Unique Selling Propositions, Inc., doing business as Georgetown Galleries, and its owner, Richard Spring, have agreed to settle Federal Trade Commission charges that they misrepresented the investment value of the antiquarian art prints they sold to consumers. Under the proposed settlement, Spring and his company would be barred from misrepresenting the investment value of the prints they sell, and would be required to disclose that buying artwork as an investment is high-risk.
"This is another case developed in the course of an industry-wide investigation of art dealers across the United States launched by the FTC, and the first involving antique prints, a relatively new market," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "Consumers who are buying art should be wary of false claims that they're also making wise financial investments that are likely to generate substantial profits in the short term."
Unique Selling Propositions is based in Bethesda, Maryland, a Washington, D.C. suburb.
According to the FTC complaint detailing the charges, the defendants promoted the antique artwork they marketed as excellent, low-risk financial investments. "In fact," the complaint says, "the artwork defendants sell is not an excellent investment likely to generate substantial profits for consumers within two to five years." In addition to claims that the antique art is an excellent investment, Spring allegedly represented that the artwork was being sold to consumers at near-wholesale prices. In fact, the complaint alleges, much of the artwork was sold to consumers at substantially higher prices than the customary prices that retailers of artwork pay for comparable art. Further, the complaint alleges, in many instances, the defendants sell artwork to consumers for substantially more than the values at which the consumer could liquidate it.
To settle the FTC charges, Spring and his company have agreed not to misrepresent that artwork or any other investment offering is an excellent investment, or that it is a low-risk or no-risk investment. In addition, they have agreed not to falsely represent that artwork or any other investment offering is being sold at prices comparable to, or below, the prices at which consumers are currently able to liquidate the artwork, or that any artwork or investment is being sold at or near wholesale prices. They also would be barred from making any representations about investment risk, profit potential or market value without a reasonable basis in fact, and would be required to disclose in sales brochures and certain other written materials that tout the investment value or liquidity of art, that artwork is a high-risk investment.
The Commission vote to accept the settlement was 5-0. It was filed in the U. S. District Court for the Southern District of Maryland, yesterday.
NOTE: This consent order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent orders have the force of law when signed by the judge.
Copies of the complaint and settlement are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326- 2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov
(FTC File No. 952 3033)
(Civil Action No. AW95-3584)