Announced Actions for June 21, 1996

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The Federal Trade Commission today announced the following actions. The FTC staff contact is Dan Ducore, 202-326-2526.

Applications for prior approval of transactions: The FTC has received an application for prior approval of a divestiture from the following. The application will be subject to public comment for 30 days, until July 22.

  • The Stop & Shop Companies, Inc., of Quincy, Massachusetts, has applied for FTC approval to divest the supermarket at 170 Great Road in Bedford, Massachusetts, to Leo’s Market, L.L.C., a newly-created company founded by Leo Kahn and which operates out of Chestnut Hill, Massachusetts. The divestiture is one of 17 required under an April 1996 consent order designed to restore supermarket competition in five areas of Massachusetts that allegedly was lost when Stop & Shop acquired Purity Supreme, Inc. (See Nov. 1, 1995 news release regarding the 1996 consent order; Docket No. C-3649.)

Commission action regarding petitions to reopen and modify FTC orders: Following a public comment period, the FTC has ruled on the following petition:

  • The Commission has granted the petition of NorAm Energy Corp. (formerly Arkla, Inc.), of Houston, Texas, thereby setting aside a 1989 consent order, under which NorAm’s only remaining obligations were to obtain prior FTC approval for certain transactions and to report annually to the Commission regarding its compliance with the order. The consent order had settled charges that Arkla’s acquisition of natural gas pipeline assets from TransArk Transmission Co. would reduce competition for the transportation of natural gas out of the Arkoma Basin in Arkansas and the transmission of gas to consumers in the Russellville, Arkansas-area. (See June 5, 1989 news release for more details regarding the consent order; Docket No. C-3265; Commission vote to reopen and set aside the order was 5-0.)

Consent agreements given final approval: Following a public comment period, the Commission has made final consent agreements with the following entities. The Commission action makes the orders binding on the respondents.

  • Budget Rent A Car Systems, Inc., of Lisle, Illinois, settling charges that it engaged in deceptive practices when failing to disclose potential charges of as much as several thousand dollars more than the cost of repairs that it imposed on customers who had not purchased a “loss damage waiver” when those customers returned their cars with significant damage. The FTC alleged that, in these situations, Budget sought to collect “loss of turnback” fees -- the amount Budget lost because damaged vehicles could not be resold to the manufacturer at a price higher than retail. The consent order requires Budget to pay $75,000 in consumer redress. In addition, if Budget intends to charge consumers for the “loss of turnback” fees again, the order requires the firm to clearly disclose in rental contracts and in travel agents’ and other computerized reservation systems consumers’ liability for damage or loss in excess of the actual cost of repairs to damaged vehicles, and to post this information at each of its rental locations where it collects such fees. (See March 21, 1996 news release for more details about the consent agreement; Docket No. C-3674; Commission vote on June 17 to finalize the agreement was 5-0.) Staff contact is Randy Brook, Seattle Regional Office, 206-220-6350.
  • Martha Clark, doing business as Simplex Systems, of Niverville, New York, settling charges that she falsely claimed in Internet advertising for her Guaranteed Credit Doctor program that consumers would be able to remove negative, but accurate and up-to-date, information from their credit reports. The consent order prohibits her from misrepre senting any right or remedy consumers have under the Fair Credit Reporting Act, including their ability to remove adverse information from a credit report. (Docket No. C-3667; Commission vote on June 10 to finalize the order was 5-0.) Staff contact is Steve Baker, Chicago Regional Office, 312-353-8156.
  • NordicTrack, Inc., of Chaska, Minnesota, settling charges that it made false and unsubstantiated weight-loss and weight-maintenance claims in advertising its cross- country ski exercise machine. The FTC alleged that NordicTrack made overstated success-rate claims based on studies that excluded all but a highly-selected group of purchasers. The consent order requires NordicTrack to have competent and reliable evidence to support any weight loss, weight maintenance and related claims it makes for any exercise equipment it sells. (See Feb. 15, 1996 news release for more details about the consent agreement; Docket No. C-3675; Commission vote on June 17 to finalize the order was 5-0.) Staff contact is Kerry O’Brien, San Francisco Regional Office, 415-356- 5289.

Comments on the Stop & Shop application should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580. Copies of the documents referenced above are available from the FTC’s Public Reference Branch, Room 130, at the same address; 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:

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