5412 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices

Waldorf, Maryland. Community Bank of

Tri-County is the proposed successor by

charter conversion to Tri-County

Federal Savings Bank of Waldorf,

Waldorf, Maryland.

B. Federal Reserve Bank of Chicago

(James A. Bluemle, Vice President) 230

South LaSalle Street, Chicago, Illinois

60690-1413:

1. AliKat Investments, Inc., Gurnee,

Illinois; to become a bank holding

company by acquiring 100 percent of

the voting shares of NorthSide

Community Bank, Gurnee, Illinois, a de

novo bank.

Board of Governors of the Federal Reserve

System, January 31, 1997.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 97–2863 Filed 2–4–97; 8:45 am]

BILLING CODE 6210–01–F

FEDERAL TRADE COMMISSION

[File No. 952–3401]

1554 Corp.; Brainerd L. Mellinger, III;

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: In settlement of alleged

violations of federal law prohibiting

unfair or deceptive acts or practices and

unfair methods of competition, this

consent agreement, accepted subject to

final Commission approval, would

prohibit, among other things, the

Woodland Hills, California-based

company and its president from making

unsubstantiated earnings claims and

from using deceptive testimonials. The

Commission had alleged that 1554 and

Mellinger advertised a work-at-home

course, called ‘‘Mellinger World Trade

Mail Order Plan,’’ in an infomercial

which contained deceptive and

misleading claims.

DATES: Comments must be received on

or before April 7, 1997.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW.,

Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Justin Dingfelder, Federal Trade

Commission, S–4302, 6th and

Pennsylvania Ave, NW, Washington,

DC 20580. (202) 326–3017.

Jonathan Cowen, Federal Trade

Commission, S–4302, 6th and

Pennsylvania Ave, NW, Washington,

DC 20580. (202) 326–2533.

Lemuel Dowdy, Federal Trade

Commission, S–4302, 6th and

Pennsylvania Ave, NW, Washington,

DC 20580. (202) 326–2981.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and § 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 sixty (60) days. The following

Analysis to Aid Public Comment

describes the terms of the consent

agreement, and the allegations in the

accompanying complaint. An electronic

copy of the full text of the consent

agreement package can be obtained from

the Commission Actions section of the

FTC Home Page (for January 27, 1997),

on the World Wide Web, at ‘‘http://

www.ftc.gov/os/actions/htm.’’ A paper

copy can be obtained from the FTC

Public Reference Room, Room H–130,

Sixth Street and Pennsylvania Avenue,

NW, Washington, DC 20580, either in

person or by calling (202) 326–3627.

Public comment is invited. 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

§ 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 to a proposed consent order

from 1554 Corporation and its president

Brainerd L. Mellinger, III (collectively,

‘‘respondents’’). The agreement would

settle a proposed complaint by the

Federal Trade Commission that

respondents engaged in unfair or

deceptive acts or practices in violation

of section 5(a) of the Federal Trade

Commission Act.

The proposed consent order has been

placed on the public record for sixty

(60) days for reception of comments by

interested persons. Comments received

during this period will become part of

the public record. After sixty (60) 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.

The Proposed Complaint

This matter concerns advertising

practices related to the sale of 1554

Corporation’s Mellinger World Trade

Mail Order Plan (‘‘Mellinger Plan’’). The

administrative complaint, which the

Commission has proposed to issue,

would allege that respondents promoted

the sale of the Mellinger Plan by

creating and disseminating

advertisements and promotional

materials, including a program-length

television advertisement entitled

‘‘Mellinger’s Secret Treasures.’’

The complaint charges that through

the use of statements contained in their

advertisements and promotional

materials, respondents made

unsubstantiated representations that

consumers who use the Mellinger plan

typically succeed in readily starting and

operating profitable businesses and that

consumers who use the Mellinger Plan

typically earn substantial income. The

complaint also charges that

endorsements appearing in respondents’

advertisements and promotional

materials were represented, without

substantiation, to be reflective of the

typical or ordinary experience of

members of the public who have used

the Mellinger Plan.

The Proposed Order

The proposed consent order contains

provisions that are designed to remedy

the alleged advertising violations and to

prevent respondents from engaging in

similar acts and practices in the future.

The order prohibits respondents from

making any unsubstantiated

representations: (1) that consumers who

use the Mellinger plan typically succeed

in readily starting and operating

profitable businesses, (2) that consumers

who use the Mellinger Plan typically

earn substantial income, or (3) about the

performance, benefits, efficacy or

success rate of any product or service

concerning business opportunities.

The proposed order also contains

prohibitions about using or misusing

testimonials or endorsements. In

particular, the order prohibits

respondents from using testimonials

that do not reflect the actual opinions,

beliefs, or experiences of the endorser,

and from using testimonials to represent

the typical experience of respondents’

customers unless respondents can

substantiate that such claims are in fact

typical or respondents clearly disclose

that the endorser’s experience is not

typical. The order also contains

standard provisions regarding recordkeeping, notification of changes in

corporate or employment status,

distribution of the order, termination of

the order, and the filing of a compliance

report.

The purpose of this analysis is to

facilitate public comment on the

proposed order, and it is not intended

to constitute an official interpretation of
Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Notices 5413

the agreement and the proposed order or

to modify their terms in any way.

Donald S. Clark,

Secretary.

[FR Doc. 97–2808 Filed 2–4–97; 8:45 am]

BILLING CODE 6750–01–P

[File No. 932–3019]

The Administrative Co.; Michael P.

McIntyre; Analysis to Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: In settlement of alleged

violations of federal law prohibiting

unfair or deceptive acts or practices and

unfair methods of competition, this

consent agreement, accepted subject to

final Commission approval, would

prohibit, among other things, The

Administrative Company and McIntyre

from making misrepresentations about

living trusts, and would require them to

make certain disclosures with regard to

legal challenges that can be made

against living trusts, the possibility of

probate for certain estates regardless of

whether living trusts are used, and the

transfer of consumers’ assets into the

trusts. The agreement settles allegations

that the respondents made numerous

false statements about the benefits and

appropriateness of living trusts, in

general, and about living trusts they

sold, in particular.

DATES: Comments must be received on

or before April 7, 1997.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Janice Charter, Federal Trade

Commission, Denver Regional Office,

1961 Stout Street, Suite 1523, Denver,

CO 80294. (303) 844–2272. Elizabeth

Palmquist, Federal Trade Commission,

Denver Regional Office, 1961 Stout

Street, Suite 1523, Denver, CO 80294.

(303) 844–2272.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and § 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 sixty (60) days. The following

Analysis to Aid Public Comment

describes the terms of the consent

agreement, and the allegations in the

accompanying complaint. An electronic

copy of the full text of the consent

agreement package can be obtained from

the Commission Actions section of the

FTC Home Page (for January 16, 1997),

on the World Wide Web, at ‘‘http://

www.ftc.gov/os/actions/htm.’’ A paper

copy can be obtained from the FTC

Public Reference Room, Room H–130,

Sixth Street and Pennsylvania Avenue,

NW., Washington, DC 20580, either in

person or by calling (202) 326–3627.

Public comment is invited. 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

§ 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

agreed to accept, subject to final

approval, a proposed consent order

settling charges that Michael P.

McIntyre and The Administrative

Company (‘‘TAC’’) violated Section 5 of

the Federal Trade Commission Act.

The proposed consent order has been

placed on the public record for sixty

(60) days for reception of comments by

interested persons. Comments received

during this period will become part of

the public record. After sixty (60) 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.

This matter concerns the sale of living

trusts to senior citizens through

membership in the American

Association for Senior Citizens

(‘‘AASC’’). The respondents covered by

the proposed order include The

Administrative Company, the company

through which all of AASC’s business

was conducted, and Michael P.

McIntyre, the President of TAC.

The complaint alleges that the

respondents violated section 5 of the

Federal Trade Commission Act by

making numerous misrepresentations

about the advantages of living trusts

over other forms of estate planning.

Specifically, the complaint alleges that

respondents have misrepresented that

(1) the use of a living trust avoids all

administrative costs; (2) at death, a

living trust ensures that assets are

distributed immediately or almost

immediately; (3) a living trust cannot be

challenged; (4) living trusts are prepared

by local attorneys; (5) a living trust

protects against catastrophic medical

costs; (6) a living trust is the appropriate

estate planning device for every

consumer; and (7) there are no

disadvantages to a living trust.

The proposed consent order contains

provisions which are designed to

remedy the alleged violations and to

prevent the respondents from engaging

in similar acts and practices in the

future. The proposed order would

prohibit the respondents from making

the misrepresentations alleged in the

complaint and set forth above.

Additionally, the order would require

the respondents to disclose to

prospective purchasers that living trusts

may be challenged on similar grounds

as wills and that they may not be

appropriate in all instances.

Under the order, the respondents also

would be required to provide four

affirmative disclosures in situations

where the statements would be true. (1)

Some states have created a mechanism

for ‘‘informal probate’’ of an estate if the

estate meets certain criteria, which

significantly reduces the time involved

in probate. This disclosure would be

required in states where informal

probate is available. (2) If the transfer of

an individual’s assets into the living

trust is not included in the price of

creating the living trust, that fact must

be disclosed. (3) If it is the sole

responsibility of the purchaser of the

living trust to transfer assets into the

trust, that fact must be disclosed. (4) In

some states, but not in others, creditors

have a longer period of time to file

claims against a living trust than against

a probated estate. This fact would have

to be disclosed in such states.

The proposed order would require the

respondents to distribute the proposed

order to their officers, agents, and all

personnel who participate in any way in

respondents’ sales activities relating to

living trusts. Additionally, the order

would require TAC to notify the

Commission of any changes in its

corporate structure, and Michael

McIntyre to notify the Commission of

his affiliation with any new business.

The proposed order also requires the

respondents to retain for five years all

materials that they rely upon in making

representations covered by the order.

Finally, the respondents are required to

file one or more compliance reports

detailing their compliance with the

order.

The purpose of this analysis is to

facilitate public comment on the

proposed order, and it is not intended

to constitute an official interpretation of

the agreement and proposed order, nor

to modify in any way their terms. The

proposed consent order has been

entered into for settlement purposes

only and does not constitute an

admission by the respondents that the