Telebrands Corp., Ajit Khubani; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932-3297]

Telebrands Corp., Ajit Khubani; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent agreement.

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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 among other things prohibit the Roanoke,

Virginia-based mail and telephone order company--and an individual who

is an officer and director of the company--from representing that the

Sweda Power Antenna (a device purported to improve television and radio

reception) provides the best, crispest, clearest or most focused

television reception achievable without cable installation, and would

require any claim about the relative or absolute performance,

attributes, or effectiveness of any product intended to improve a

television's or radio's reception, sound, or image to be truthful and

supported by competent and reliable evidence. The consent agreement

would also prohibit the respondents from making a number of false or

unsubstantiated claims about the WhisperXL (a purportedly major

breakthrough in sound enhancement technology). The consent agreement

resolves allegations in an accompanying complaint that the respondents

made unsubstantiated and false claims in advertising for the Sweda

Power Antenna and the WhisperXL, and misrepresented a money-back

guarantee with respect to the Sweda Power Antenna. A related federal

district court decree will require the respondents to

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pay a $95,000 civil penalty, and will prohibit them from violating the

Commission's Mail or Telephone Order Merchandise Rule.

DATES: Comments must be received on or before December 9, 1996.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room H-159, Sixth Street and Pennsylvania Avenue, N.W., Washington,

D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Michael Bloom, New York Regional

Office, Federal Trade Commission, 150 William Street, 13th Floor, New

York, New York 10038-2603, (212) 264-1207. Donald G. D'Amato, New York

Regional Office, Federal Trade Commission, 150 William Street, 13th

Floor, New York New York 10038-2063, (212) 264-1223.

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 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 FTC

Home page, 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, N.W., Washington,

D.C. 20580. 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 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 an agreement to a

proposed consent order from Telebrands Corp. (``Telebrands'') and Ajit

Khubani. Proposed respondents are marketers of varied products,

including the Sweda Power Antenna and the WhisperXL, which were

subjects of this investigation.

The proposed consent order has been placed on the public record for

sixty (60) days for the 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 comments received and will decide whether it should

withdraw from the agreement and take appropriate action or make final

the agreement's proposed order.

The Commission's complaint charges that the proposed respondents

made the following unsubstantiated and false representations about the

Sweda Power Antenna: (1) Sweda Power Antenna provides the best,

crispest, clearest, or most focused television reception achievable

without cable installation; (2) Sweda Power Antenna takes a television

or radio signal and electronically boosts it before it gets to a

television or radio; and (3) the installation of a Sweda Power Antenna

will more effectively improve television's or radio's reception, sound,

or image than the installation of a television or radio dish antenna.

Further, the complaint alleges that the proposed respondents failed

to timely honor their money back guarantee for the Sweda Power Antenna.

Part I of the proposed order prohibits proposed respondents from

representing that the Sweda Power Antenna provides the best, crispest,

clearest or most focused television reception achievable without cable

installation or will more effectively improve a television's or radio's

reception, sound, or image than the installation of a television or

satellite or external dish antenna.

Part II of the proposed order requires that any claim proposed

respondents make that the Sweda Power Antenna takes a television or

radio signal and electronically boosts it before it gets to a

television or radio be truthful and supported by competent and reliable

evidence. Similarly, Part III of the proposed order requires that any

claim about the relative or absolute performance, attributes, or

effectiveness of any product intended to improve a television's or

radio's reception, sound, or image be truthful and supported by

competent and reliable evidence.

Part IV of the proposed order prohibits the proposed respondents

from misrepresenting, by act or omission, any guarantee of satisfaction

or refund offer in connection with the advertising or sale of any

product, and requires the proposed respondents to make a full refund of

the purchase price, as well as any shipping, insurance, and handling

charges, within seven business days of receiving the consumer's request

for the guaranteed refund. The proposed order permits the respondents

to exclude fees, such as handling charges, paid by the consumer from

the terms of the guarantee of satisfaction or refund offer so long as

the exclusion is clear, conspicuous, and in close proximity to the

guarantee of satisfaction or refund offer.

With respect to the WhisperXL, the complaint charges that the

proposed respondents made the following unsubstantiated and false

representations about the WhisperXL: (1) WhisperXL is a major

breakthrough in sound enhancement technology; (2) WhisperXL is an

effective hearing aid; (3) WhisperXL is designed to produce or produces

clear amplification of whispered or normal speech, television, radio,

or other mid- to high-frequency sounds at a distance of more than a few

feet; (4) WhisperXL allows the user to hear a whisper from as far as

100 feet away; and (5) WhisperXL allows the user to hear a pin drop

from 50 feet away.

Part V of the proposed order prohibits the proposed respondents

from making these claims for the WhisperXL. Further, Part VI of the

proposed order requires that any claim respondents make about the

relative or absolute performance, attributes, or effectiveness of any

hearing aid be truthful and supported by competent and reliable

evidence.

The proposed order contains recordkeeping requirements for

materials that substantiate, qualify, or contradict claims covered by

the proposed order (Part VII), and requires the proposed respondents to

keep and maintain all records demonstrating compliance with the terms

and provisions of the order (Part VIII). Parts IX and X of the proposed

order require distribution of a copy of the order to current and future

officers and agents. Part XI provides for Commission notification upon

a change in the corporate respondent and Part XII requires Commission

notification when the individual respondent changes his present

business or employment.

Part XIII provides for the termination of the order after twenty

(20) years under certain circumstances. Part XIV obligates proposed

respondents to file compliance reports with the Commission.

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 or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 96-25668 Filed 10-7-96; 8:45 am]

BILLING CODE 6750-01-M