IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA

FEDERAL TRADE COMMISSION

Plaintiff, Magistrate Judge Snow

vs. 

TRAVEL BAHAMAS TOURS, INC.,
and RICHARD A. RASKIN, individually
and as an officer and director of said corporation,
Defendants.

CASE NO. 97-6181-CIV-Ferguson

STIPULATED FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION


Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), has filed its complaint for permanent injunction and other relief pursuant to sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 53(b) and 57b, the Telemarketing and Consumer Fraud and Abuse Prevention Act ("Telemarketing Act"), 15 U.S.C. 6101 et seq., and the Truth in Lending Act ("TILA"), 15 U.S.C.  1601 et seq., charging defendants Travel Bahamas Tours, Inc. and Richard A. Raskin with violating Section 5 of the FTC Act, the FTC's Trade Regulation Rule entitled "Telemarketing Sales Rule," the TILA, and its implementing Regulation Z, 12 C.F.R. Part 226.

The parties have agreed to the entry of this Stipulated Final Judgment and Order for Permanent Injunction ("Order") by this Court to resolve all matters of dispute between them in this action.

NOW, THEREFORE, Plaintiff Federal Trade Commission and defendants Travel Bahamas Tours, Inc. and Richard A. Raskin ("Raskin") having requested the Court to enter this Order,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:

FINDINGS

1. This Court has jurisdiction of the subject matter of this case and of the parties consenting hereto;

2. Venue is proper as to all parties in the Southern District of Florida;

3. The activities of defendants are in or affecting commerce, as defined in the FTC Act, 15 U.S.C.  44;

4. The Complaint states a claim upon which relief may be granted against defendants under Sections 5 and 19 of the FTC Act, 15 U.S.C.  45(a) and 57b, the Telemarketing Sales Rule, 16 C.F.R. Part 310, and the TILA, 15 U.S.C.  1601 et seq.;

5. Defendants have waived all rights that may arise under the Equal Access to Justice Act, 28 U.S.C.  2412, amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996);

6. Defendants waive all rights to seek appellate review or otherwise challenge or contest the validity of this Order, and further waive and release any claim defendants may have against the Commission, its employees, and agents; and

7. This Order does not constitute and shall not be interpreted to constitute an admission by defendants that they have engaged in violations of the FTC Act, the Telemarketing Sales Rule, the TILA, or Regulation Z.

DEFINITIONS

1. "Consumer" means a purchaser, customer, or subscriber.

2. "Travel-related" means any product or service that purports to provide consumers with transportation, accommodations, or amenities usable during vacation travel and for which any defendant receives remuneration of any kind for such product or service.

BOND

I.

IT IS THEREFORE ORDERED that, before engaging or participating in any business involving the sale, selling, or fulfillment of travel-related products or services, magazines or magazine subscriptions, except those magazines published by defendants or their employer, whether directly or indirectly, in concert with others, or through any business entity or other device, defendants, their successors and assigns, shall first obtain a performance bond for each such business entity or activity in the principal sum of Two Hundred and Fifty Thousand Dollars and No Cents ($250,000.00); provided that, defendants may instead deposit a like amount with the Federal Trade Commission, in which case such monies shall be used to redress consumers injured by any defendant's violation of this Order, and, in which case Paragraphs A through F of this Part shall have the same force and effect as though defendants had obtained a performance bond. Provided further, however, in lieu of a performance bond or cash deposit, defendants may establish and fund, pursuant to the terms and conditions set forth in this Part, an escrow account in the principal sum of Two Hundred and Fifty Thousand Dollars and No Cents ($250,000.00) in cash, or such other assets of equivalent value, which the Commission, or its representative, in its sole discretion may approve. Defendants shall maintain such amount in that account for so long as they continue to engage or participate in any business involved in the sale, selling, or fulfillment of travel-related products or services, magazines or magazine subscriptions, except those magazines published by defendants or their employers, whether directly or indirectly, in concert with others, or through any business entity or other device, and for at least two (2) years after they have ceased such activity. Defendants shall pay all costs associated with the creation, funding, operation and administration of the escrow account. The Commission, or its representative, shall, in its sole discretion, select the escrow agent. The escrow agreement shall be in substantially the form attached to this Order as Exhibit A. If such an escrow account is established, such account shall be used to redress consumers injured by any defendant's violation of this Order, and, in such case, Paragraphs A through F of this Part shall have the same force and effect as though defendants had obtained a performance bond.

A. Each performance bond shall be an insurance agreement providing surety for financial loss issued by a surety company that is admitted to do business in each of the states in which the Defendant is doing business, that holds a Federal Certificate of Authority As Acceptable Surety On Federal Bond and Reinsuring, and that is rated A or better by Best Insurance Guide. The performance bond shall cite this Stipulated Final Judgment and Order for Permanent Injunction as the subject matter of the bond and shall provide surety thereunder against financial loss resulting from whole or partial failure of performance due, in whole or in part, to any conduct violating this Order, the Telemarketing Sales Rule, 16 C.F.R. Part 310, the Truth in Lending Act, 15 U.S.C.  1601 et seq., or Section 5 of the FTC Act, 15 U.S.C. 45. Each such performance bond shall be in favor of both (1) the Federal Trade Commission for the benefit of any consumer injured as a result of any false or misleading representation made by any such business or its employees, either directly or indirectly, and (2) any consumer so injured;

B. The bond shall be deemed continuous and remain in full force and effect at all times during which any such Defendant engages or participates in or holds any ownership interest, share, or stock in, or serves as an officer, director or trustee of, any business entity engaged, in whole or in part, in the sale, selling, or fulfilling of travel, travel packages, magazines, or magazine subscriptions, and for at least two (2) years after any such Defendant has ceased to engage or participate in any manner in any such activity;

C. The bond required pursuant to this paragraph is in addition to, and not in lieu of, any other bond required by federal, state or local law;

D. Each such defendant shall provide the executed original of the bond or bonds required by this Part to the Associate Director of Marketing Practices of the Federal Trade Commission at least ten (10) days before commencing the event precipitating the requirement of obtaining the bond;

E. Proceedings instituted under this Part are in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any other proceedings the Commission may initiate to enforce this Order; and

F. Defendants shall not disclose the existence of the performance bond to any consumer, or other purchaser or prospective purchaser of any product or service without disclosing clearly and prominently, at the same time: "AS REQUIRED BY ORDER OF THE U.S. DISTRICT COURT IN SETTLEMENT OF CHARGES THAT [NAME OF DEFENDANT] ENGAGED IN FALSE OR MISLEADING REPRESENTATIONS IN THE PROMOTION AND SALE OF TRAVEL PACKAGES AND MAGAZINE SUBSCRIPTIONS."

PROHIBITED BUSINESS PRACTICES

II.

IT IS FURTHER ORDERED that defendants, their successors and assigns, and their agents, employees, officers, and servants, and those persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise are hereby permanently restrained and enjoined: 1) from failing to comply with the Telemarketing Sales Rule, 16 C.F.R. Part 310, the TILA, 15 U.S.C.  1601 et seq., or Regulation Z, 12 C.F.R. Part 226; and 2) in connection with the sale, selling, or fulfillment of travel-related products or services, magazines or magazine subscriptions, from misrepresenting any fact material to a consumer's purchasing decision.

III.

IT IS FURTHER ORDERED that defendants, their successors and assigns, and their agents, employees, officers, and servants, and those persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise are hereby permanently restrained and enjoined from providing to any person, except agents of the Plaintiff, or other law enforcement authorities, the name, address, telephone number, or credit card or bank account number of any consumer who provided such information to or did business with defendants prior to January 1, 1998; provided, however, that defendants may provide such information if required to do so by court order.

IV.

IT IS FURTHER ORDERED that defendants, their successors and assigns, are hereby permanently restrained and enjoined from failing to take reasonable steps sufficient to monitor and ensure that all employees, telemarketers, and agents engaged in sales, order verification, or customer service functions comply with this Order. Such steps shall include two or more of the following procedures: verification of all sales transactions, blind testing of the oral representations made by such employees, spot checking of consumers who were contacted by, or made contact with, each employee, and ascertaining the number and nature of consumer complaints regarding any transactions in which each employee is involved.

GENERAL REQUIREMENTS

V.

IT IS FURTHER ORDERED that for a period of five (5) years from the date of entry of this Order, defendants, their successors and assigns, shall create and maintain:

A. Records sufficient to demonstrate defendants' compliance with the provisions of this Order;

B. Records containing the name, address, and telephone number of each consumer who purchases goods or services from defendants either directly or though any third party;

C. A record of each written consumer complaint (including complaints referred from any third party, such as any office of the Better Business Bureau or any State Attorney General), and each refund request received by defendants, including:

1. The consumer's name, address, telephone number, and the dollar amount paid by the consumer;

2. The consumer's written complaint or refund request, and the date the complaint or refund request was received;

3. The basis of the complaint or refund request, if known, and the nature and result of any investigation conducted as to the complaint;

4. The response to the complaint or refund request, and the date of the response; and

5. The final resolution, the date of the resolution, and, in the event of a denial of a refund request, the reason for the denial; and

D. With regard to complaints or refund requests received by telephone, defendants shall develop and maintain a program to create and maintain the same information as identified in Paragraphs C.1 through C.5 of this Part.

VI.

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Order, for purposes of determining or securing compliance with this Order, defendants, their successors and assigns, shall:

A. Upon reasonable written notice by any representative of the Commission, permit representatives of the Commission access during normal business hours to the offices of any business owned or controlled in whole or in part by any of them to inspect and copy all documents relating in any way to any conduct subject to this Order; and

B. The Commission may otherwise monitor the defendants' compliance with this Order by all lawful means available.

VII.

IT IS FURTHER ORDERED that for a period of five (5) years from the date of entry of this Order, defendant Raskin shall promptly inform the Commission by written notification within fiftenn (15) days, or in the case of involuntary termination of employment, within thirty (30) days of such termination, of:

A. Any change in his residential address, occupation, place of business, or place of employment;

B. Any change in his employment status;

C. Any change in the name, address, type of business, or identity of each company, corporation, partnership, or business owned or controlled directly or indirectly by him;

D. Any proposed change in any company, corporation, partnership, or business that is owned or controlled, directly or indirectly, by him including, but not limited to, dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in his business relationship(s) that may affect compliance obligations arising out of this Order;

E. His affiliation with a new business or employment that involves telemarketing, including a description of such business, the business address, and of his interest in and duties in connection with such business or employment;

F. The formation of any corporation, sole proprietorship, partnership, or independent consulting business or any other business entity that is engaged directly or indirectly in telemarketing, in which he is or is to become an officer or director, or in which he is or is to become a holder of ten percent (10%) or more of the stock; and

G. Any termination or suspension of business operations by him, the resumption of business operations, or any termination, suspension or establishment of any type of consulting relationship with any third party relating to telemarketing.

VIII.

IT IS FURTHER ORDERED that for a period of five (5) years defendants, their successors and assigns, shall distribute a copy of this Order to their or his present and future officers, agents, representatives, employees, and independent contractors, and shall secure from each such person a signed statement acknowledging receipt of said Order; provided that, if defendant Raskin has an ownership interest of less than fifty percent (50%) in any business, Raskin shall comply with the forgoing with respect only to his partners, managers, and those individuals who formulate policy for such business. Within fifteen (15) days of entry of this Order, defendants shall file with the Federal Trade Commission an affidavit setting forth the fact and manner of their compliance, including the name and title of each person to whom a copy of the Order has been provided, and a copy of their acknowledgment.

IX.

IT IS FURTHER ORDERED that all notifications required of defendants, their successors and assigns, by this Order, or concerning this Order, shall be sent to the following address:

Associate Director
Division of Marketing Practices
Federal Trade Commission Room 238
6th Street & Pennsylvania Avenue, N.W.
Washington, D.C. 20580.

X.

IT IS FURTHER ORDERED that this Court will retain jurisdiction of this matter for the purpose of enabling any of the parties to this Order 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 Order, for the enforcement of compliance therewith, or the punishment of violations thereof.

SO ORDERED, this day of , 1998.

_______________________________________________
THE HONORABLE WILKIE D. FERGUSON, JR.
UNITED STATES DISTRICT JUDGE
SOUTHERN DISTRICT OF FLORIDA

Defendants Travel Bahamas Tours, Inc., and Richard Raskin, by their counsel and individually, hereby consent to the terms and conditions of the Stipulated Final Judgment and Order for Permanent Injunction as set forth above and consent to the entry thereof. Defendants waive any right they may have under the Equal Access to Justice Act, 28 U.S.C.  2412.

Dated: ________________________________________, 1998

FOR DEFENDANTS:

___________________________________ ___________________________________
C. Everett Boyd, Jr. Richard A. Raskin
Counsel for Defendants Individually and as an Officer
Ervin, Varn, Jacobs & Ervin of Travel Bahamas Tours, Inc.
305 South Gadsden Street
Tallahassee, FL 32301
(850) 224-9135

FOR PLAINTIFF:

___________________________________
Stephen L. Cohen
Counsel for Plaintiff
Federal Trade Commission
Washington, DC 20580
(202) 326-3222