UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
EASTERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

DESIGNER CHECKS, INC., an Alabama corporation,

Defendant.

JUDGE

DOCKET NO.

CONSENT DECREE

WHEREAS: plaintiff, the United States of America, has commenced this action by filing the Complaint herein; defendant has waived service of the Summons and Complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of issues of fact or law and without defendant admitting liability for any of the matters alleged in the Complaint;

THEREFORE, on the joint motion of plaintiff and defendant, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

1. This Court has jurisdiction of the subject matter and of the parties.

2. The Complaint states a claim upon which relief may be granted against the defendant under Sections 5(a)(1), 5(m)(1)(A), 9, 13(b) and 16(a) of the Federal Trade Commission Act, 15 U.S.C. 45(a)(1), 45(m)(1)(A), 49, 53(b), and 56(a).

CIVIL PENALTY

3. In settlement of this matter, defendant Designer Checks, Inc. (“Designer Checks”), its successors and assigns, shall pay plaintiff a civil penalty, pursuant to Section 5(m)(1)(A) of the Federal Trade Commission Act, 15 U.S.C. 45(m)(1)(A), in the amount of forty-eight thousand dollars ($48,000).

4. Defendant shall make the payment required by Paragraph 3 within five (5) business days of the date of entry of this Consent Decree by electronic fund transfer in accordance with instructions provided by the Office of Consumer Litigation, Civil Division, U.S. Department of Justice, Washington, D.C. 20530, for appropriate disposition.

5. In the event of any default in payment, which default continues for ten (10) days beyond the due date of payment, the entire unpaid penalty, together with interest, as computed pursuant to 28 U.S.C. 1961, from the date of default to the date of payment, shall immediately become due and payable.

INJUNCTION

6. Defendant, its successors and assigns, and its officers, agents, servants, and employees, and all persons in active concert or participation with them who receive actual notice of this Consent Decree by personal service or otherwise, are hereby enjoined from ever violating, directly or through any corporation, subsidiary, division, fulfillment house, drop shipper or other device, any provision of the Federal Trade Commission's trade regulation rule concerning Mail or Telephone Order Merchandise (the "MTOR"), 16 C.F.R. Part 435, or as the MTOR may hereafter be amended. A copy of the MTOR is attached hereto as "Appendix A" and incorporated herein as if fully set forth verbatim.

RECORDKEEPING REQUIREMENTS

7. Defendant, its successors and assigns, shall maintain and preserve from destruction, for a period of five (5) years from the date of entry of this Consent Decree, all computer records demonstrating compliance with this Decree, and for a period of three (3) years from the date of entry of this Consent Decree, all paper records demonstrating compliance with this Decree.

8. Within seven (7) business days of its receipt of a written request, defendant, its successors and assigns, shall permit the Federal Trade Commission to inspect and copy all records the defendant is required by this Consent Decree to keep; provided, however, that any documents or records being actively used during the ordinary course of business are to be inspected during non-business hours or at a mutually convenient time.

PERSONS AFFECTED; CONTINUING JURISDICTION

9. Defendant, its successors and assigns, shall:

(a) Within thirty (30) days of the entry of this Consent Decree, provide a copy of the Decree to each of the corporation's current directors and officers, to each supervising employee, agent, and representative having direct sales, advertising, recordkeeping, fulfillment, customer service, or policy responsibility with respect to the subject matter of this Decree, and to each fulfillment house, drop-shipper or other agent employed to perform any duty required by the MTOR, and keep records of all persons to whom this Consent Decree is transmitted, including the transmission documents;

(b) For a period of five (5) years from the date of entry of this Consent Decree, provide a copy of the Decree to each of the corporation's directors and officers, and to each supervising employee, agent, and representative having direct sales, advertising, recordkeeping, fulfillment, customer service, or policy responsibility with respect to the subject matter of this Decree, and to each fulfillment house, drop-shipper or other agent employed to perform any duty required by the MTOR, within five (5) days after such person assumes his or her position, and keep records of all persons to whom this Consent Decree is transmitted, including the transmission documents; provided however, that a person who has previously been provided a copy of the Decree pursuant to subparagraph (a) need not be provided with another copy pursuant to this subparagraph; and

(c) Retain for five (5) years from the date of entry of this Consent Decree and, upon request, make available to the Federal Trade Commission for inspection and copying records of all persons to whom this Consent Decree is transmitted.

10. Defendant, its successors and assigns, shall notify the Federal Trade Commission's Atlanta Regional Office at least thirty (30) days prior to any change in its business, including but not limited to change of corporate name or address, place(s) of business, dissolution, merger, incorporation, assignment, sale resulting in the emergence of any successor corporation, the creation or dissolution of a subsidiary engaged in direct marketing, or any other change which may affect any compliance obligations arising out of this Consent Decree.

11. This Court shall retain jurisdiction of this matter for the purpose of enabling any of the parties to this Consent Decree to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Consent Decree, for the enforcement of compliance therewith, or the punishment of violations thereof.

JUDGMENT IS THEREFORE ENTERED in favor of plaintiff and against defendant, pursuant to all the terms and conditions recited above.

DATED: This day of , 1998.

UNITED STATES DISTRICT JUDGE

The parties, by their respective counsel, hereby consent to the terms and conditions of the Consent Decree as set forth above and consent to the entry thereof. Defendant waives any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. 2412.

FOR THE UNITED STATES OF AMERICA:

FRANK W. HUNGER
Assistant Attorney General
Civil Division
U.S. Department of Justice
United States Attorney
Northern District of Alabama

By:

Assistant U.S. Attorney
Northern District of Alabama

EUGENE M. THIROLF, Director
Office of Consumer Litigation

By:

Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
Washington, D.C. 20530
(202) 307-0486

FOR THE FEDERAL TRADE COMMISSION:

ANTHONY E. DIRESTA
Regional Director
Atlanta Regional Office
Federal Trade Commission

KATHARINE B. ALPHIN
Attorney
Atlanta Regional Office
Federal Trade Commission
60 Forsyth Street S.W.
Suite 5M35
Atlanta, GA 30303
(404) 656-1350

FOR THE DEFENDANT:

DESIGNER CHECKS, INC.

By:

STEVEN R. JENSEN
President & Chief Operating Officer
Designer Checks, Inc.

KING & SPALDING
101 Peachtree Street
Atlanta, GA 30303-1763
Attorney for Defendant

By:

STEPHEN S. COWEN
A Member of the Firm