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Rothschild v. Federal Trade Commission.

November 20, 1952

LESTER ROTHSCHILD, INDIVIDUALLY AND TRADING AS GEN-O-PAK COMPANY
v.
FEDERAL TRADE COMMISSION.



Author: Duffy

Before MAJOR, Chief Judge, DUFFY and LINDLEY, Circuit Judges.

DUFFY, Circuit Judge: This is a petition to review a cease and desist order of the Federal Trade Commission. The amended complaint charged petitioner with unfair and deceptive acts and practices in commerce, in violation of the Federal Trade Commission Act.*fn1

Petitioner's principal place of business is at Chicago, Illinois, and he operates under the trade names of Gen-O-Pak Company, American Deposit System, and Manpower Classification Bureau. Under each trade name petitioner sells services and literature intended to be used in locating delinquent debtors.

Operating as the Gen-O-Pak Company, petitioner sells two forms of double postcards carrying printed messages of which he is the author. Sales of these cards are made throughout the United States to firms and persons desiring to locate their delinquent debtors. One half of one of the double postcard forms reads as follows:

Office of the Gen-O-Pak Co.

139 North Clark Bldg.,

Chicago 2, Illinois

Dear Friend:

We have on hand a package, which we will send to you if you will completely fill out the return card, giving sufficient identification to warrant our sending this package to you. We will hold same at your risk subject to your forwarding directions for thirty days and the complete information requested. There are no charges whatsoever and the package will be sent to you all charges prepaid .

Yours very truly,

The Gen-O-Pak Co.

The return card attached to the above card contains a questionnaire. Among other questions asked of the person addressed is the name of his bank, his employer, and the name of a friend.

Petitioner's customers receive bundles of such cards from petitioner and address them to their respective debtors at their last known address, and then return the cards to petitioner who mails them to the debtors as addressed. Petitioner sends to his customers any reply cards received giving information concerning their debtors, and also mails to each replying debtor a packet containing three pen points having a retail value of 6›. Petitioner testified the packet of pens thus sent is the package referred to on the postcards addressed to the debtors. In 1950 petitioner sold 44,253 of such cards at a price of 15› a set. The charge of 15› includes the cost of the cards, the cost of the pens, and covered petitioner's service.

The second form of double postcards which petitioner uses while trading as Gen-O-Pak Company also is addressed by petitioner's customers. These cards are mailed to persons other than the debtor, and represent that Gen-O-Pak Company has on hand a package which it wishes to deliver to the debtor. The reply card asks for debtor's address and other information which would be valuable in making collections. When information is obtained by petitioner, it is sent on to his customers. The petitioner then sends a packet containing three pen points to the ...


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