November 23, 1990
In the Matter of the Complaint Against
NATIONAL SCHOLASTIC RESOURCES
ADMINISTRATION, INC.
6046 Cornerstone Court West
Room 202
San Diego, CA 92121-4733
ACADEMIC COUNCIL ON FINANCIAL ASSISTANCE
at
1133 15th Street N.W., Suite 1220
Washington, DC 20005-2792
and at
P.O. Box 18198
Washington, DC 20077-5715
and at
7576 Trade Street
San Diego, CA 92121-2412
ACADEMIC COUNCIL ON FINANCIAL ASSISTANCE
Western Region Division
at
P..O. Box 80967
San Diego, CA 92138-9433
and at
P.O. Box 90609
San Diego, CA 92109-0142
MICHAEL POUSTI
6046 Cornerstone Court West #202
San Diego, CA 92121-4733
RAMIN NIAKIANI
P.O. Box 779
La Jolla, CA 92038-0779
P.S. Docket No. 35/140
APPEARANCES FOR COMPLAINANT:
Elizabeth P. Martin, Esq.
Timothy J. Mahoney, Esq.
Consumer Protection Division
Law Department
Washington, DC 20260-1144
APPEARANCES FOR RESPONDENTS:
William J. Olson, Esq.
John S. Miles, Esq.
Gilman, Olson & Pangia
1815 H Street, N.W. #600
Washington, DC 20006-3693
POSTAL SERVICE DECISION
Respondents have appealed from the Initial Decision of an Administrative Law Judge which holds that Respondents are engaged in a scheme or device to obtain money through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.
BACKGROUND
The Consumer Protection Division, Law Department, United States Postal Service (Complainant), initiated this proceeding by filing a Complaint, subsequently amended, alleging that by means of direct mail solicitations and information subsequently provided over the telephone, Respondent, National Scholastic Resources Administration, Inc., doing business under the name of Academic Council on Financial Assistance, made materially false representations with respect to the sale of scholarship information. The same charges were made against Respondents Michael Pousti, as president and as a director of the corporate Respondent, and Ramin Niakiani, as secretary and as a director of the corporate Respondent. The specific alleged false representations as set forth in paragraph 12 of the amended Complaint are as follows:
(a) Academic Council on Financial Assistance is a government agency or is affiliated with the government;
(b) Academic Council on Financial Assistance directly provides [i.e. acts as a conduit for] scholarships or grants to students;
(c) Academic Council on Financial Assistance receives funding for scholarships from the National Scholastic Resources Administration;
(d) National Scholastic Resources Administration is a government entity or is affiliated with the government;
(e) Both Academic Council on Financial Assistance and National Scholastic Resources Administration maintain offices in Washington, DC which are staffed and which provide the services described in Respondents’ solicitations;
(f) Academic Council on Financial Assistance directly submits applications to scholarship sources on behalf of students;
(g) A person who utilized the Academic Council on Financial Assistance’s service was awarded a $10,000 grant;
(h) The minimum amount of a scholarship or grant which a person who submits an application and payment to Academic Council on Financial Assistance will obtain is $300;
(i) Submission of the documentation and fee as directed to the Academic Council on Financial Assistance constitutes an application for academic financial assistance;
(j) The Academic Council on Financial Assistance is composed of or advised by a group composed of individuals associated with the academic community, i.e., professors, financial advisors, academic financial counselors.
In the Answers, as amended, Respondents admitted the allegations of the Complaint that National Scholastic Resources Administration (“NSRA”) did business as Academic Council on Financial Assistance (“ACFA”); admitted that NSRA, d/b/a ACFA leases offices and receives mail in Washington, DC; admitted that Michael Pousti and Ramin Niakiani are officers and directors of NSRA and are responsible for the day-to-day administration of NSRA; admitted that NSRA offered to sell a service through the United States mail; and admitted that certain exhibits attached to the Complaint constituted copies of their offering. They denied that the solicitations used can be summarized as alleged in paragraph 12 of the Complaint and denied that any representations made in their advertisements were materially false. Respondents Pousti and Niakiani each denied that he individually or exclusively exercises control over NSRA’s activities. The individual Respondents thus filed a Motion to Dismiss the Complaint against them. The Motion to Dismiss was denied by Order of the Administrative Law Judge.
Respondents initial solicitation consisted of a letter to a student or parents of a student. The letter advised of the availability of scholarship funds regardless of financial status or academic performance. The recipient was advised that to receive an application and information a certain toll free telephone number should be called. The solicitation’s letterhead read “ACADEMIC COUNCIL ON FINANCIAL ASSISTANCE.” An address of 1133 15th St., N.W., Washington, DC 20005-2792 was shown. The letterhead also contained a circular logo, or insignia, in which was inscribed around the circumference “Academic Council on Financial Assistance.” Inside the inscription an eagle was depicted with its wings spread downward. The bottom of the letter contained the statement “ACFA is made possible through funds from the National Scholastic Resources Administration, Washington, DC.”
Respondents thereafter would send applications to students who had requested them utilizing the toll-free telephone number. The applications asked for the student’s personal, educational and background information, as well as information pertaining to the students’ parents. The student was advised to fill out the application and mail it along with a payment of $60 to ACFA. The cover letter for the application contained the same letterhead as the initial solicitation letter. The letter advised the student to fill out the application completely “so we can match for you as many sources as you qualify for.” The letter further stated that “The search process is based on the selection criteria;” that “…your selection of resources will be based on your entry;” and that “the more complete information you provide, the better the chances of receiving the most awards available.” The applicant was advised that the processing fee of $60 would be returned “if, for any reason, a scholarship is not secured.”
The two page application contains areas for the student to provide information pertaining to grade point average, religion and race, course majors and minors and goals. Above the signature line the following language appears, “I understand that I am to receive a full refund of my processing fee if the Council does not secure funding for me….” The student is further advised that “providing misinformation may result in mandatory repayment of the scholarship and/or award.”
Respondents thereafter added a guarantee letter to its solicitation package. The letter was addressed to “Participating student” and in more elaborate detail advised the student that the processing fee would be returned if at least one award or scholarship was not obtained.
Respondents subsequently prepared a color brochure containing the same type of information included in the earlier letters. The color brochure thereafter was used by Respondents to promote their scholarship offering. The brochure contained the Washington, DC address and the logo with the eagle. The brochure advised the students that “ACFA can provide you with these valuable but often overlooked scholarship sources and ensure you the ability to receive the funds necessary for your college education.” It further advised “A student will receive between five and twenty-five specific scholarship sources.” It also stated “All you need to do is fill out the enclosed application.” The last paragraph of the brochure contained the statement “Since ACFA is not state or government funded, ACFA does charge a $60 processing fee.”
A few weeks after a student applied for Respondents’ service he or she would receive a list of possible scholarship sources with addresses. The student thereafter was required to contact each source, obtain scholarship application papers, fill out the applications, and file them with each source.
At a hearing before an Administrative Law Judge Complainant presented the testimony of five witnesses; Postal Inspectors Thomas Krautheim and Richard Schlueter who testified as to their investigation of Respondents’ offering; and three university students, James Marks, Brenda Buck and William Blanford, all of whom purchased Respondents’ services. Respondents also presented the testimony of five witnesses. The first was Michael Rutter, the Director of Student Financial Services at the University of California at San Diego, who testified as an expert in college financial aid. His testimony pertained to his observations of Respondents’ operations and to university scholarship procedures and services and student awareness in this area. Respondents also presented the testimony of Respondent Michael Pousti, who described the method of operation of the corporate Respondent. Two college students, Angela Sheffey and Kristin O’Connell, who had utilized Respondents’ services testified on behalf of Respondents, as did William Swartz, the parent of a participating student.
Following the hearing and after the parties had filed proposed findings of fact and conclusions of law, the Administrative Law Judge issued an Initial Decision in which he found that Respondents made the following materially false representations set forth in paragraph 12 of the amended Complaint: subparagraphs a, d, e [partially], f, g, h, and i. He concluded that Respondents, including Michael Pousti and Ramin Niakiani, are engaged in a scheme to obtain money through the mail by means of false representation in violation of 39 U.S.C. § 3005. He recommended issuance of the orders authorized by that statute.
RESPONDENTS’ EXCEPTIONS TO THE INITIAL DECISION
Respondents have filed five separate exceptions as well as a brief divided into four categories. Each exception and legal argument has been fully considered.
EXCEPTIONS ONE AND TWO
Exceptions one and two take issue with the conclusions of the Administrative Law Judge that Respondents’ solicitations contained seven materially false representation.[1]/ Respondents initially contend that the representations in paragraphs 12(a) and (d) of the Complaint, that ACFA and NSRA were government entities or affiliated with the government, were not made. In support of its position Respondents rely upon a sentence contained in its brochure which states that “Since ACFA is not state or government funded…;” that Respondents’ non-government affiliation would be disclosed if Respondents’ agents were questioned on the matter during telephone calls initiated by those interested in Respondents’ service; that Respondents’ program was much different from any government financial assistance program; that the belief of government affiliation would not induce anyone to purchase Respondents’ program; and that it is unfair to find false representations of government affiliation against both ACFA and NSRA.
Respondents’ contentions that the Administrative Law Judge erred in finding Respondents’ advertisements falsely and materially represented that ACFA and NSRA were government entities or affiliated with the government are without merit. Respondents’ solicitations, taken as a whole most probably convey the impression that Respondents are government entities or at least affiliated with the government. In this regard in interpreting advertising representations the probable impact of the advertisement upon ordinary minds is the test to be applied. Donaldson v. Read Magazine, Inc., 333 U.S. 178 (1948); Peak Laboratories, Inc. v. United States Postal Service, 556 F.2d 1387 (5th Cir. 1977). The ordinary reader is generally the person to whom the advertisement is directed. Scott David Wilcox, P.S. Docket No. 23/70 at 5 (P.S.D. June 29, 1987); Anderson Pharmacals, P.S. Docket No. 28/90 (P.S.D. March 3, 1989). In this proceeding the ordinary reader would most probably be from within a group of parents, college students, and prospective college students, including the unsophisticated, not limited to those knowledgeable in scholarship procedures. Deception may be present in advertisements when they contain untrue statements or when statements which ought to be contained are omitted. In considering the interpretation which ought to be given to advertising claims, the reasonable implications arising from the claims are to be given weight as well as those claims which are stated expressly. Speigel, Inc. v. Federal Trade Commission, 411 F.2d 481 (7th Cir. 1969); Baslee Products Corp. v. United States Postal Service, 356 F. Supp. 841 (D.N.J. 1973); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957). It is the net impression that the advertisement as a whole is likely to make upon those to whom it is directed that must be considered. G.J. Howard Co. v. Cassidy, 162 F. Supp. 568, 572 (E.D.N.Y. 1958). As stated in Aronberg v. Federal Trade Commission, 132 F.2d 165, 167 (7th Cir. 1942) “[a]dvertisements are intended not ‘to be carefully dissected with a dictionary at hand, but rather to produce an impression upon prospective purchasers.’”
Respondents’ solicitations contain a Washington, DC address, when in fact Respondents do not conduct business out of Washington, DC. The name on the letterhead “Academic Council on Financial Assistance” conveys an official or governmental presence. Respondents’ use an acronym “ACFA,” similar to the manner in which government agencies use acronyms. A logo containing an eagle, indicative of government affiliation, is displayed in Respondents’ solicitation. Respondents’ initial solicitation contains the statement at the bottom that “ACFA” is made possible through funds from the National Scholastic Resources Administration, Washington, DC.” Thus, reference containing such words as “National” and “Administration” in its title is made to a different entity located in Washington, DC, thereby furthering the impression of government affiliation. The net impression conveyed to the ordinary reader by these factors would most probably be that Respondents are either government entities or at least are affiliated with the government.
Respondents’ reliance on the one sentence disclaimer in its brochure that ACFA is neither state nor government funded is misplaced. The sentence is in small print and is contained in a paragraph at the bottom of one page of the brochure. Other significant information is provided in the brochure in much larger dark print. It is established that an inconspicuous disclaimer is insufficient to dispel the effect of false representations. Leo Deboub, P.S. Docket No. 19/185 (P.S.D. July 10, 1986).
It matters not that Respondents’ non-government affiliation would be disclosed if Respondents’ agents were questioned on the subject during telephone conversations for deception may be present in advertisements when they contain untrue statements or when statements which ought to be contained are omitted. See The Washington Mint, Inc., P.S. Docket No. 30/42 at 12 (P.S.D. June 1, 1989), affirmed The Washington Mint v. United States Postal Service, C.A. 89-3162 (D.D.C. 1990). The information as to non-affiliation could easily have been inserted in a significant fashion into Respondents’ solicitations.
It is of no significance that ACFA’s materials are different from those generated in government financial assistance programs. The purpose of the false representation statute is to protect all members of the public, both the wary and the gullible.
N. VanDyne Advertising Agency, Inc. v. United States Postal Service, 371 F. Supp. 1373, 1376 (S.D.N.Y. 1974); Gottlieb v. Schaffer, 141 F. Supp. 7, 16 (S.D.N.Y. 1956), Undoubtedly a good percentage of the recipients of Respondents’ solicitations are not familiar in detail with the contents of information pertaining to and the operation of all government financial assistance programs.
Contrary to Respondents’ assertion the existence of the government affiliation representation is material. The affiliation of the United States government to Respondents’ offering provides great legitimacy and acts as an inducement to recipients to participate in the program. Compare Richard W. Verret, P.S. Docket No. 20/18 (P.S.D. Dec. 31, 1986).
Finally, no unfairness is found in the Administrative Law Judge concluding that NSRA and ACFA both made false representations. NSRA is the corporate entity. ACFA is its fictitious name and the name under which it does business. Both names are utilized in the solicitations.
Respondents contend that the Administrative Law Judge erred in concluding that the allegation of paragraph 12 (e) of the Complaint was partially a false representation and was material. The allegation was that Respondents’ solicitations represented that both ACFA and NSRA maintain staffed offices in Washington, DC and provide the services described in the solicitations. With the exception of that portion of the representation that NSRA provided the services described in the solicitations, the Administrative Law Judge found the representation to have been made and to be materially false.
Respondents’ position on this issue is that the Washington, DC street address was legitimate, and that Respondents had leased the office space and had planned to expand into and later move to Washington, DC. Further, Respondents contend that paragraph 12 (e) of the Complaint should have been included as a part of paragraph 12 (a) and (d), and that it was unfair and misleading to treat the alleged misrepresentation of paragraph 12(e) independently.
While it is true that the street address was not a bogus one and that Respondents had in fact leased the office space, Respondents never staffed the Washington, DC office and conducted all business from San Diego California offices, contrary to the impression created by its solicitations. The representation alleged by paragraph 12(e) of the Complaint, was thus made, as narrowed by the Administrative Law Judge’s findings and conclusion, and was false. The materiality of the representation is established by the Washington, DC governmental affiliation which would induce the purchase of Respondents’ services. Further, no unfairness is found by Complainant alleging a false representation in paragraph 12(e) of the Complaint separate from paragraphs 12(a) and (d).
Respondents next except to the Administrative Law Judge’s conclusions of paragraphs 12(f) and (i) of the Complaint. In those conclusions the Administrative Law Judge found that, as alleged, Respondents materially misrepresented that ACFA directly submits student applications to scholarship sources and that the submission by the applicants of their documentation and fee constitutes an application for financial assistance.
It is Respondents’ position that the Administrative Law Judge erred for several reasons. Initially, Respondents point out that Complainant received no unsolicited complaints pertaining to Respondents’ solicitations prior to commencement of this matter. Next, they posit that it would not be economically feasible for them to perform the scholarship application work for the fee they charge and that the ordinary reader therefore could not reasonably conclude that Respondents would perform the application work. They also contend anyone confused as to Respondents’ participation in the application work would have inquired and thus would not have been misled. Respondents also attack the credibility of Complainants lay witnesses.
Respondents’ solicitations can be read to make the false representations alleged. They advise the recipient that funds are available regardless of need or academic performance. To obtain such funds the student is told to fill out an application and that “the more complete information you provide, the better the chances of receiving the most awards available.” In the application form the student is advised that a refund can be obtained “if the Council does not secure funding for me.” A warning is then given that “Providing misinformation may result in mandatory repayment of the scholarship and/or award.” The above quoted language clearly conveys the impression that filling out and processing scholarship application forms will be the Respondents’ obligation. The solicitation does contain other language such as “we can match for you as many sources as you qualify for,” and “a student will receive between five and twenty-five scholarship sources,” which can be interpreted to mean the student will receive only a list of sources and thereafter have to apply to each source. It is established however that an advertisement which is ambiguous and susceptible to two interpretations one of which is false, is misleading and violates 39 U.S.C. § 3005. United States v. 95 Barrels of Vinegar, 265 U.S. 438 (1924); The Robertson-Taylor Company, P.S. Docket No. 16/98 (P.S.D. March 31, 1986). Such is the case here. The representation that Respondents would fill out and process the financial aid applications would certainly be material as it would induce one to participate in Respondents’ program.
The existence of ambiguity is corroborated by the testimony of the lay witnesses in the hearing. The witnesses for each side, all credible, testified as to their divergent interpretations of Respondents’ offering.
In regard to Respondents’ argument that Complainant received no complaints pertaining to the solicitation the existence of actual dissatisfied customers need not be established in order to find a violation of § 3005. Oriental Nurseries, Inc., P.S. Docket No. 9/116 (P.S.D. May 19, 1981) see Farley v. Heininger, 105 F.2d 79 (D.C. Cir. 1939). The decisive factor is whether the mails are being used to obtain money by means of materially false representations. Gilles J. Bitbol, et al., P.S. Docket No. 12/158 (P.S.D. Aug. 24, 1982).
Respondents’ position that the ordinary reader would understand tat it would not be economically feasible for Respondents to perform the application work is not persuasive. Students were required to expend $60 to obtain Respondents’ services and were in no position to understand Respondents’ financial and profit structure. Additionally, the representation of government affiliation would quite likely lead the student to believe Respondents’ operation was government subsidized.
The argument that anyone confused as to the method of Respondents’ operation would have inquired and thus not be misled does not dispel the false representation. Those who initially believed Respondents would perform the application processing work would have no reason to inquire further.
Respondents’ attempted impeachment of the credibility of Complainant’s lay witnesses likewise has no merit. The Administrative Law Judge, who heard the testimony and viewed the witnesses’ demeanor, found them credible. There is no persuasive evidence in the record to the contrary. In any event, the contents of the solicitations, standing alone, establish the false representations. “Evidence other than the advertisements themselves is unnecessary to establish whether the representations are made, their effect on the ordinary mind and their materiality.” The Robertson-Taylor Company, P.S. Docket No. 16/98 (P.S.D. March 31, 1986).
Respondents contest the Administrative Law Judge’s conclusions that the representations alleged in paragraphs 12 (g) and (h) of the Complaint are materially false. Paragraph 12 (g) alleged that Respondents misrepresented that a person who utilized ACFA’s service received a $10,000 grant, while 12(h) alleged that the minimum amount of scholarship award through the use of Respondents’ program is $300. Respondents contend the reference to a $10,000 grant was to a potential financial source and not to an amount actually received by an ACFA customer. As to the $300 amount Respondent state that that amount was the estimated low figure utilized in describing a range of awards and that it was the figure established in determining eligibility for refunds.
Contrary to Respondents’ assertion, the representation alleged by paragraphs 12(g) and (h) were made, were false, and were material. The question and answer sheet utilized by Respondents’ agents contained an instruction to the agent or counselor to respond to a question concerning the amounts of awards or scholarships by stating “The lowest grant we’ve seen is $300, the highest was $10,000….” The representations were clearly made, and were false (as Respondents admit that the $10,000 amount was obtained by a student who did not use Respondents’ services, and other evidence establishes that awards of less than $300 were made). The representations constitute an inducement to utilize Respondents’ services and are thus material. Respondents’ exceptions are thus without merit.
EXCEPTION THREE
In this exception Respondents contend that the Administrative Law Judge erroneously permitted an amendment to the Complaint, allowing Complainant to add additional charges of misrepresentation against Respondents.
The two day hearing in this matter initially concluded on March 29, 1990. At that time counsel for Respondents requested and was granted an opportunity to file a “Motion for Leave to Call Additional Witnesses.” The Motion was filed on April 4, 1990, opposed by Complainant, and was granted by the Administrative Law Judge. The additional witnesses were scheduled to be heard on April 17, 1990. On April 16, 1990, Complainant filed a “Motion to Amend Complaint to Conform to the Evidence.” The Motion requested the addition to the Complaint of six more allegations of false representations made by Respondents. The Administrative Law Judge deferred ruling on the Motion and allowed the parties an opportunity to brief the issue. The additional witnesses, students and a father of a student utilizing Respondents’ services, testified on behalf of Respondents’ services, testified on behalf of Respondents on April 17, 1990. The Administrative Law Judge thereafter partially granted Complainant’s Motion to Amend, allowing the addition to the Complaint of four of the requested six allegations of false representations, holding that the issues raised were litigated at the hearing. Three of the allegations (paragraphs 12 (g), (h) and (i)) of the Amended Complaint) were thereafter held to be materially false representations.
The Rules of Practice in this matter allow for the amendment of pleadings in 39 C.F.R. § 952.12 as follows:
* * * *
(c) When issues not raised by the pleadings but reasonably within the scope of the proceedings initiated by the complaint are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendments as may be necessary to make the pleadings conform to the evidence and to raise such issues shall be allowed at any time upon the motion of any party.
After considering the evidence in the record and the arguments of the parties, fully briefed, the Administrative Law Judge concluded that four of the allegations had been tried by consent of the parties and would not necessitate the introduction of additional evidence by Respondents. The record in this matter has been carefully reviewed and it fully supports the Administrative Law Judge’s ruling. Respondents exception is without merit.
EXCEPTION FOUR
Respondents’ exception four contends that the Administrative Law Judge’s decision was based upon unsupported findings and errors of law. Six specific errors are alleged.
Initially, Respondents take exception to a sentence in Finding of Fact (FOF) 6 of the Initial Decision that “many of the students [contacted by Respondents] have never had any experience with college financial aid.” Since Respondents contacted between 2 and 2.5 million students or parents the finding is undoubtedly accurate. However, since there is no citation to the record in the decision to support the sentence it is modified to read “many of the students most probably never had any experience with college financial aid.”
Respondents next contend the Administrative Law Judge erred in finding that there were three versions of the ACFA solicitation materials. It matters not whether the solicitation is viewed as being in three versions or one version with a modification or modifications to it. What is important and in issue is whether the version or versions of the solicitation (s) contained materially false representations.
Respondents object to FOF 9 on the basis that it appears to imply only slight differences exist between Respondents’ application form and typical financial aid forms. Contrary to Respondents’ assertion the FOF clearly differentiates between the forms by stating “Typical financial aid forms require more extensive demographic, financial, and family information.” Further, the finding was made based upon the testimony of Respondents’ expert witness.
Respondents’ fourth allegation of error consists of a reiteration of its position that the Administrative Law Judge erred in finding and concluding Respondents made the false representations alleged. The argument is again rejected.
Respondents object to that portion of FOF 17 of the Initial Decision that Complainant’s lay witnesses “are representative of a significant group of ordinary customers.” Respondents contend the testimony was unreasonable and not credible. Respondents’ contention is rejected for the reasons previously stated in the discussion under exceptions one and two. The Administrative Law Judge heard the witnesses’ testimony and viewed their demeanor and found the witnesses to be credible. Additionally, the testimony only corroborated that the false representations were made. The contents of the solicitations established the false representations.
Prejudicial legal errors or rulings made by the Administrative Law Judge during the course of the proceedings are also alleged. Respondents allege the Administrative Law Judge erred by allowing Complainant to introduce evidence subsequent to its failure to provide Respondents with an exhibit list, by rejecting Respondents’ motion in limine to prevent Complainant’s lay witnesses from testifying and by admitting in evidence three memoranda of interviews made by a Postal Inspector. A review of the record in this matter establishes that the Administrative Law Judge in fact excluded from evidence a substantial portion of Complainant’s proposed exhibits, due to Complainant’s failure to provide Respondents with an exhibit list. Those documents not encompassed within the exclusion ruling were either not available or not in existence at the time of the exchange of exhibit lists. In regard to the Administrative Law Judge denying Respondents’ motion in limine, and admitting into evidence the three memoranda, historically lay testimony has been allowed in false representation hearings with respect to the meaning of language used in a solicitation and it is once more reiterated that the lay testimony only corroborated that the solicitations contained the false representations.
EXCEPTION FIVE
Respondents’ exception five contends that the Initial Decision was based upon an incorrect view of the relevant facts and law. The exception generally disagrees with the conclusions drawn by the Administrative Law Judge and in fact reargues their position that no materially false representations were made as college students and prospective college students, the group at which Respondents’ solicitation is aimed, are sophisticated enough to realize exactly what service they were purchasing. Respondents’ exceptions are not well taken. The purpose of 39 U.S.C. § 3005 is to protect the public, both the wary and the gullible. Lynch v. Blount, 330 F. Supp. 689 (S.D.N.Y. 1971), aff’d 404 U.S. 1007 (1972); Gottlieb v. Schaffer, supra. The Administrative Law Judge’s Findings of Fact are fully supported by the record. His conclusions accurately contain recitations of existing law and correctly found the existence of materially false representations in Respondents’ offering.
CONCLUSION
After consideration of the entire record it is concluded that Respondents are engaged in a scheme to obtain money through the mail by means of materially false representations. Accordingly, Respondents’ appeal is denied. The Orders authorized by 39 U.S.C. § 3005 are issued with this decision.
James A. Cohen
Judicial Officer
[1]/ Respondents additionally took issue with the Administrative Law Judge’s conclusion that Respondents made the false representation alleged in paragraph 12(b) of the Complaint. The Administrative Law Judge found the misrepresentation not material however. The matter therefore need not be considered further.