"National", "Federal", Federal courts, and to the Federal Trade Commission, cause the forms to simulate Government or official documents.

(2) The forms do not disclose in a prominent place, in clear language and in type at least as large as the largest type (exclusive of captions) either that the sole purpose is to collect a debt, or that the U.S. Government is in no way connected with the request for payment.

(3) The forms do not disclose in a prominent place, and in clear language, the identity of the creditor to whom the debt is allegedly owed.

(4) The forms contain only a general statement of the rights of a creditor under state law to attach the real or personal property, income, wages, and other property of the debtor; the statement is misleading and inaccurate because, while it will be sold and used in many states, it does not set out the many variations in state laws, particularly the exemptions and restrictions.

(5) The forms represent by implication that the Federal Trade Commission and a federal court of appeals have approved them.

(6) The brown window envelope in which the forms are to be mailed simulate, by their general appearance and by reference to "Washington" and "Federal", envelopes used by the Federal Government for official purposes.

(7) Because of the similarity to envelopes used by the Federal Government, and references to "Washington D.C." and "Federal", the envelope seems to come from a party other than the creditor. [35 F.R. 5999, Apr. 11, 1970]

§ 15.409 Labeling of reconditioned automotive parts.

(a) The Commission issued an advisory opinion with respect to labeling requirements applicable to used automotive engine accessories such as alternators, generators, starters, and similar parts which will be marketed in the United States after having been reconditioned in Taiwan with some new American or Taiwanese components such as wire and diodes.

(b) It was proposed that scrapped and otherwise used automotive parts would be acquired in the United States and shipped to Taiwan for reconditioning with such new materials as might be necessary, and then returned to the United States for final assembling and

marketing. No information was available as to what percentage of total costs would be accounted for by shipping, foreign labor, components of a foreign origin, domestic parts, or domestic labor.

(c) Under these circumstances the Commission advised in general terms that:

(1) Labeling the reconditioned automotive parts "Made in U.S.A." would be a deceptive act or practice violative of section 5, Federal Trade Commission Act.

(2) The Commission would not object to a full disclosure of all relevant facts to purchasers of the merchandise; and

(3) Insufficient information had been supplied to permit an informed decision as to whether all reference to origin or place of work done may be omitted entirely from labels on the commodities.

(d) The Commission added that the United States Bureau of Customs should be consulted for applicable regulations affecting such activities.

[35 F.R. 5999, Apr. 11, 1970] § 15.410

Speed ratings and safety claims for tires.

(a) The Commission advised that the proposed advertising of speed rating and safety claims for foreign made automotive tires would be considered deceptive and in violation of section 5, Federal Trade Commission Act.

(b) The statements to be used in advertising and promotional materials included: "The (tire) has an HR speed rating-this means it has survived tests at 130 MPH for 24 hours straight." "The (tire) is rated at 130 MPH for 24 hours straight." At the bottom of the page would appear this asterisked footnote: "*Internationally-recognized speed rating of the European Tyre and Rim Technical Organization. Established in supervised tests by professional drivers. Not intended to encourage high-speed driving."

(c) In a policy statement of June 3, 1969, entitled "F.T.C. Will Challenge Misleading Speed and Safety Representations in Automobile Tire Advertising," the Commission announced that * it intends to challenge automobile tire advertising which misrepresents the overall speed and safety performance capabilities of tires. Examples of current advertising claims are * built low

cer

especially for the young crowd and today's high performance cars', tified safe at 100 mph. So you're safe at 60, 70, or 80', 'Safety tested at over 100 mph *', 'Stamina so great we safety tested them at 130 mph', and 'stops 25% quicker"."

(d) In the policy statement the Commission took the position that "There is reason to believe that claims of this type may be deceptive and misleading as to tire safety. The speed tests do not reveal how the tires will perform at such speeds under all road conditions encountered in normal driving at various stages of the life of the tires. Specifically, the tests do not reveal whether the tires at such speeds during normal use would withstand various road hazard impacts, the sustained flexing to which tires would be subjected, and whether the tires would remain seated on the rim of the wheel under such conditions." [35 F.R. 5999, Apr. 11, 1970]

§ 15.411 Tripartite promotional plan involving use of "cents off" coupons. (a) The Commission rendered an advisory opinion concerning a tripartite promotional plan involving use of "cents off" coupons redeemable after purchase of certain products sold in retail grocery stores.

(b) It was proposed that the promotion, designed to ultimately cover a single large metropolitan trading area, would be operated in a small portion of the area for 30 days and then moved to an adjoining area for another 30 day period until the entire metropolitan area had been covered. The value of each coupon will depend upon the product purchased and will be attached on the shelf where the product is displayed. Each package of the promoted product will bear a sticker which the shopper removes and places on the "cents off" coupon as proof of purchase.

(c) Participating manufacturers will pay a fixed fee for each retailer serviced, plus the value of the redeemed coupons, plus 2 cents to be passed on to cooperating retailers for services rendered. Each such supplier will be cautioned to notify his retail customers that the plan is available to them. Notice of the availability of the promotional plan will be made to retailers through wholesale distributors, local trade associations, advertising in the trade press, and through the buying offices of cooperatives and

chain stores. In addition, spot checks of retail grocery stores in an intended area will be made by personal contact or telephone to determine whether they have knowledge of the program and that it is available to them.

(d) The Commission expressed the view that implementation of the proposed course of action in the manner described would be unlawful unless (1) the plan is offered to all competing sellers of the supplier's products regardless of the type of store or location of the seller and (2) the value of the "cents off" coupon is accurately and adequately made known to the prospective purchaser prior to the purchase of the product to which the coupon relates. [35 F.R. 6184, Apr. 16, 1970]

§ 15.412

Country of origin labeling on imported textile fiber garments.

(a) The Commission issued an advisory opinion concerning the requirements for noting the country of origin on labels of certain nylon or acrylic knit garments to be imported in the greige and thereafter dyed and finished in the United States.

(b) One garment, made of nylon, has an f.o.b. price of $13.50 per dozen and the other garment, made of polyester, has an f.o.b. price of $23 per dozen. The cost of dyeing and finishing the garments in the United States is between $8 and $12 per dozen, an approximate increase of 50 percent in value. After dyeing and finishing, the garments become merchantable wearing apparel and will be appropriately identified as to fiber content and the RN number.

(c) The Commission noted that Rule 34(a) of the rules and regulations issued as required by the Textile Fiber Products Identification Act provides that: "Where the form of an imported textile fiber product is not basically changed, the country where such product was originally manufactured or processed shall be set out in the required information. As for example, a fabric imported into the United States in the greige but finished and dyed in this country must show the country where the fabric was manufactured or processed."

(d) The Commission advised that the failure to mark the imported garments as to their country of origin would be violative of the Textile Fiber Products Identification Act.

[35 F.R. 6184, Apr. 16, 1970]

§ 15.413

Country of origin labeling on boxes containing imported bearings. (a) The Commission rendered an advisory opinion concerning the proper marking of boxes containing metal bearings imported from Japan.

(b) It was proposed that the bearings, manufactured in Japan, will have the term "Made in Japan" etched into the metal of each bearing. Catalog advertising describing these bearings will bear the legend "Made in Japan".

(c) The Commission expressed the view that unless the box bears any representation that the content is a product of United States manufacture, the failure to mark thereon "Made in Japan" would not be deceptive.

[35 F.R. 6184, Apr. 16, 1970]

§ 15.414 Uniform warranty and warranty service system.

(a) The Commission rendered an advisory opinion concerning a "Zip" Warranty and Warranty Service System to be offered farm and industrial machinery manufacturers for use in connection with sales of their equipment.

(b) Under the proposed plan an equipment manufacturer, in warranting his merchandise, would supply (1) a geographically convenient replacement parts depot from which repair and replacement parts would be readily available to dealers and users; (2) a central means for receiving and handling equipment deficiency reports and complaints; (3) an incentive award program for employee-assemblers of individual troublefree equipment; (4) a comprehensive, uniform warranty on all equipment; (5) a cash award program for employee-assemblers based on annual sales of troublefree equipment. The heart of the seventeen (17) page warranty and service plan is a series of cash and other awards intended to encourage purchasers to report equipment deficiencies and to encourage service personnel to strive towards the goal of zero defects.

(c) The Commission advised that use by farm and industrial equipment manufacturers of the submitted warranty plan would be unobjectionable except for the possible adoption by competitors of a warranty common to both. The Commission was of the view that it would be preferable for any participating supplier to establish the terms and

conditions of his own warranty program without reference to the terms and conditions of a competitor's warranty program.

[35 F.R. 10109, June 19, 1970]

§ 15.415 Country of origin labeling on crates containing unfinished imported raincoats and on garments after being finished in the United States.

(a) The Commission rendered an advisory opinion with respect to (1) its requirements for foreign origin disclosure in the labeling on containers of unfinished "Dacron" polyester and rayon raincoat bodies and raincoat carry-bags to be imported from the Orient and (2) the necessity for disclosing the foreign country of origin on labels of the finished garments and bags which are to be sold as a unit to consumers at the retail level.

(b) Under the proposed operation various sized raincoat bodies will be imported without collars, buttons or buttonholes. Material for the carrybags, cut to size, will also be imported without buttons or buttonholes. After importation, American made buttons and various styled American made collars will be sewn onto the coat body, and the buttonholes cut out and bound. American made buttons will be sewn onto the carry-bags and the buttonholes cut out and bound. The estimated costs in the operation are $2 as the f.o.b. value of the unfinished garment body and bag material and $1.23 as the cost of domestic labor and material.

(c) The submittal of facts disclosed that the Bureau of Customs would consider importer-finishers as the ultimate purchasers of the unfinished raincoats and bags within the meaning of the amended Tariff Act of 1930, and that an exception from the marking of the country of origin requirement on each individual raincoat body and carry-bag would be granted so long as the containers in which the unfinished material will be imported are legibly and conspicuously marked as to indicate the foreign country of origin of the contents and so long as Customs Officers at the Port of Entry are satisfied that such containers will reach the ultimate purchasers unopened.

(d) The Commission advised, based on its understanding of the factual submittal, particularly in light of the pro

visions of section 4(b) (4) of the Textile Fiber Products Identification Act and the labeling exception granted by the Bureau of Customs, that (1) no additional marking on the containers or unfinished materials therein will be required beyond that requirement imposed by the Bureau of Customs; (2) that the raincoats to be sold to consumers at the retail level after having been finished in the United States must be labeled so as to clearly and conspicuously disclose the foreign country of origin of the imported fabrics; and (3) in the absence of any affirmative representation that the finished raincoat carry-bag is made entirely in the United States it will not be necessary to disclose the foreign country of origin of the imported fabric thereof. [35 F.R. 10109, June 19, 1970]

§ 15.416 Meaning of phrase "Leave your pocketbook at home".

(a) The Commission rendered an advisory opinion concerning the proposed use of the phrase "Leave your pocketbook at home" in light of the requirements of the Truth in Lending Act, section 144, and Regulation "Z", promulgated thereunder (12 CFR § 226.10(d) (2)).

(b) The phrase in question would be used in television and mail circular advertising by sellers of clothing at retail on installment sales contracts. It was presented that customers may make the first payment at some future time and that "The customer may take the clothing with him at the time the purchase is made rather than wait until the first payment has been made. In ninety-nine out of a hundred cases, the purchaser does take the clothing with him at the time the purchase is made."

(c) The Commission advised it had concluded that the proposed phrase is equivalent to, or synonymous with, a "no down payment" claim. Under these circumstances it would be improper to use the proposed phrase without disclosing the specific credit terms required by section 226.10 (d) (2) of Regulation "Z". Specifically, the advertising must disclose the following credit information whenever no down payment claims are made:

(1) The cash price,

(2) The number, amount, and due dates or period of payments scheduled to repay the indebtedness if the credit is extended,

(3) The annual percentage rate, and

(4) The deferred payment price of the article offered for sale.

[35 F.R. 10109, June 19, 1970]

§ 15.417 Use of term "manufacturer”. (a) The Commission rendered an advisory opinion as to whether producers of electronic display systems may be referred to as "manufacturers" of such equipment in informational materials furnished the press.

(b) It was submitted that such firms produce and sell electronic display systems and related equipment to those interested in obtaining current transactions on the stock exchange. In order to produce such equipment, various components such as electronic parts, motors, pumps, frames, and related materials are purchased from many sources and assembled into a completed unit at a manufacturing plant in the northeastern States. Some of these components are stock items, others are made to specification and in some instances machine work is necessary in order to properly assemble the basic components into completed units.

(c) On the basis of the information supplied, the Commission concluded that such producers, because they shape basic materials and components into finished products by hand-labor and by machinery, are the manufacturers of electronic display systems and related equipment. In the premises, the Commission advised that it would not object to references of such producers as the manufacturer of the systems in informational materials sent to the press.

[35 F.R. 10110, June 19, 1970]

§ 15.418 Four point tripartite promotional advertising plan.

(a) The Commission responded to a request for an advisory opinion regarding the legality of a proposed four point three-party promotional advertising program to be offered suppliers and retailers in the grocery field.

(b) Under the program as presented for consideration, the first point involves contracting with retailers for the use of one or more mass display areas in their stores by suppliers. (A mass display area is defined as that space set aside for the display of merchandise of the same manufacturer, usually at the end of an aisle.) Suppliers would be charged and retailers remitted (less 15 percent agency fee) one-half cent per display area for each

person entering the store each week, the number to be determined by the number of sales slips run through each cash register. Supplier's customers would be notified of the program's availability through bulletins included in suppliers' and wholesalers' mailing, through letters to direct buyers, and directly by mail to any other of the suppliers' customers. Suppliers would be limited to 10 percent of the available mass display areas in a given market during a calendar year.

(c) The second point involves the offer of a plan to suppliers for making funds available to retailers for the advertising of suppliers' product as a supplement to each mass display. Suppliers would be charged and retailers remitted (less 15 percent agency fee) one-fourth cent per person entering the store (as determined by cash register sales slips) per week for inclusion of the supplier's product as a feature in the body of the retailer's newspaper advertising. Retailers would also qualify for this allowance through distribution of handbills and/or mailers reasonably covering his trading area. Supplier's customers would be notified of the program's availability through bulletins included in supplier's and wholesaler's mailing, through letters to direct buyers, and directly by mail to any other of the supplier's customers.

(d) The third point involves arranging radio/television commercials for suppliers announcing that their products are available at named retail outlets. The commercials would supplement the mass display promotions. Time requirements for spot commercials would be pooled so as to obtain the best "frequency rate." Each customer of a participating supplier would receive at least one commercial without cost. The total number of commercials furnished a customer would be computed by dividing an amount computed by multiplying the retailer's customer count (as determined by cash register sales slips) by one-eighth cent per person and dividing by the cost per commercial.

(e) Under the fourth point it was proposed to supply to retailers and suppliers a sales survey which would include consumer reaction to a product, reasons for consumer purchases of a product and, when possible, a reaction to the product after use, and with retailer cooperation, comparison of sales with competing products.

(f) The Commission advised it was of the view that were the program, other than the proposed sales survey under point four, implemented in the manner described no law administered by the Commission would be violated. The sales survey in point four of the plan, which calls for the exchange of price or quantity sales information among retailers, or between retailers and suppliers, might be used in such manner as to lessen competition and since the legality of any such survey depends on the manner of its implementation, the Commission is unable to advise on this aspect of the plan.

[35 F.R. 10268, June 24, 1970]

§ 15.419 Tripartite promotion based on television game show.

(a) The Commission rendered an advisory opinion relative to the legality of a television game entitled "Your Name's a Winner” sponsored by a local retailer and national food suppliers.

(b) It was proposed that a television game show type program be produced and sponsored primarily by a local grocery retailer at a contract price determined by the number of "game pieces" (resembling Bingo cards) distributed by that retailer to customers for the play of the game. Home viewers cross off the letters of their own names on a game piece against those flashed on the television screen and receive all prizes appearing in the squares of the crossed-off row, including a hidden prize. The show producer would sell each square as advertising space to national manufacturers and suppliers, some of whom will be suppliers to the sponsoring retailer. The products involved in each advertising space would be prominently displayed during the course of the game show, and the suppliers of each would be featured at all times.

(c) The Commission expressed the view that insofar as a supplier to a retailer-sponsor is an advertising contributor to the game show problems under the amended Clayton Act would be present. The advertising rights of a national supplier purchasing a square constitutes a payment of something of value to or for the benefit of a customer within the meaning of that Act. On the other hand, if the advertising rights to all such squares are sold to non-suppliers of the sponsoring merchant so that a supplier