In the Matter of the Complaint Against

 GLORIANNA R. GIUMARRA a/k/a CREDIT ASSOCIATION OF AMERICA
 8140 Walnut Hill Lane,
 Suite 501
 at Dallas, TX 75231-9990

 P.S. Docket No. 19/43;  
 
 07/03/84
 
 Duvall, William A.  

 APPEARANCES FOR COMPLAINANT:
 H. Ric hard Hefner, Esq.
 Alan B. Ostroff, Esq.
 Law Department
 United States Postal Service
 Washington, DC 20260-1112

 APPEARANCES FOR RESPONDENT:
 D. Mark Elliston, Esq.
 Glorianna R. Giumarra, only:
 Don G. Horton, Esq.
 2000 Americas Tower,
 LB 130 2323 Bryan Street 
 Dallas, TX 75201-2628

In a Complaint filed on April 13, 1984, the General Counsel for the United States Postal Service, Complainant, filed a Complaint in which it is charged that Glorianna R. Giumarra doing business as Credit Association of American, Dallas, Texas, is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations within the meaning of Section 3005 of Title 39, United States Code.

Complainant alleges that in advertisements appearing in nationally distributed periodicals Respondent invites the readers to call a toll-free number to get information about credit cards. (C-13, Appendix A hereto) Persons who call are asked for their names and addresses. There are then sent to the callers, among other things, a form letter bearing the salutation "Dear Future Cardholder" (Ex. C-14 attached hereto as App. B), and a "Credit Information" form on which the caller is to furnish information under such captions as Credit cards Desired, Department Stores, Automobile, Credit History and Personal Information. (Ex. C-15, attached hereto as Appendix C) In Appendices B and C, the Respondent asks for the remittance of money through the mail.

The Complainant alleges that in these forms, as well as other materials similar thereto, the Respondent expressly or impliedly makes the following representations:

(a) Persons sending the required remittance through the mails to Respondent and furnishing the information required on the credit card application are assured of receiving valid credit cards, particularly Visa and Mastercard.

(b) Respondent will furnish all applicants with valid credit cards --particularly Visa and Mastercard --irrespective of the applicants' credit experience, credit history or income.

(c) All applicants who fill out the credit card application and make the required remittance to Respondent will be accepted by member banks as valid Visa and Mastercard credit card holders.

Complainant alleges that these representations are materially false as a matter of fact, and asks for the issuance of a mail-stop order and a Cease and Desist Order, suggested forms of both of which were attached to the Complaint.

Service of the Complaint and Notice of Answer and Hearing was had on May 1, 1984.

On May 11, 1984, under the caption

"IN THE MATTER OF THE COMPLAINT AGAINST

GLORIANNA GIUMARRA

d/b/a CREDIT ASSOCIATION OF AMERICA

8140 Walnut Hill Lane, Suite 501

Dallas, Texas 75231" there was filed a document captioned "RESPONDENT'S ORIGINAL ANSWER." In this Answer it was pleaded as follows:

"NOW COMES, GLORIANNA GIUMARRA, Respondent in the above styled cause and denies each every, all and singular the allegations contained in the Complaint filed in this action. Specifically, Respondent denies the alleged facts and allegations in the Complaint as follows:" (There follows a special denial of each separate paragraph of the Complaint, and a request that the relief sought by the Complainant be denied.) The Answer is signed "Glorianna Giumarra."

Complainant called three witnesses. The first witness was Fred J. Edwards, Grand Prarie, Texas. Mr. Edwards is an IBM operator. Mr. Edwards saw Respondent's advertisement in The National Enquirer (App. A) and called for toll-free number shown in the ad. The person answering the call took Mr. Edwards' name and address, and, shortly thereafter, he received Appendix B from

Credit Association of America, 8140 Walnut Hill Lane, Suite 501, Dallas, TX 75231. This letter bears the facsimile signature and typed name "John L. Hutton" over the name "Credit Association of America." In the same envelope, also, was Appendix B, and, in the letter, Mr. Edwards was asked to "return the Information Application and your $35 fee." (Tr. 7)

After reading Appendices B and C, it was Mr. Edwards' belief that when he had supplied the requested information and remitted the required fee he would receive the credit cards he had ordered. (Tr. 8) Although Mr. Edwards complied with the above instructions, he received nothing. (Tr. 9)

Richard E. Frink, Waco, Texas, also saw Respondent's advertisement in The National Enquirer (Ex. C-16, identical to App. A); called the toll-free number and gave his name and address. Thereafter, Mr. Frink received the "Dear Future Cardholder" letter and the "Credit Information" form. (Tr. 10-11; Exs. C-17 and C-18, identical, respectively to App. B and C) Since he did not want the "'gold' check cashing card" advertised in Ex. C-16, he remitted $25 to Respondent. (Ex. C-20)

After reading the advertisement, the "Dear Future Cardholder" letter, and after making the remittance, Mr. Frink, too, believed that there were no further steps that he had to take, and that he would receive from Respondent the Visa and other cards he had ordered. (Tr. 12) He returned the document and remittance on March 6, 1984. (Ex. C-18)

After ten days elapsed, and, having received nothing from Respondent, Mr. Frink, on March 16, 1984, wrote to Credit Association of America asking for the credit cards he had ordered or for the refund of his money. (Tr. 13; Ex. C-20) On the "Credit Information" form sent to Respondent by Mr. Frink, there is a notation in the lower right-hand corner of this exhibit, C-18, that reads as follows: "Sent refund Mar. 15." The notation does not, without further authentication, mean that the refund was made. However, the fact that a refund is offered or that a refund actually is made does not negate the existence of a scheme within the meaning of 39 United States Code § 3005, because it is the earlier misrepresentation by means of which the money is obtained through the mail against which that provision of law is directed. Borg-Johnson Electronics, Inc. v. Christenberry, 169 F. Supp 746, 751 (S.D.N.Y. 1959); G. J. Howard v. Cassidy, 162 F. Supp. 568, 572 (E.D.N.Y. 1958); Farley v. Heininger, 105 F. 2d 79, 84 (D.C. Cir. 1939)

In another case, P.S. Docket No. 19/36, Initial Decision June 28, 1984, there are exhibits (Ex. C-2 and C-4) that are similar in import to Appendices B and C in the instant case. By that statement it is meant that in the "Dear Future Cardholder" letter used by the Respondents in both cases, the reader is lulled into believing that his past credit history is no barrier to his obtaining Visa, Mastercard, and other credit cards; that by dealing with the Respondents and making the required remittances and supplying the requested information, the desired credit cards and the check guarantee cards can be acquired. In both cases the readers hopes are turned into disappointments because of the failure to receive credit cards and, in some cases, the failure to receive refunds.

In the instant case, Mr. Norman Tate, Vice President of the Northpark National Bank, Dallas, Texas, in charge of the Credit Card Division, who testified as an expert witness in P.S. Docket No. 19/36, was asked whether, if the sales pitch in this case was similar to that used in Docket No. 19/36, his opinions as to whether such sales representations were true or false would be similar to those he expressed in Docket No. 19/36. Mr. Tate said that they would. Mr. Tate's qualifications are restated to show that his views are entitled to great weight. Some of his views in Docket No. 19/36 are restated here because their applicability is readily apparent.

Mr. Tate has had a long and varied experience in the credit field. Prior to his present position, he was employed by Preston State Bank in Dallas in their credit card division for 15 years. He has been President of the Dallas Credit Manager's Association; he was credit manager of Volks Department Store for four years; and he was for six years collection manager of Neiman-Marcus in Dallas. Mr. Tate estimated that over 100,000 credit applications have been processed directly by him or under his supervision. He received a Bachelor of Science degree in textile engineering from North Carolina State College, Raleigh, North Carolina, in 1951.

Mr. Tate stated that there is an inherent misrepresentation in the language used by Respondent in Appendices A and B. (App. B and C in this case) Both documents encourage - in fact, urge - readers to fill out and return the "Credit Information" application. Persons who apply on the basis of Respondent's sales literature would expect to receive credit in the form of either check guarantee cards or credit cards. The misrepresentation consists of telling the reader of App. A and B (here, B and C) that Respondent assures him of the issuance to him, by Respondent or someone else, of one or more credit cards regardless of his credit history. This statement is simply a commitment which can not be kept. Mr. Tate said that on the basis of his experience, to any prudent bank or any financial institution, the most important factor in the determination of the granting or denying of a credit application is the credit history of the individual applicant.

It has been pointed out earlier herein that the Complaint was served on May 1, 1984, and that the Answer was filed on May 11,

1984. In the Answer, signed by Ms. Giumarra, the Complaint was denied generally, and this was followed by a special denial, paragraph by paragraph of every specific allegation.

It then became the burden of the Complainant to prove by the preponderance of competent, credible and probative evidence that Ms. Giumarra was, or had been engaged in conducting the scheme charged in the Complaint.

The alleged wrongdoing by Ms. Giumarra upon the basis of the requisite evidence was not established. There was no evidence of an interview of this Respondent, there was no evidence of the existence of an assumed name certificate under which this Respondent was doing business. No witness was asked any question about Ms. Giumarra or volunteered any statement about her. Her name does not appear on any of Complainant's exhibits, or elsewhere, except in formal pleadings or papers, and at page 4 of the transcript when Counsel entered their appearances on her behalf.

Accordingly, the Complaint in this proceeding is hereby dismissed for want of proof insofar as it relates to Glorianna R. Giumarra.

It has been pointed out that the name "John L. Hutton" appears as the writer of Appendix B. Mr. Hutton, however was not named as a Respondent.

Since the Complaint is still viable as to Credit Association of America, and because no answer has been filed on its behalf, this matter is referred to the Judicial Officer for such action as he may deem appropriate under § 952.11(a) of the Rules of Practice (39 CFR § 952.11(a)).