In the Matter of the Complaint Against: A. B. MEVERS d/b/a ABM FORWARDING, 3724 Boca Chica Blvd., Suite C-1007, Brownsville, TX 78521-4022; Community Mailers, P.O. Box 190, San Benito, TX 78586-0190; ABM Forwarding, P.O. Box 5359, Brownsville, TX 78523-5359; Application Department, P.O. Box 1033, Brownsville, TX 78522-1033 P.S. Docket No. 30/60 11/23/88 Mason, Randolph D., Administrative Law Judge APPEARANCES FOR COMPLAINANT: H. Richard Hefner, Esq., Kenneth F. Innes, Esq., Consumer Protection Division, Law Department, U.S. Postal Service, Washington, DC 20260-1112 APPEARANCE FOR RESPONDENT: A. B. Mevers, pro se, 77 Lakeside South Drive, Los Fresnos, TX 78566-4123
This proceeding was initiated on April 21, 1988, when the Postal Service filed a Complaint alleging that Respondent A. B. Mevers d/b/a ABM Forwarding is engaged in conducting 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. Specifically, the Complaint alleges in paragraph 5 that Respondent falsely represents, directly or indirectly, in substance and effect, whether by affirmative statement, implication or omission, that:
(a) Persons sending the required remittance through the mails to Respondent will typically earn large sums of money in a relatively short period of time.
(b) The initial remittance required to enter Respondent's program is the total amount of money to be expended by the participant.
(c) The amount of income earned by the participant is limited only by the time and effort invested.
(d) The work to be performed by the participant consists primarily of preparing and assembling mailers.
In his Answer, Respondent denies that he made the above false representations or that he otherwise violated the statute. A hearing was held by the undersigned Administrative Law Judge on July 21, 1988, in Brownsville, TX. Complainant was represented by counsel, and Respondent appeared pro se. By stipulation of the parties, the Complaint was amended to add three additional addresses and names under which Respondent does business (Tr. 43). The caption has been changed accordingly. Complainant presented documentary evidence and the testimony of Postal Inspector Larry Christensen and expert witness Richard L. Utecht, Ph.D. Respondent did not testify and presented only documentary evidence. Both parties filed proposed findings of fact and conclusions of law which have been duly considered. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. Based on the entire record herein, including my observation of the witnesses and their demeanor, the exhibits, stipulations, and other relevant evidence adduced at the hearing, I make the following findings of fact and conclusions of law:
1. Respondent A. B. Mevers is an individual who solicits remittances to, and receives mail at the following addresses (CX-1a-c; CX-2; Tr. 38-41, 43):
ABM Forwarding 3724 Boca Chica Blvd., Suite C-1007, Brownsville, TX 78521
Community Mailers P. O. Box 190 San Benito, TX 78586-0190
ABM Forwarding P. O. Box 5359 Brownsville, TX 78523-5359
Application Department P. O. Box 1033 Brownsville, TX 78522-1033
2. Dr. Richard L. Utecht testified for Complainant as an expert in the fields of marketing, advertising, and consumer psychology. His testimony was forthright and credible and tends to corroborate the findings of the Administrative Law Judge regarding the representations in issue and their falsity.
3. Respondent has caused to be published in publications of general circulation a classified advertisement reading as follows: $1000's WEEKLY POSSIBLE
Processing mail at home. Be your own boss and start immediately, with no prior experience necessary. Free supplies/postage. Free information and no obligation, send self-addressed, stamped envelope to: ABM FORWARDING, 3724 Boca Chica Blvd., Suite C - 1007, Brownsville, TX 78521.
(CX-1b-d)
4. Respondent mails to persons responding to the classified advertisements a direct mail circular which solicits recipients to become participants in Respondent's home mailing association by remitting to the same address the amount of $9.00 for the Complete Homemailer's Program (CX-2, 3).
5. In the use of the words "1000's weekly" and "Help solve your money problems. No more worries over inflation, recession, bills, rising gasoline and other costs" and the statement that participants can "begin receiving money within two weeks," Respondent's circular makes representation (a) that a person sending the required remittance will typically earn large sums of money in a relatively short period of time.
6. a. Representation (b), that the $9.00 remittance to enter the program is the total amount of money to be expended by the participant, is clearly implied on the second page of the circular in the sentences "[y]ou will be supplied with the materials to be stuffed. Envelopes will be already stamped and addressed." An extremely careful reader might recognize that the circulars do not actually promise to supply envelopes; they promise only that the envelopes will arrive in a particular form. The ordinary reader, however, would interpret this sentence to mean that if he participates in the Plan, he will receive envelopes as well as materials. In addition, representation (b) is implicitly made in the following language:
"In order to get you started immediately, we must require a one-time fee of only $9.00. This covers our expense in showing you what to do and guarantees you can work with us as long as desired. You will not be required or asked to pay for any additional information or manuals."
(See also Tr. 22).
b. The reference to securing envelopes through classified ads, due to its small print size and location at the bottom of the circular, is likely to escape the attention of the ordinary reader, and is insufficient to overcome the implied representation found above.
7. Representation (c), that the amount of income earned by a participant is limited only by the time and effort invested, is found in the following portions of the circular: "You receive cash daily for the envelopes you stuff. There is no limit. You stuff as many as you wish .... The money you earn is up to you. You can take on whatever amount of business that fits your schedule ..."
8. Representation (d), that the work to be performed by the participant consists primarily of preparing and assembling mailers, is made expressly and impliedly in the following portions of the circular (See also Tr. 21-22): WOULD YOU STUFF ENVELOPES FOR $1000's WEEKLY
$2 for Each Envelope You Stuff ... You receive cash daily for the envelopes you stuff ... You serve a company that pays good commissions to have their circulars mailed ... This work consists mainly of the securing of envelopes ... and simple stuffing"
This representation is also made in the classified ad where the program is initially described as "processing mail" or "stuffing envelopes at home" (CX-1; See also Tr. 20-21)).
9. Persons who remit $9.00 to Respondent in response to the circular receive Respondent's "The Plan -- Complete Homemailers Program" (CX-3). This plan describes two programs in which they may participate:
i. The first program is one in which participants may embark on a promotion duplicating Respondent's by choosing a business name, purchasing rubber stamps for addressing, investing in classified ads such as that set forth in FOF 3, supra, buying mailing lists, setting up a record system, mailing circulars like Respondent's to persons responding to the classified ads, and selling the Complete Homemailer's Program to persons ordering it.
ii. The second program ("$2.00 per envelope") requires participants to place and pay for classified ads inviting inquiries about an envelope stuffing program accompanied by $1.00 and a self-addressed, stamped envelope; to stuff Respondent's circular into the envelopes received (keeping the $1.00); and forward the stuffed envelopes to Respondent who pays $1.00 for each stuffed envelope received from the participant.
10. Representation (a) is false (Tr. 27, 32). Also, the facts set forth under FOF 9, supra, demonstrate the falsity of representations (b), (c), and (d). Both programs require the expenditure of considerable amounts of money over and above the initial remittance (Tr. 22-24, 27, 32). In both programs the amount of income earned is primarily dependent on responses to classified advertisements and the amount of advertising purchased (Tr. 27, 33). Finally, both require far more work than the mere preparation and assembly of mailers (Tr. 23-29).
1. An advertisement must be considered as a whole and its meaning determined in the light of its probable effect on persons of ordinary minds. Donaldson v. Read Magazine, Inc., 333 U.S. 178 (1948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2nd Cir. 1958).
Express misrepresentations are not required. It is the net impression that the advertisement as a whole is likely to make upon individuals to whom it is directed that is important. Even if a solicitation is so worded as to not make an express representation, but is artfully designed to mislead those responding to it, the false representation statute is applicable. G. J. Howard Co. v. Cassidy, 162 F. Supp. 568 (E.D.N.Y. 1958); See also, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976). Where an advertisement is ambiguous or capable of more than one meaning, if one of those meanings is false, the advertisement will be held to be misleading. Rhodes Pharmacal Co., Inc. v. F.T.C., 209 F.2d 382, 387 (7th Cir. 1953); Ralph J. Galliano, P.S. Docket No. 19/15 (P.S.D. May 2, 1985).
2. Applying the foregoing rules of interpretation to Respondent's direct mail circular, I find that Respondent makes the representations alleged in paragraph 5 of the complaint.
3. As found above, representations (a)-(d) are false in fact.
4. The false representations found are material because they tend to induce a reader to part with money in order to participate in the homemailer's program.
5. Respondent is engaged in the conduct of a scheme for obtaining money or property through the mails by means of false representations in violation of 39 U.S.C. § 3005.
6. The attached orders should be issued against Respondent.