[Federal Register Volume 65, Number 12 (Wednesday, January 19, 2000)]
[Notices]
[Pages 2965-2966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1190]


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FEDERAL TRADE COMMISSION

[File No. 992 3114]


Memtek Products, Inc.; Analysis to Aid Public Comment

AGENCY:  Federal Trade Commission.

ACTION:  Proposed consent agreement.

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SUMMARY:  The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES:  Comments must be received on or before February 9, 2000.

ADDRESSES:  Comments should be directed to: FTC/Office of the 
Secretary, Room 159, 600 Pennsylvania Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:  Michael Dershowitz or Joel Winston, 
FTC/S-4002, 600 Pennsylvania Ave., NW, Washington, DC 20580. (202) 326-
3158 or 326-3153.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for January 10, 2000), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW, 
Washington, DC 20580. Two paper copies of each comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. Such comments or views 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
section 4.9(b)(6)(ii) of the Commission's rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from respondent 
Memtek Products, Inc. (``Memtek'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    Memtek repackages, advertises, labels and sells, among other 
products, ``Memorex'' brand computer diskettes, and blank audiotapes 
and videotapes. This matter concerns allegedly deceptive rebate 
advertising claims made in conjunction with the sale of these products. 
The Commission's proposed complaint alleges that Memtek falsely 
represented that purchasers of its package of 100 computer diskettes 
would receive a $29.99 cash rebate within 12 weeks of Memtek's receipt 
of purchasers' rebate requests. The complaint alleges that in many 
instances purchasers received their rebates one to two months late. The 
complaint also alleges that Memtek falsely represented that purchasers 
of its blank audiotapes and videotapes would receive a $10 Best Buy 
Gift Check within 8 weeks of Memtek's receipt of purchasers' gift check 
requests. The $10 Gift Check could then be used at any Best Buy retail 
store to obtain $10 off the purchase of any pre-recorded videotape or 
music CD. The complaint alleges that in many instances purchasers 
received their $10 Gift Checks one to three months late.
    The proposed consent order contains provisions designed to prevent 
respondent from engaging in similar acts and practices in the future.
    Part I of the proposed order prohibits respondent from 
misrepresenting the time in which any cash rebate, or rebate in the 
form of credit towards future purchases, will be mailed to consumers. 
It also prohibits respondent from failing to provide such rebates 
within the time specified, or if no time is specified, within thirty 
days.
    Part I of the proposed order also prohibits respondent from 
violating any provision of the FTC's Mail Order Rule in connection with 
rebates in the form of merchandise. Among other things, the Mail Order 
Rule prohibits marketers from failing to provide rebates in the form of 
merchandise within the time they specify for delivery, or if no time is 
specified, within thirty days, unless they offer consumers the option 
of consenting to a delay or canceling the rebate request and promptly 
receiving

[[Page 2966]]

reasonable cash compensation instead of the merchandise originally 
offered. Finally, Part I of the proposed order similarly prohibits 
respondent from failing to provide rebates in the form of services or 
any other consideration (other than cash, credit towards future 
purchases, or merchandise) within the time it specifies for delivery, 
or if no time is specified, within thirty days, unless it offers 
consumers the option of consenting to a delay or canceling the rebate 
request and promptly receiving reasonable cash compensation instead of 
the rebate originally offered.
    Part II of the proposed order requires respondent to maintain 
copies of all materials relied upon in making any representation 
covered by this order.
    Part III of the proposed order requires respondent to distribute 
copies of the order to various officers, agents and employees of 
respondent.
    Part IV of the proposed order requires respondent to notify the 
Commission of any changes in corporate structure that might affect 
compliance with the order.
    Part V of the proposed order requires respondent to file with the 
Commission one or more reports detailing compliance with the order.
    Part VI of the proposed order is a ``sunset'' provision, dictating 
that the order will terminate twenty years from the date it is issued 
or twenty years after a complaint is filed in federal court, by either 
the United States or the FTC, alleging any violation of the order.
    The purpose of this analysis is to facilitate public comment on the 
order. It is not intended to constitute an official interpretation of 
the agreement and proposed order or to modify in any way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-1190 Filed 1-18-00; 8:45 am]
BILLING CODE 6750-01-M