involves the sale of information regarding signature loans by mail. Specifically, Respondent places classified advertisements in periodicals advising of the availability of signature loans (CX 71). Those who inquire are then sent a cover letter describing Respondent's service (RX Al), an information sheet on borrowing by mail (RX A2), and an order form for the loan application data which requires the enclosure of $10 (RX A3). Those who remit payment are sent a number of different materials relating to loans, including a "special source directory" containing the names and addresses of l0l finance companies, a signature loan application and a list of firms which allegedly provide loans without collateral or co-signors (RX Bl-12).

In paragraphs l0 and ll of the Consent Agreement Respondent agreed that:

"l0. If Respondent represents in its advertising materials, that it will provide customers with information regarding a specific number of lenders, then Respondent must follow the procedure set forth in paragraph ll regarding only those lenders. If, however, Respondent fails to specify the number of lenders to be provided, the procedure must be followed with regard to every lender provided to the customer.

"ll. Respondent will inquire of every lender whether it, in fact, provides signature loans by mail and whether it will consider persons referred by Respondent for such loans. Respondent will initiate this inquiry on the effective date of this agreement and every six months, thereafter. Respondent will secure a written response to this inquiry from each lender it surveys, which will be furnished to the U. S. Postal Service, upon its request. Respondent will not include in its product the name of any lender who

(a) has indicated that it does not provide signature loans by mail; and/or

(b) has indicated that it will not consider for such loans persons referred by Respondent; or

(c) has failed to respond in writing to Respondent's inquiry, described herein."

Complainant contends that Respondent has failed to furnish the survey results to the "U.S. Postal Service, and furthermore has not excluded those lenders which do not provide signature loans by mail or which do not provide such loans to persons referred by Respondent or who have or would have failed to respond to Elite's inquiry, if it had, in fact, conducted one." Complainant concedes that Respondent has furnished it the name of one lender who affirmatively responded to the required survey (CX 14, 15). However, it argues that Respondent's August 1982 promotional materials (CX 16-24) represented that "a listing of over l00 different lenders" would be provided customers and that Respondent's "loan source program" supplied to customers included two lenders listed and a "Special Source Directory" naming l00 lenders (CX 25-37d). Thus, Complainant asserts that since the promotional materials promised the names of l00 lenders, Respondent was to have surveyed at least that number pursuant to paragraph l0 of the Consent Agreement. Complainant further argues that while Respondent has recently deleted mention of l00 lenders (CX 41-44) from its advertising materials, it did not thereby escape the requirements of paragraph 11 since the information furnished to customers still includes these lists (CX 39; Resp. Aff. para. 5; RX Bl-12). finally, pointing to its own survey of organizations listed on the two lender lists sent to customers, Complainant states that of 37 listed loan sources surveyed, only three indicated that they provide signature loans by mail( CX45-70).

Respondent does not dispute the applicability of the Consent Agreement to its advertising materials or the content of its prior and present materials. It also does not dispute that it furnished Complainant the survey results of only open lender.

Respondent does not address the argument that its August 1982, promotional materials promised the names of l00 lenders. With regard to its revised advertisements, Respondent contends that the Consent Agreement has not been breached because, under paragraph l0, a survey need only be conducted for the number of lenders specified in its promotional materials. It reasons that since its revised promotional letter (RX Al) states that an "application for a Signature loan" will be received, th customer is advised that he will only be supplied the name of one lender. In this regard, Respondent argues that the two lists of additional lenders furnished to customers merely constitute a "bonus." Therefore, it maintains that it has complied with the language of the Consent Agreement by providing the Postal Service with the survey results from one lender. Nonetheless, Respondent states it is prepared to withdraw the two lists of lenders from distribution (Resp. Aff. para. l6). Finally, Respondent argues that the mail detention order is too harsh and requests that it be vacated or, in the alternative, that it be modified so that it applies only to the application for the loan data packet received by customers,and not to mail related to initial inquiries regarding Respondent's services.

The received establishes that Respondent has breached the terms of the Consent Agreement. After the Consent Agreement became effective, Respondent distributed advertising circulars and order forms which specifically represented that customers world received the names of over l00 different lenders (CX 16, 20 & 21). Its failure to conduct a survey of all names furnished constitutes a breach of paragraphs l0 and ll of the Consent Agreement.

Respondent's use of its revised advertising materials also constitutes a breach of the Consent Agreement. The totality of the informational materials sent to prospective customers would lead the ordinary reader to conclude that the names of more than one lender would be furnished. for example, a sheet captioned "You Can Borrow By Mail In Confidence" (RX A2) inquires "Are these Finance Companies new in business?" and answers "no, some have been in business almost a hundred years and are some of the largest in the world" (emphasis added). The language of Respondent's promotional letter which states that an "application for a Signature loan" will be furnished to a customer does not detract from this conclusion. As Complainant argues, a customer could reasonably conclude that only one application is necessary for consideration by the various lending institutions. Accordingly, it is concluded that these promotional materials do not represent that the name of only one lender would be furnished. Therefore, the survey requirements of paragraphs l0 and ll of the Consent Agreement are applicable to the names of all enders included with Respondent's loan information package. As

Complainant asserts, under the terms of the Consent Agreement, the survey requirement applies to the names of all enders furnished, regardless of whether these names are deemed by Respondent to be a "bonus."

Contrary to Respondent's contention, the interim mail detention order is not overly broad because it relates to initial inquiries regarding Respondent's services. Respondent's solicitation for the initial inquiries is an integral pat of the enterprise which has been found to be in violation of the Consent Agreement.

Since it has been found that Respondent violated the terms of the Consent Agreement, a False Representation Order is issued herewith.